The CFPB has established that eClosings, or a mortgage closing that relies on technology, have tons of potential to improve the consumer experience. The beauty here is that there is also a lot of upside for process-oriented mortgage originators as well!
You want to start incorporating elements of eClosing into your process, and you’ve got some great building blocks (hello, Floify!), but you need to figure out this whole eSignature thing. Now what?
Benefits of eSignature for the mortgage process
- Speed! – No printing/faxing/emailing. No spending the time marking every spot that needs to be signed/initialed with little sticky arrows. No waiting for the return of the document(s). No delays due to avoidable errors and omissions.
- Error-handling – Remember those sticky arrows? This is an error-prone process. Originators and staff have to make sure each signature location is individually labeled, and borrowers have to make sure they don’t miss any. With eSignature technology, users are guided to sign each designated spot before the document can be considered complete, avoiding untimely delays
- Compliance – 72-hour delivery requirement? No problem. With eSignature, documents and disclosures can be sent to your customers in very little time, and the service will track the exact time that your client acknowledges receipt.
- Security – One thing we know at Floify, email is not secure. When your customers scan and email you important documents, they are not securely transmitted. eSignature vendors are required to adhere to strict security guidelines.
- Integrated – eSignature vendors we’ve encountered have open APIs for developers to use to integrate into other mortgage technology. This is how we’ve integrated our vendor directly into the Floify platform.
Are eSignatures legal for mortgage closing documents?
Much of the law is similar to the provisions for a wet-signature, however the biggest difference is that a customer must first consent to conduct business electronically prior to signing electronically.
HUD, FHA, Fannie Mae, and Freddie Mac are now accepting eSignatures on all lender-generated mortgage documents, such as the Initial Disclosures, RESPA packet, GFE, LOEs, etc.
This process is only going to improve and become more widely available as the industry moves forward. In order to successfully navigate TRID’s mortgage closing disclosure 72-hour rule, eSignature can be an important tool in your arsenal.
How we chose an eSignature vendor to integrate with
Most people don’t remember Floify back when we had our own home-grown eSignature system. Nobody used it! So we asked our customers that we knew were using eSignatures, what system they used and why.
Most common answer? DocuSign. So we dug deeper.
There were three considerations as we sifted through:
- Do/Will our customers use it?
- How easy and pleasant is the experience for both our customers AND their customers?
- How easy is it to integrate into Floify? Because we want it to be easy on mortgage borrowers and give them only one place to go. DocuSign APIs are very friendly to our developers.