Ramping Up For E-closings National Lenders See The Light


Wachovia and E-Loan have both rolled out remote, electronic loan closings to their consumers using LSI 's ClosingStream e-closing platform. E-Loan disclosed much of its e-closing strategy in exclusive interviews with Real Estate Technology News in February, but was not then ready to announce the vendor with whom it was working. Wachovia, on the other hand, has gone live with a consumer-oriented campaign spelling out the benefits of remote closings.

Rapid growth

According to LSI, more than 20,000 loan closings have been completed to date on the platform, which targets mortgage refinance and home equity lending transactions. Under the ClosingStream model, borrowers sign over power-of-attorney to LSI. At the closing, an LSI closing agent then wet-signs documents as the borrower reviews them online.

LSI said the swift adoption is interesting because it shows widescale interest in electronic closings even before an eNote is available for signing.

Al Verkuylen, chief strategy officer for LSI, noted that a relatively small number of full electronic mortgages have closed with an eNote. In October, for example, MERS announced the 1,000th note to be registered on its eRegistry.

"All we 're really waiting for is a lender that wants to do the eNote piece," Verkuylen said.

Version 1.1 of ClosingStream has just been released. LSI has a lender partner that wants to work with eNotes, and the next version of the platform will likely let the borrower sign notes electronically (they would still have to sign over power-of-attorney for the other documents), according to Verkuylen.

"We expect it to be there by end of summer," he said.

That would mean adding e-signing, electronic-vault and MERS registration components. Lenders will still send LSI documents in PDF format. LSI will prepare those documents so they can be electronically signed it will also handle the PDF-to-SMART Doc conversion, where needed.

The demographics of e-closings

Currently, about 30 percent of consumers are accepting the offer to close online through the system, according to LSI. Verkuylen conceded, however, that LSI tends to serve centralized fulfillment centers that originate loans online and direct to consumers. LSI believes consumers adopting the e-closing option are younger people who are comfortable on the Internet.

"Are they the MySpace generation? They may be, but I think they 're also a large group of people 25-50," he said.

Lenders and borrowers benefit from ClosingStream because they don 't have to work with third-party mobile notaries to conduct closings, Verkuylen said LSI controls the entire title and closing process. Borrowers can schedule closings as early as possible during the application process and participate in the closing from any location.

At the scheduled closing time, the borrower logs into the ClosingStream Web site and dials a toll-free number to connect with an LSI closing representative. Using an online meeting application, the representative covers each loan document to ensure the borrower understands the details.