Falcon Digital Mortgage August 2024 Newsletter

Press Categories: Digital Mortgages

Falcon Digital Mortgage August 2024 Newsletter

MISMO Fall Summit

The MISMO Fall Summit is just around the corner. This year’s summit will be held in Reston, VA from August 26th to 29th and Falcon Capital Advisors is proud to be a Gold Sponsor. For those planning to attend, we invite you to the evening reception Falcon is sponsoring on Monday, August 26th, at 5pm. Our MISMO- certified consultants will be onsite throughout the four-day conference, available to discuss your MISMO and digital mortgage needs.

Please reach out to Tim Renner at [email protected] to schedule a time to connect, or simply find us at the Monday reception. We would love to meet you face-to-face and explore how we can support your digital mortgage initiatives.

 

 

 

Industry News

Private Label eNote Securitization by Rocket

The RCKT Mortgage Trust 2024-INV1 deal, featuring 27.9% electronic promissory notes, marks a significant step toward broader

eNote adoption in private-label RMBS, driven by Rocket’s influential role. This move reflects growing market acceptance, supported by legal validations and infrastructure advances, and could lead to more eNote heavy securitizations.

LEARN MORE

KeyBank Enhances Digital Home Lending with Automated Verification

KeyBank has introduced a digital enhancement to automate the verification of borrowers’ income, assets, and employment, simplifying the loan process and enabling faster closing times.

LEARN MORE

Mr. Cooper acquires Flagstar MSRs and TPO platform

Mr. Cooper Group is set to acquire a third-party origination platform and $356 billion in mortgage servicing rights from Flagstar Bank for $1.4 billion, adding 1.3 million customers.

LEARN MORE

Industry Commentary and Education

Transforming Mortgage Staffing with Technology-Driven Efficiency

The mortgage origination industry has traditionally adjusted staffing based on volume, but new technology allows for a more efficient approach. By thoughtfully implementing automation and simplifying processes, lenders can reduce the need for cyclical hiring and layoffs, making operations more scalable and adaptable.

LEARN MORE

Industry Conferences and Webinars

MISMO Fall Summit | August 26-29, 2024

MBA Compliance and Risk Management Conference | September 22-24, 2024

MBA Annual Convention | October 27-30, 2024

Please contact us if you have an event you would like to be included here.

Falcon Digital Mortgage May 2024 Newsletter

 

 

Vendor News

Ginnie Mae Announces Change in Policy on Commingling of Digital and Paper Collateral

Ginnie Mae announced on 5/20/2024 a change to its longstanding Digital Collateral Program policy prohibiting the pooling of eNotes with paper notes. Effective 6/1/2024, approved Ginnie Mae eIssuers will be permitted to pool eNotes with paper notes in the same pool or loan package.

LEARN MORE

Ginnie Mae eNote Securitizations Climb Rapidly

It’s been only a few short years since Ginnie Mae launched its Digital Collateral Program. The program, which began as a pilot of a limited number of eIssuers and eCustodians, has expanded to include numerous other participants. Through 2023 more than 120,000 eNotes have been securitized, equating to more than $33 billion in digital collateral.

LEARN MORE

Snapdocs Partners with SitusAMC

Through the integration of Snapdocs eVault with SitusAMC’s ProMerit platform, warehouse banks can seamlessly manage eNote transactions within their existing systems, enhancing scalability and customer service in response to the growing demand for digital mortgages.

LEARN MORE

Industry Commentary and Education

Navigating AI in Mortgage: Opportunities and Challenges

AI remains a focal point in the mortgage industry. Mortgage professionals expect AI to accomplish a significant portion of their tasks within the next five years, with efficiency being the most anticipated benefit. However, the concerns around loss of personal touch, cyber threats, and data vulnerability are still prevalent.

LEARN MORE

Industry Conferences and Webinars

MBA Secondary & Capital Markets Conference & Expo I May 19-22, 2024

MBA Commercial/Multifamily Finance Servicing and Technology Conference I May 19-22, 2024

MISMO Spring Summit I June 3-6, 2024

HousingWire AI Summit I July 23, 2024

Please contact us if you have an event you would like to be included here.

