A talk about eClosings with Brian Boike,
First Vice President, Lending Support
Flagstar Bank
Over the last two years The Niche Report has highlighted many companies in the industry to help you better serve your clients and enhance the success of your business. Flagstar Bank is one of the nation’s largest wholesale mortgage lenders and an established leader in innovative mortgage technology, including its award-winning eClosings. Brian Boike, first vice president, Lending Support at Flagstar Bank, talks about eClosings and how originators can leverage this important technology.
What is the current status of eClosings and its acceptance among your brokers and correspondents?
The adoption is moving along at a steady pace and increasing monthly, although we feel it could and should be spreading even more quickly. We’re getting good feedback from customers and feeling good about how it’s taken off. The current marketplace and downturn of the industry as a whole have somewhat slowed the adoption of new technologies such as eClosings. Currently, people are not as focused on it — they’re thinking about regulation change and where the next loan is coming from — but eClosings will be the number one initiative when the market normalizes.
How long has Flagstar been doing eClosings?
Flagstar started with refinances via our home lending centers in Michigan in 2007; and we’re now doing eClosings in all 50 states. Currently, eClosings are being done primarily on agency refinances, with both Fannie Mae and Freddie Mac accepting the eNotes. FHA and Ginnie Mae are not active yet, but have shown interest. Our goal at Flagstar is to have 80% of our agency refinances done via eClosings by the end of 2009. We have a little less influence on purchases as the seller’s Realtor often chooses the closing agent.
What industry indicators do you use to measure the acceptance/usage of eClosings?
We look at a variety of tools such as the MERS eRegistry, which shows us that online eNotes are growing — there are over 130,000 eNotes to date. We also know that some loan modifications are being signed electronically, which is a good use of the technology and solves a more immediate problem.
How easy is it switch to eClosings?
For Flagstar customers, it is extremely easy to switch as the process is integrated within our well-established paperless workflow. Originators simply click yes when asked if they want to close a loan electronically. Customers can begin doing eClosings as soon as they register with Flagstar. Settlement agents will see the most change to their processes, but with a little training, we’re seeing things go quite smoothly. We encourage settlement agents to take the online training and to work closely with their account executives. We partnered with Fiserv in developing our eClosings platform, and now we have added Stewart Lender Services because they have a national network of experienced and knowledgeable closing agents that we can tap into.
What are the benefits of using the eClosings system, and who is the ideal candidate?
Really, there are benefits to everyone who is part of the mortgage transaction. For correspondents, their loans are purchased much more quickly, so they can do more loans per month and not worry about line capacity. Because of the increased data integrity of electronic transactions, we often begin reviewing the closing package the day the loan closes and purchase the loan before the correspondent even sends in the paper package. We also post the eNote purchase times on our Web site for correspondents, so they always know exactly how much faster it is.
For borrowers, it’s just a simple click to sign an entire closing package versus having to sign many, many pages of a paper loan closing package — saving time and money. For originators, there are no missing documents that have to be found/copied/re-sent; there are no documents missing signatures; there are no shipping costs involved with the process. And everyone gets the added benefit of saving paper, trees, and ultimately, our environment.
What can you say to your current and future customers to help them make the change to eClosings?
First, the use of eClosings across the industry is absolutely inevitable. Many have seen the efficiencies, moved into it to varying degrees, and they’ll keep moving. While other lenders have had to switch their focus away from technology, Flagstar started at the right time. As is our tendency, we were ahead of the curve on investing in and developing an innovative technology. We were well along with practical eClosings technology before the market went into its current situation, and it was easy for us to continue. Plus, with our size, we are nimble. Technology has been Flagstar’s way from the beginning. It’s another reason originators like doing business with us — it’s easier. The industry in its entirety is moving in this direction and everyone will get there eventually.
How does it tie into other Flagstar technologies?
eClosings tie in very well to Flagstar’s Web-Based Closing Documents. In fact, it just takes one click of a button. eClosings also allow Flagstar customers to be paperless start to finish, using our Loantrac platform and our DocVelocity document management and storage system. With DocVelocity, you never have to print out or physically store the closing package at any point. No missing docs or signatures; it’s all there. You get an e-mail, retrieve the closing package, you drop it into DocVelocity for retention, and you’re done — it meets all state requirements. The originator can be paperless start to finish … just as Flagstar is.
What’s next with technology for the mortgage process at Flagstar?
We are enhancing our systems to comply with new and upcoming compliance and regulation changes, such as RESPA, HVCC, SAFE, HPML, and MDIA. We are offering new tools to help customers comply, easily, securely and much more confidently. We’ve always been committed to using technology to make it easier to do business with Flagstar than with anyone in the industry, so our customers won’t need to go anywhere else. And as always, we’ll be listening to their feedback as to how we can save them time and save them money.
