NMP - February 2018 - 56

a special focus on THE PURSUIT OF PAPERLESS a special focus on THE PURSUIT OF PA

where paper still hides

not fully integrated an automated
closing cost and fee engine into
their systems," said Gregory E.
Teal, President
and Chief
Executive Officer
for Ernst
Information
Services.
"Because they
could not afford errors, it caused
many lenders to move back to
paper. We saw lenders that were
calculating fees based on a
printed spreadsheet they kept on
their desks. TRID led many to
realize that if they could
electronically integrate the fees
along with any updates, they
could get rid of the paper. That
made what we offer, which had
previously been a 'like to have'
technology, into a 'gotta have.'"
Ernst started out providing
closing cost data to the industry
back when lenders used
telephone-book-sized books to
calculate their Good Faith

continued from page 54

Estimates (GFEs) and Closing
Costs. Today, all of that work is
done electronically, with Ernst's
systems integrating to every
jurisdiction in the country and
feeding accurate data into lender
systems either through an online
interface or directly, utilizing
Ernst's custom fee engines
within the lenders' shops.
The bigger challenge, Teal
said, was getting the title agency
on board with providing fees
with lenders in a fully online
environment.
"TRID drove lenders to work
with title agents who could
provide certified accurate costs
to them at the Point of Sale. This
gave larger title companies at a
distinct advantage," Teal said.
In response, Ernst created its
Settlement Agent Gateway to
help even the smallest title
companies negotiate fees in
advance and get a shot at the
lender's business.
"Taking the paper out of that

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part of the business was an
essential move, both for
compliance-because it's just
not possible to be guaranteed
accurate with paper price sheets
floating around," Teal said. "In a
paper-based world without these
tools, a lot of those smaller
companies wouldn't exist today."
The loan origination system
If you really wanted to pick a
poster child for the digital
mortgage, it should be the
technology that originates the
loan. Today, we have a number
of LOS platforms that are
capable of originating a loan
without any paper whatsoever
(not available for all loan
products, subject to restrictions
based on credit score and
downpayment; requires buyer
opt in for all electronic
documents). If that sounds a bit
like the fine print in an auto
dealers radio ad, well that's
because you have to have the
right deal to fly through these
systems, though some
technologies are better than
others.
According to
Dan Green,
Executive Vice
President of
Operations for
Mortgage
Cadence, an
Accenture Company, it often
comes down to the way the
technology is used. When I
asked him where the paper was
hiding, he replied, "Hiding?"
"It's hiding under the bright
cover of daylight," Green told
me. "In other words, it's not
hiding at all, it's in plain sight
throughout the process. And
exactly where paper remains is
or can be different lender to
lender based on their
manufacturing and QA
processes."
Green says he finds two
principal reasons why lenders
are finding it hard to get rid of
paper documents. They don't
trust their technology and they
aren't ready to reengineer their
processes to allow them to trust
it, on the one hand, and
compliance requirements on the
other.
"Paper is tangible and
traceable and auditable using
traditional, tangible, wellunderstood processes," he said.
"Eliminating paper, in other
words, in addition to causing
discomfort, requires re-

engineering processes and
educating teams how to not only
work effectively with it, but to get
comfortable with it as well."
As for compliance, Green
says, "Having paper and tracking
paper may give the perception
that compliance with regulation
is easier. Regulations themselves
don't require physical paper
though physical paper may be
perceived as making compliance
easier."
Anything that makes
compliance easier for the lender
is bound to be attractive, even if
it's only wishful thinking. But
what impact is this having on the
enterprise?
"It's an industry challenge,
certainly, for a couple of
reasons," Green said. "The first
is obvious: clinging to paper
makes a fully digital, completely
electronic mortgage difficult to
achieve. Second, paper is
expensive and inefficient.
Mortgage team productivity is
down about 42 percent over the
last eight years, with no signs of
improving. Moving toward fully
electronic, paperless mortgage
lending yields greater efficiency,
and therefore, lower cost to
close, another serious, long-term
issue the industry faces."
When does Green think we'll
get there? "Not soon enough!"
But he says it's not really a
technology problem. "The
environment (technology, legal)
is and has been in place for
some time. The work before us is
process, and the faster the
industry moves in that direction,
the quicker borrower satisfaction
improves and profitability
increases."
LendingQB's Director of Sales
and Marketing
Linn Cook also
told me that paper
carried with it a
comfort level that
made it hard to
pry out of the
hands of company personnel.
"It is definitely on the decline,
thanks to all of the technological
advancements that have been
made, but many Loan Officers
still give paper 1003s to
borrowers," Cook said. "This
speaks to the reliance and
comfort that people still have
with paper. But the area that has
not progressed as much as we
would like to see is the
submission of documents from
borrowers. Borrowers either do
not have the tools or the comfort


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Table of Contents for the Digital Edition of NMP - February 2018

Contents
NMP - February 2018 - Cover1
NMP - February 2018 - Cover2
NMP - February 2018 - 1
NMP - February 2018 - Contents
NMP - February 2018 - 3
NMP - February 2018 - 4
NMP - February 2018 - 5
NMP - February 2018 - 6
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NMP - February 2018 - Cover3
NMP - February 2018 - Cover4
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