Falcon Digital Mortgage May 2024 Newsletter

MISMO Consulting Certification

In January, the Mortgage Industry Standards Maintenance Organization (MISMO) introduced its Certified Consultant program to recognize consulting firms with significant expertise in the mortgage industry and a thorough understanding of MISMO standards. I’m excited to share that Falcon Capital Advisors was among the first firms to achieve this certification. Additionally, we are the only firm certified across all major industry segments—Mortgage Origination, Servicing, and the Secondary Market—and in all critical areas of expertise, including Mortgage Technology Strategic Planning, Mortgage Technology Implementation, Operational Efficiency, and eMortgage Consulting.

Earning the MISMO certification is a testament to our commitment to providing our clients with unparalleled mortgage expertise and demonstrates our dedication to upholding industry standards and best practices. We offer personalized strategies, cutting-edge technology implementations, and expert eMortgage consulting to help our clients innovate, streamline their operations, and drive transformation.

Thank you for joining us. Now, let’s explore the latest trends and technologies in the mortgage industry in this month’s newsletter.

– Armando Falcon

 

 

Industry News

Figure Rolls Out Blockchain Mortgage Registry System

LEARN MORE

Fairway Independent Mortgage Increases Its Use of Digital Closings

LEARN MORE

First Community Mortgage selects Blue Sage Digital Lending Platform

LEARN MORE

Proof Introduces New Product to Enhance Security Surrounding Identity of Online Notaries

LEARN MORE

Mphasis Partners with AWS to Expand Generative AI Services

LEARN MORE

Industry Commentary and Education

How AI Can Drive Career Growth for Mortgage Professionals.

LEARN MORE

Digital Transformation

For over a decade, financial institutions and federal agencies have relied on Falcon Capital Advisors for strategic insights, expert advice, and technical prowess in supporting their digital transformation initiatives. Falcon continues to empower our clients to thrive in an ever-evolving and fiercely competitive financial services digital marketplace.

Falcon’s services help our clients simplify and accelerate digital transformation and digital mortgage program implementation.

Ready to take your organization to new heights? Contact us here to schedule a consultation.

Industry Conferences and Webinars

Mortgage Innovators Conference I May 8-10, 2024

MBA Secondary & Capital Markets Conference & Expo I May 19-22, 2024

MBA Commercial/Multifamily Finance Servicing and Technology Conference I May 19-22, 2024

MISMO Spring Summit I June 3-6, 2024

Please contact us if you have an event you would like to be included here.

Falcon Digital Mortgage March 2024 Newsletter

Welcome to the latest edition of the Falcon Digital Mortgage View. This month we spotlight recent movement in the digital mortgage technology space, federal housing agencies partnering with MISMO on a new standardization initiative, and insights from Forbes on AI technology’s impact on mortgage lending.

A quick reminder that it’s time for servicers to start thinking about their MERS® Annual Report. See how Falcon can help in this month’s Falcon at 50,000 Feet

 

Vendor News

American Financial Network selects Snapdocs as its eClosing and eVault solution vendor.

LEARN MORE

FirstClose Equity integrates with The Closing Exchange’s Notary and E-Signing Service.

LEARN MORE

MISMO establishes new development work group dedicated to creating a servicing data standard for federal housing agency loans.

LEARN MORE

Industry Commentary and Education

Forbes explores how AI technology is reshaping the future of mortgage lending.

LEARN MORE

MERS Annual Report

March 31st is just a few days away. If on that date your organization is named the servicer of 1,000 or more MERS-registered loans you will need a third-party reviewer for your MERS® Annual Report.

Falcon Capital Advisors provides best-in-class service as a third-party reviewer. Only Falcon’s review team consists of former members of the MERS legal, operations, membership, and compliance departments. We have unmatched experience and expertise developing, enforcing, and reviewing requirements covered by the MERS® Annual Report

Contact Falcon today ([email protected]) and take your organization’s MERS compliance soaring to new heights.

Industry Conferences and Webinars

HousingWire Virtual Demo Day I April 9th, 2024

American Mortgage Conference I April 15-17, 2024

Mortgage Innovators Conference I May 8-10, 2024

MBA Secondary & Capital Markets Conference & Expo I May 19-22, 2024

MISMO Spring Summit I June 3-6, 2024

Please contact us if you have an event you would like to be included here.

