With the Consumer Financial Protection Bureau Final Rule set to go into effect on Aug. 1, 2015, mortgage originators are busy making sure they have the systems and processes in place to comply. That means preparing to generate the new Loan Estimate and Closing Disclosure documents that comprise the “Know Before You Owe” package, as well as determining how to meet the new delivery time requirements.
The Final Rule details content that must be included in the new disclosure documents and states that originators must provide consumers with the Loan Estimate no more than three days after application and Closing Disclosure no later than three days prior to the scheduled closing date. Since mortgage originators are being forced to reevaluate their disclosure processes, many are viewing this as an opportunity to not only meet the new requirements, but improve process efficiency, improve the consumer experience, and reduce costs.
As a result, eDisclosure technology is gaining momentum. And it only makes sense, especially as more members of the Millennial generation are expected to enter the mortgage market. Millennials lead a digitally infused lifestyle and as such, they are likely to find the paper-based mortgage process more unsatisfactory than previous generations. Originators that provide an eDisclosure option are likely to have a much greater appeal to this emerging market.
Beyond simply meeting Millennial expectations from a digitization perspective, eDisclosure technology delivers on the promise of improved efficiency – and that appeals to all generations. eDisclosure technology platforms, like ServiceLink’s ClosingStream eClosing Platform, give consumers the ability to receive and review disclosure documents virtually anywhere and at any time. The technology increases transparency into the closing process and provides consumers with a far more streamlined and flexible experience than paper-based transactions can offer.
eSign and acknowledgement capabilities offered as part of these platforms allow for the Loan Estimate and Closing Disclosure documents to be posted immediately upon completion. In addition, eDisclosure technologies can come with embedded messaging capabilities that notify and/or remind the consumer that a document is ready for review, helping shave approximately four days off of paper-based disclosure processes, and reducing costs by eliminating initial handling and mailing expenses. Since borrowers are able to review and accept the documents prior to the day of closing, any issues that arise can be addressed in advance of closing, preventing unnecessary stress and delays.
Further, eClosing platforms track the date and time of each event throughout the closing timeline. This enables originators to produce reports on factors such as the length of time a consumer spends reviewing documents, email notifications sent, and authentication details. Some platforms also help lenders provide additional consumer education to help ensure that consumers understand the documents that are presented.
As originators strive to adhere to regulatory changes and adapt to meet the evolving expectations of consumers, they will find that eDisclosure and eClosing technology will provide them with the tools necessary to ensure compliance and enhance the consumer experience – all while creating greater efficiency and keeping cost at a minimum.