NMP - February 2018 - 58

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

where paper still hides

handles back office loan
processing work for some of the
nation's largest originators.
"To perform our work, we're
actually inside our customer's
LOS and its completely
paperless," said Wilson.
"Nothing is done on paper."
But Wilson admits that his
team still sees paper tax returns
and other borrower-supplied
documents. He marks it down to
old habits that underwriters use
to do their day-to-day work, like
making notes and performing
calculations on paper docs and
then scanning them into the
computer for safe-keeping. OCR
and ICR are making strides here
as well, he says, and as
technologies mature, he expects
to see less paper.
But new state laws are likely
to help as well, he pointed out.
"Some states still demand that
paper be used when real estate
changes hands," Wilson said.
"While 80 percent of our work

FEBRUARY 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

58

continued from page 57

can be done electronically with
electronically signed documents,
a handful of documents must
still be wet signed to satisfy the
regulators in certain states. How
soon we get to completely
paperless will depend in part
upon them."
Lenders are likely to have
some unlikely allies in any fight
for government change.
"Millennials will be the first ones
on it," Wilson said, "but the
Baby Boomers will be holding
onto paper for some time."
As a boomer myself, I cannot
argue with that logic.
Harry Gardner,
former Vice
President of
Industry
Technology for
the Mortgage
Bankers
Association and current
Executive Vice President of
eStrategies for Docutech, also
had something to say about

state governments that are
holding our industry back.
Docutech is a leader in
electronic documents and has
helped many lenders provide
electronic disclosures and
closing packages to consumers.
But Gardner says that more is
possible, with the right
government support.
"I would like to think that over
the next three to five years, we'll
see a tremendous amount of
activity in state governments
who are now coming to a new
level of awareness on how
electronic transactions are being
held up by state laws not
recognizing the current state of
eNotarization," Gardner said.
"The current trend seems to
revolve around states choosing
to recognize traditional
eNotarization, meaning that they
don't have to put out a specific
law, but can state that they do
recognize the legality of
electronic signatures under
ESIGN and UETA, the standing
laws that have been in place
since 2000. With the new remote
online eNotarization trend (doing
it through an AV link on the
computer) there is growing state
awareness as well, and a lot of
states are looking to support that
in order to avoid being left
behind."
This is important, Gardner
said, because the closing
process is where a lot of paper is
still hiding.
"Paper is still involved in
almost every eClosing," said
Gadrner. "Today, nearly every
single eClose relies on a hybrid
method and requires paper at
some point alongside the
electronic approach, whether
that's the note having to be
paper due to investor
requirements or simply because
of state acceptance of
eNotarization and challenges
with the county recorder
accepting that."
Part of the problem, Gardner
says, is that the industry still
faces a challenge when trying to
easily add external documents
for a loan closed electronically.
"For instance, the ideal
eClosing would seamlessly
integrate the title and settlement
documents as well as any
special lender documents (say, a
termite inspection form),"
Gardner explained. "Since those
docs come in externally (rather
than from the lender's doc
provider), they need to be added

to the eClosing package and
accurately tagged for
eSignatures. Some eClosing
providers in the industry have
solutions for taking in those
special docs and tagging them,
while others simply keep them on
paper for hybrid eClosings. The
Holy Grail, of course, is for the
entire closing package to be
eSigned-a truly 'digital
mortgage.'"
The reason it may take longer
to solve this problem is that it's
not that big a problem for the
lender.
"For most lenders, it's not a
problem and doesn't prevent
them from moving closer toward
the digital eClosing process by
leveraging a hybrid eClosing
where, for instance, the notarized
docs may end up on paper,"
Gardner said. "The lender can
still generate their loan package
to be as digital as it possibly can
be. If there are paper docs
involved and the signing agent
performs the role of a paper
notary, those docs can still in
most cases be scanned in and
submitted for electronic
recording."
In fact today, Simplifile reports
that eRecording-enabled counties
cover more than 80 percent of
the U.S. While Gardner admits
that a few docs may still drop to
paper on the closing table, he
says they can be scanned in
electronically afterward,
eRecorded, and delivered back
to the lender electronically.
According to Gardner, just
about everyone is chomping at
the bit to move towards eClosing.
But when will it happen?
"At Docutech, we're excited
about the idea that within the
next few years the industry is
finally reaching the point of
closing the paper gap that occurs
at closing," added Gardner.
"Electronic methods are there,
but there are still areas paper is
being used, however we see a
great deal of interest from the
industry as a whole, which is a
fantastic sign."
One place we might look for
that interest is to the title
industry, where most of the
nation's closing agents live.
Title and closing
From the borrower's perspective,
lenders throw a lot of paper (in
the form of loan application and
closing docs) and require a lot of
paper (in the form of bank
statements and tax returns). But

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

Contents
NMP - February 2018 - Cover1
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NMP - February 2018 - 1
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