Falcon Digital Mortgage February 2024 Newsletter

MISMO Winter Summit

Our first newsletter of the new year is devoted to sharing highlights from the recent MISMO Winter Summit. These conferences are always a great time, with lots of good information and ideas exchanged, but this one had more of a celebratory mood than usual as MISMO marked its 25th anniversary.

Amidst the festive atmosphere, the Summit delved into the potential transformative impact of Generative AI on the mortgage industry. Attendees gained valuable insights like the importance of having good data that is traceable in order to drive more reliable Generative AI output.

MISMO announced the launch of several new certification programs. Falcon Capital Advisors is proud to be among the first organizations participating in the MISMO Certified Consultant Program, which will enable consulting firms to showcase their expertise in various mortgage industry domains as well as with MISMO standards. Also announced were the eVault System Certification and SMART Doc® Validation Rules Certification, which are outgrowths of work completed by the eVault Standards DWG.

In summary, the MISMO Winter Summit was not only a celebration of the organization’s 25 years but also a platform for insightful discussions, groundbreaking announcements, and collaborative efforts shaping the future of our industry. Congratulations, MISMO!

– Armando

Vendor News

Snapdocs and LenderLogix Partner to Enable Frictionless Digital Closings at Scale

Digital closing provider Snapdocs announces the integration of its eClosing platform with LenderLogix’s POS LiteSpeed. The integration allows lenders to offer a streamlined digital closing, from application to signatures, automating internal processes and enhancing overall efficiency in the mortgage transaction.

LEARN MORE

After Facilitating $374B in Sales, RON Firm Proof (formerly known as Notarize) Looks to California

Proof sees tremendous RON opportunities in the Golden State following the enactment of California Senate Bill 696, allowing online notarizations and recognizing out-of-state notarizations as valid.

LEARN MORE

Industry Commentary and Education

Stavvy’s CTO on Moving a Whole Industry to Digital

Jim Butler, CTO at Stavvy, discusses the shift to digital transactions and AI integration in real estate with HousingWire. Stavvy’s broad platform, recent acquisitions, and emphasis on configurability position them for increased business efficiency in 2024, a bridge year leading to growth in 2025.

LEARN MORE

AI in Homebuying: Separating Fact from Fiction

AI, is revolutionizing homebuying by enhancing the customer experience and streamlining processes, but a human element remains a critical component.

LEARN MORE

Have an eMortgage-related news item you want to share? Want to make sure you and your team are on our distribution list? Have a question about Falcon’s digital mortgage advisory services? Send us a note at [email protected]

 

FHFA Credit Initiative: Five Areas of Lender Impact

 

DOWNLOAD PDF

For additional information on how Falcon Capital Advisors can support your advocacy and transition contact Phil Bracken at [email protected] or Jim Voth at [email protected].

Jim Voth of Falcon Capital Advisors on Digital Mortgage Adoption

Jim Voth leads the Digital Mortgage practice at Falcon Capital Advisors, Washington, D.C., where he manages digital transformation engagements for GSE, government, and banking clients. He can be reached at [email protected].

Q: Conventional wisdom is that digital mortgages thrive in a refinance environment, and less so in a purchase market. Is this in fact the case, and has the pivot to purchase resulted in a big drop in eNote origination?

JIM VOTH: Certainly, the prevailing view is that most of the progress to date with digital mortgages has been on the refinance side of the business. Not surprising really since the nation’s largest originator, and by far the biggest source of eNotes registered on the MERS Registry has been a refinance powerhouse.  At the moment there is no industrywide source that specifically tracks and publishes the purchase and refinance split for eNotes. However, there are other large lenders, including the one we’ve already mentioned, who are doing eClosings for purchase as well as refinances.

That said, overall eNote volume was down in the first half of 2022, according to the MERS eRegistry. As a percentage of total originations, however, eNotes are tracking at 6% of all originations, slightly ahead of the 5% they were at in 2021. There are simply fewer of them because overall mortgage volume is down. Purchase loans now make up more than 50% of overall volume, which suggests that lenders are creating eNotes using purchase loans.

