Old habits die hardMark SkinnereLynx, Mortgage Strategies Group, Electronic Signatures
Its been approximately four years since the first paperless and
electronically signed mortgage, and the industry is still
struggling to understand the benefits of the electronic mortgage
process. You would think that the Uniform
Electronic Transactions Act of 1999 and Electronic
Signatures in Global and National Commerce Act of June 2000
would have opened the door for electronically signed mortgage
documents. However, there is not much evidence that this
legislation has moved the mortgage industry to take advantage of
the time saving, convenient, and cost reducing option.
At Mortgage
Strategies Group in Boca Raton, Fla., weve implemented
electronic signatures for our loan application and disclosure
documents. Loan application and disclosure package turnaround times
were tracked and it was found that on average, using overnight
services it took about seven days. This is in sharp contrast to the
typical one-day return of our electronically signed documents
facilitated by uSign, a service provided by eLynx. Over the past
six months, weve delivered more than 90 percent of our loan
applications and disclosure documents utilizing the electronic
signature service. Most of our customers are signing and returning
supporting documentation the same day, cutting six days out of our
processing time. For Mortgage Strategies Group and its borrowers,
reducing the process by six days is a big benefit, especially when
rates are fluctuating. Electronic signatures provide several
benefits over hand-signed documents:
1. Borrowers can sign documents at a time and place convenient
to them.
2. The documents can be viewed and printed multiple times at the
borrowers convenience.
3. Borrowers dont have to store a large packet of paper.
4. We dont have to resend documents that clients may have
misplaced.
5. Because of the authentication process, we know that the person
we interviewed over the phone is actually the person signing the
loan application and disclosures.
6. We have much better control over the documents, helping us
comply with the Gramm-Leach-Bliley
Act.
When Mortgage Strategies Group implemented electronic
signatures, investors were notified five months before we went live
with the process. In most cases, investors told us that we were the
first to ask for acceptance of electronic signatures. Some
investors told us they needed to develop a policy, while others
simply didnt respond. And, some investors are still trying to
determine a policy almost a year later. Now that weve utilized
electronic signatures for six months, most of our investors have
accepted the process. However, some have treated this like a visit
to the dentist and procrastinated about developing an electronic
signature policy. Whats hard to understand is the confusion and
consternation in accepting something that improves control over the
process, provides convenience to customers and costs less than
sending a package of paper documents via overnight mail. So, this
begs the question: What necessitates ink-signed loan applications
and disclosure documents when every loan-closing package requires
ink signatures? I guess old habits die hard.
Mark A Skinner is CIO of Mortgage Strategies Group, a
mortgage lender based in Boca Raton, Fla. He can be reached at
(866) 989-1580 or e-mail
[email protected].
