The Role of Settlement Agents in the Mortgage Process

Editor’s note: This piece originally appeared in the June edition of MReport.

It is no secret that title and settlement agents play a crucial role in the execution of the mortgage closing process. However, as the industry continues its push towards widespread e-closing and e-mortgage adoption, this role is often overlooked. That oversight, or failure to account for title/settlement buy-in, can be one of the biggest stumbling blocks to e-closing adoption.

Thanks in part to the elimination of other barriers to entry, such as the legislative momentum behind remote/electronic notarization and wider acceptance of e-recording, the “all or nothing” mentality regarding digital mortgage adoption has largely given way to a more pragmatic, “as ‘e’ as can be” approach. Of course, compressed margins and the rising cost to originate have also pushed lenders to become more practical in their approach to digital mortgages. While estimates from document preparation and e-closing provider Docutech put the savings on a fully digital loan transaction at approximately $244 per loan, hybrid e-closings, which can be done for nearly all loans, still net lenders between $155 and $165 in savings on a per-loan basis.

Because this shift in thinking has accelerated the adoption of digital mortgage strategies, including hybrid e-closings, lenders must start factoring settlement into their digital mortgage plans in order to achieve success. By making e-closing adoption as easy as possible for settlement, lenders can dramatically increase their volume of digitally executed loans, resulting in financial and operational benefits on all sides of the transaction…..

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