The logistics for a full digital closing are easier in a refinance transaction because the lender has more control over the settlement and notarization methods.  But at the end of the day, the manufacturing process for digital mortgages is the same for both purchase and refinance loans.

That doesn’t mean that there aren’t some cultural and logistical challenges when it comes to fully digital purchase loans where the note, security instrument and other loan documents are signed electronically. In a purchase transaction, the seller, or more often the Realtor®, selects the title company. To do a fully digital mortgage, the title company must have access to an eClosing platform with in-person electronic notarization (IPEN) or remote online notarization (RON) capabilities, and of course access to an eNotary. Not all of them do, but this is rapidly changing. The lender can also provide the title company access to these tools via their digital mortgage vendor relationships.

Another challenge is that traditional in-person closing ceremonies are often encouraged by loan officers and real estate agents for purchase transactions. But there is no reason why these can’t remain traditional in-person ceremonies but with electronic signatures and eNotarization (i.e., IPEN).

Q: In a smaller, way-more competitive purchase market, is it wise for lenders to try to introduce eClosings to the borrower experience?

VOTH: One of the benefits of technology is that it gives consumers more options. Viewed from this perspective, lenders aren’t trying to shoe-horn borrowers into a single path. Many borrowers select lenders based on their promise of making the origination process faster and less painful. You know what’s not fast and not without its pain points… being given a pile of important legal documents on the day of closing to read through for the first time and sign while a settlement agent, notary, and potentially others wait on you. I think most people would agree that a much better experience is when you are given a chance to carefully review those documents in the comfort of your own home and, in some cases, sign them before coming to the closing ceremony, which by the way is now shorter because you’ve already reviewed and signed many of the documents beforehand.

In addition to offering a more modern customer experience, eClosings have significant economic advantages for lenders. Recent ROI studies have found that fully digital mortgages can save lenders and title companies over $400 per loan. Given that the most recent MBA numbers show that in Q2 the average lender lost $82 per loan, a gain of a few hundred dollars is not insignificant.

Not everyone will be persuaded immediately, which is why it will take a while before the majority of mortgages are fully digital. But make no doubt about it, those who think we’re going to scrap digital innovation to stick with ink are betting the wrong way.  Fully digital is the future and the benefits are too great to pass up.

Q: What can lenders do to make the eClosing process more “purchase mortgage friendly”?

VOTH: As we’ve mentioned, they can offer borrowers more options. This could include fully remote closings, hybrid closings (i.e., where one or more of the closing documents are signed electronically, be it remote or in-person)) or fully in-person closings ceremonies but with digital signatures. For the foreseeable future I think many borrowers will still want a traditional in-person ceremony for purchase transactions.  That’s why we anticipate an increase in IPEN to enable this latter option.

Q: What can lenders do to ensure adoption of a digital mortgage program across both purchase and refinance?

VOTH: There are several factors that a lender should consider to ensure the successful adoption and scaling of a digital mortgage program. Best practices include executive sponsorship of the digital transformation effort, clear transformation strategies, managing to objectives and milestones, and dedicating resources through full adoption. Not getting stuck in pilot mode is also critical.

Our conversations with lenders, as well as other recent industry research, has shown that internal resistance to change is one of the biggest challenges to digital mortgage adoption. One proven way to move the culture forward is to make eClosing the default setting in the origination process. In addition, a phased roll-out beginning with hybrid digital mortgages where some of the closing documents are eSigned can be an interim step to introduce change more gradually.

Falcon Digital Mortgage View

“To Measure is to Know” – Lord Kelvin

One of the hurdles that advocates of digital lending have faced in convincing their companies to undertake a major digital transformation has been the ability to show hard ROI. Everyone believes in the potential of digital – faster, cheaper, more efficient – but there’s been a lack of hard numbers to prove it – until now. Recently two different surveys, commissioned by Notarize and ICE respectively, drilled down into the benefits of eClosing solutions and put hard numbers against them. Notarize’s study found that lenders can save up to $444 per loan and title agents up to $100 per loan when using an eClosing solution. ICE’s study found that lenders can save 70 minutes per loan and shave 2 days off the loan cycle using the company’s hybrid eClosing system.

