Snapdocs and Freddie Mac have teamed up on a new program aimed at getting originators to use digital mortgages and electronic promissory notes.
The software aims to address some of the major issues that have hampered the adoption of eMortgages and eNotes, such as the unique technical components required to hold and manage the note, the variability of the counterparty digital acceptance policies, and the complexity of implementation and manage the required process changes.
With the quick start program, Snapdocs provides the technology required to generate, store, manage and transfer eMortgages that is independent of any cash register, lending or document preparation systems. This also includes the creation of lean implementation processes between the counterparties with the aim of reducing complexity and facilitating the approval of eMortgage.
"Freddie Mac is the first investor to support the program, but expanding the ecosystem of lenders, investors, agencies, warehouse lenders, and service providers who participate is a primary goal of the program," said Camelia Martin, Head of Industry and Regulatory Affairs. "We look forward to engaging every partner our lenders work with as it will only add to the value the program brings to the industry and ultimately its impact on eMortgage rollout."
Some companies have progressed faster than others in adopting digital mortgages. Torrance, Calif. Atlantic Bay Mortgage Group rose from seven eNotes executed in January 2020 to more than 7,000 registered eNotes with MERS by the end of last year with Snapdocs competitor DocMagic. By May of this year, it had run a total of 10,000 eClosings, but that's only a little over 20% of its volume.
Regardless, Amrock, the title and processing subsidiary of Rocket Cos., Has just announced its 1 millionth eClosing of all time. The same announcement noted that the company was involved in more than 80% of all eClosings conducted.
But others seem to need a little more persuasion, even though hybrid eClosing usage is expected to grow 30% this year.
The Snapdocs Quick Start Announcement follows one from MISMO on September 20 about the creation of the MISMO e-Eligibility Service, operated by Snapdocs, a tool that provides access to information that affects digital deals, such as title acquisition policies. In May, Snapdocs closed a Series D funding round that valued the company at over $ 1 billion.
Other mortgage technology companies share the same general goal of introducing digital mortgages, with several indicating that they have similar programs in place.
"[It's] great to have other companies come into the space to support an eMortgage platform," said Tim Anderson, Evolve Mortgage Services eMortgage Division president. The company "offers a complete end-to-end eMortgage platform, including our own eNote and eVault, which has everything discussed in the Snapdocs announcement and has been approved for years by Fannie Mae and Freddie Mac."
DocMagic will soon be releasing its own eEligibility tool. As for some of the specifics mentioned in the Snapdocs version when it comes to integrating with counterparties: "We go through this process with every single lender that we have set up for eNotes and get involved in working with the warehouse bank with their sub- To speak to service providers ". to their investors or aggregators, "said Dan McGrew, president of Elite Digital Advisors, who advises DocMagic and other companies." We have a very consultative pastoral process with our lenders.
While companies have subject matter experts on other areas of the process, they don't have one on eClosings, McGrew said. Lenders want to create an eNote but have no idea how to do it.
DocMagic also has longstanding relationships with both government sponsored companies.
"We have our certification processes. We tie in with their certification process and guide our customers through the processes that will help and train them along the way and what they need to pass through," added Brian Pannell, Chief eServices Executive.
SimpleNexus recently announced that its Nexus Closing eMortgage product has been integrated with DocMagic's eVault and eNote technologies.
"There is an industry-wide effort to finally see this not just from the perspective of the borrower experience that was the focus of the last year, but also from the perspective of the tremendous benefits for lenders and industries," said Jay Arneja, principal product manager for SimpleNexus.
SimpleNexus offers a white glove service to help lenders prepare.
"The components are very similar," said Arneja. "We evaluate a lender's readiness, perform a custom ROI calculation, and then create their production roadmap."
The eMortgage quick start program is now live. Snapdocs is in the process of registering the first lender participants as well as their partners such as warehouse lenders and servicers.
"As an industry, we've always been able to achieve more together through collaborative efforts like this program, and we're excited to be working with Freddie Mac and other industry participants to make eMortgages more accessible to all," said Martin.