This piece originally appeared in the February 2022 edition of DS News magazine, online now.
Tim Anderson is President of the eMortgage Division for Evolving Mortgage Services, where he is responsible for overseeing the deployment of the company’s end-to-end digital fence platform and developing strategic partner relationships. A digital mortgage pioneer, Anderson has over 35 years of industry experience and has held leadership positions at Pavaso, DocMagic, Docutech, Black Knight Financial Services, Stewart Title, Freddie Mac and HomeSide Lending. He can be reached at [email protected]
What are some of the potential benefits of eModifications for Services?
An eModification is a fully digital loan modification. With an eModification, the entire loan modification process, including notarizing the new loan, can be done online, paperless, electronically. An eModification allows managers to process loan modifications faster and easier than they would through outdated traditional paper-based processes. Recently, eModifications have become popular as many borrowers exit forbearance plans and have to resume mortgage payments. MIMOin fact, recently created an eModification Reference Guide for Services that outlines best practices on how to create, e-sign, store, and deliver e-signed loan modifications.
With each loan modification, managers must be able to demonstrate compliance with all loan delivery, acknowledgment, acceptance and execution requirements. In other words, everything must be documented. For example, this summer the CFPB released new rules to ensure borrowers have enough time to explore their loan options before foreclosure proceedings can begin.
When combined with SMARTDocs, today’s eModification technology offers service agents an easy way to provide electronic proof of compliance that they have complied with new agency rules. SMARTDocs include timestamps of when they received, viewed, and executed documents and automatically create a digital audit trail to prove what they said, what they did. This allows servicers to prove that they have met deadlines and other requirements related to a loan modification without any effort.
Couldn’t repairers simply use e-mails or phone logs to verify that they have met the required deadlines? What additional benefits does eMods provide?
Of course they can. However, email and phone records are usually not attached to the loan file – they are kept on different systems and need to be put together to show compliance. This is going to be extremely difficult with so many borrowers looking to modify their loans as we emerge from the pandemic. SMARTDocs, on the other hand, already contain all the information about where and when they were sent and who signed them. Because eModification technology can be integrated into a repairer’s existing systems, SMARTDocs can also auto-populate signatures to ensure they don’t miss any. This is immediately available for the borrower to sign online, just minutes after selecting the appropriate loan workout. In terms of efficiency and convenience, there is no comparison.
How do borrowers benefit from an eModification?
For one thing, eModifications are paperless, so there is no risk of the borrower misplacing loan documents, signatures, or anything happening to them. Second, eModifications walk borrowers through every step of the loan modification process and create a digital audit trail at every step, so they’re much more secure and compliant. An eModification is also practical. The borrower can complete all the necessary documents online through his laptop or any digital device no matter where he is. It’s fast, easy, safe and secure.
How can borrowers bypass in-person notarization?
With eModifications, the borrower can sign closing documents via remote online notarization, or RON, which requires no in-person interaction. Instead, the notary joins the borrower in a videoconference, electronically reviews documents with the borrower, and attends the borrower’s electronic signatures. The entire signing process is recorded and saved for repairer compliance. At any time up to 10 years after the modification, Fannie Mae or Freddie Mac can ask the repairer to provide proof that the signing took place as it should. The video provides irrefutable electronic evidence.
However, not all eModification technologies are the same. Many providers don’t allow borrowers to sign their loan documents using a remote notary, and some don’t even use SMARTDocs. In order to take full advantage of eModifications, it is important that service agents choose technology that includes all components of the loan modification process, including RONs, and is capable of outputting every document as a SMARTDoc. By doing so, services can scale easily to handle high volumes of borrower requests while producing fewer errors, creating efficiencies in the process, saving time, and ultimately delivering a better customer experience.