radius financial group inc., a pioneer in eMortgages, has reached a milestone with the closing and funding of one of the industry's first "eClosings," ushering in a new era of customer convenience and operational efficiency to the mortgage process.
Although eMortgages have been in the works for some time, this is believed to be among the first eClosings, with a loan that was originated, disclosed and closed 100% digitally.
"I am proud of our team and our two-and-a-half-year quest to close the loop on digital mortgages," says radius Co-founder Keith Polaski. "Our goal is to revolutionize the mortgage world with products that are scalable and sustainable, and we look forward to rolling out these highly anticipated eClosings to our customers."
A Completely Digital Process, From Application to Servicing
When working with radius, consumers can now complete an entirely digitized mortgage.
A borrower will initiate the process electronically through the digital application and digital consumer disclosures, and radius then electronically underwrites and approves the loan. Until now, that was the end of the "electronic" part of the process.
radius' new eClosing replaces the current archaic process that requires a borrower to hand sign hundreds of pages. Now, radius will electronically generate the package and securely send it to the closing partner. The consumer will receive an electronic review copy so they can address any questions or concerns in advance.
Then the eNotary will launch the DigiSign software at the closing to begin the streamlined process. Consumers can sign the digital pad once, then tap the screen each time they want to add their signature to the official document. The notary also signs once, and his or her signature and seal are automatically noted throughout the document and in the log book. Altogether the eClosing will eliminate hundreds of labor-intensive signatures.
"Goodbye hand cramping," said Jeff Formica, the attorney who oversaw the initial eClosing. "Today was a truly historic occasion – a game changer in the mortgage world."
After the signature event was complete, the documents were immediately sent to the post-closing coordinator, eliminating multiple previous steps that would include operations personally endorsing the note, sending it via overnight delivery to the warehouse bank and then manually registering the MERS number.
With an eClosing, the note/collateral was automatically registered with MERS and then securely sent to partner DocMagic's eVault, where the permanent electronic copy of the asset will be stored, where it can be securely accessed and shared as need. Within minutes rather than days, Fannie Mae had the full collateral package.
"With two clicks of the mouse, the document was transferred from radius to the warehouse bank in minutes," says radius' Chief Technology Officer David O'Connor, whose team built the process in conjunction with numerous partners, (including FNMA, MERS, Santander and DocMagic).
Meeting the Needs of Tomorrow's Home Buyer Today
The user-friendly technology is designed to be accessible to all, but is expected to particularly appeal to millennials, the next generation of homebuyers, who seek a complete digital experience. According to new research from Realtor.com, 2017 will be the year of the millennial home buyer: 52% of those planning to purchase a home in 2017 will be first-time home buyers, and 61% of those are under age 35.
"We are laser focused on the consumer experience, particularly for the next wave of home owners and borrowers, who will be from the African-American, Hispanic and millennial populations," Polaski says. "Millennials in particular live their life online and expect to conduct business in an entirely digitized manner. We intend to be their lender of choice by delivering a 'wow experience,' which includes a digital close."
Cost and Efficiency Savings
While customer experience is the key benefit, the digital mortgage will also allow radius to realize the operational efficiencies accompanying streamlined processes.
The end result is a more efficient workflow that reduces errors inherent in any manual process; a reduction of at least 10 days, and often closer to 30 in lag time until the loan would previously be funded; the cost of up to five overnight delivery packages; and interest fees that would otherwise be incurred on the warehouse line.
"The math adds up fast. We can use the savings to reinvest in the company and pass on to consumers in the form of reduced fees," O'Connor says.
The time savings will result in an improved work environment for radius' employees. "We will be able to reallocate our staff's time to closing more loans and discovering new ways to make mortgages better," says Sue Goodrich, radius' senior vice president of operations. "By automating the more tedious administrative aspects, our talented staff can use their skill set to bring more value to their role by focusing on more significant aspects of the loan process."
Answering the Call of the Consumer Financial Protection Bureau (CFPB)
The CFPB had launched an eClosing pilot program in 2014 as part of its "Know Before You Owe" mortgage initiative, designed to improve the home-buying experience for consumers.
The follow-up report, issued in 2015, found that borrowers can benefit from electronic closings when navigating the mortgage closing process. Specifically, the CFPB reported that the results of the pilot indicate that those who closed their mortgage using an electronic platform are generally better off on measures of understanding, efficiency, and feeling empowered than borrowers who used just paper forms.
"While technology alone will not address all consumer concerns in the closing process, our study showed that eClosings do offer the potential to make the process less complex," CFPB Director Richard Cordray said at the time. "We expect this pilot project and its findings to help inform further innovation that will be a win-win for consumers and industry alike."
"The CFPB was concerned that adoption of innovative eClosing technology was low, so we are pleased to answer their call," Polaski says. "We are on board with their efforts and in alignment with their goal of streamlining the mortgage process for consumers."
About radius financial group inc.radius financial group inc. is a leading, private, full-service mortgage lender in New England, consistently delivering quality financial services to its clients and referral partners since 1999. With a commitment to delivering a measurably better experience to borrowers, radius has been nationally and locally recognized for its continued growth and achievements. Headquartered in Norwell, MA, radius services Massachusetts, New Hampshire, Rhode Island, Maine, Connecticut and Florida, with offices in Mansfield, Marlborough, Orleans, Scituate, West Springfield and Waltham, MA, and in Dover and Bedford, NH. Visit us at www.radiusgrp.com or facebook.com/radiusgrp