The bottom line is that with an eClosing solution in place lenders can close loans faster with fewer errors and save more money than with an in-person or legacy paper process. These studies are an important step for our industry, and something we look forward to helping our clients understand. – Armando

Wolters Kluwer Acquires IDS

Wolters Kluwer recently announced the acquisition of IDS. IDS will become part of Wolter Kluwer’s Governance, Risk, and Compliance Group, a leading provider of compliance software for U.S. banks, lenders, credit unions, insurers, and securities firms. The acquisition further builds out Wolters Kluwer’s presence in the eClosing space. At the end of 2020, the company also acquired eOriginal.

LEARN MORE

MISMO Looking to Create Standards for eVaults

MISMO has issued a call for participants for its new development workgroup (DWG) focused on creating eVault standards that improve the current process, enhance digital mortgage scalability and help ensure the seamless transfer of eNotes to facilitate their sale to investors. The new eVault Standards DWG will work with industry participants, government agencies, and other stakeholders to create a single set of standards to streamline eVault operations.

LEARN MORE

Your MERS Annual Report is Coming

It’s never too early to start planning for your MERS Annual Report. Although it is not due until December 31, MERS servicers can submit the Annual Report beginning in June. Falcon Capital Advisors is one of a handful of approved Annual Report third-party review firms. We can schedule our review of your organization’s MERS policies and procedures to occur any time in the year and then work with you during the submission window to submit your Annual Report to MERS. Contact us at [email protected] to get started.

CONTACT US

Servicers Going Digital with eModification

In a recent interview with DS News, Tim Anderson, the President of Evolve Mortgage Services‘ eMortgage Division discusses the benefits of eModification for servicers. Anderson said, “With an eModification, the entire loan modification process – including notarizing the new loan – can all be done online. An eModification enables servicers to process loan modifications more quickly and easily than they would under traditional, antiquated, paper-based processes.”

LEARN MORE

Snapdocs First to Achieve MISMO Certification for eClosing System

Snapdocs’ eClosing platform, procedures, and policies have been certified as compliant with MISMO’s requirements. Snapdocs is the first, and at the moment only, eClosing provider to achieve this certification from MISMO.

LEARN MORE

New Hampshire Completes First RON eClosing

Summit Title just completed the first RON eClosing in the state of New Hampshire. As consumers are increasingly demanding fully remote access to facilitate loans and mortgages, states are establishing or expanding RON measures, New Hampshire passed RON into law last year. Summit used Stavvy’s digital closing and RON tools.

LEARN MORE

Brief Takeaways from MISMO’s Winter Summit By Tim Cooper, Manager, Digital Practice

MISMO’s recent Winter Summit in Clearwater, FL attracted a like number of in-person and virtual attendees: 154 vs. 154. (Full disclosure: I was scheduled to go but at the last minute tested positive and had to go virtually)

Based on the sessions I attended, the overall mood of the conference was upbeat. There was a fair amount of discussion about new people coming into the digital mortgage sector and generally positive outlooks of increased adoption in the new year. For the first time since the pandemic began, representatives from the GSEs were able to attend in person, and they reiterated their goal of keeping everyone focused on the digital mortgage initiatives.

In terms of new technology, the community saw a demo of a new eVault validation tool for eNotes. The project, which was funded by MISMO, was well received by the attendees who felt it will help address interoperability issues.

An update was given on the status of the approval of MISMO version 3, the expectation among the MISMO community was that the doc form would be fully approved by Q2 and most likely would initially be used on other document types besides eNote: for example, closing estimates, appraisal forms, HELOC agreements.

From a government news perspective, Lynne Chandler of Ginnie Mae discussed the investors new APM on eModifications of paper notes.

10.26.21 – Update: New Date for HUD-Held Vacant Loan Sale 2022-1 (“HVLS 2022-1”) – Now December 1, 2021.

The U.S. Department of Housing and Urban Development (“HUD”) has announced an update to the date for the upcoming HUD-Held Vacant Loan Sale (“HVLS 2022-1”). The new date for this sale is now December 1, 2021, which replaces the previous sale date of November 10, 2021.

The sale will consist of due and payable Secretary-Held loans. The loans are first liens secured by 1 to 4-unit, vacant residential properties where the last surviving borrower is deceased. This sale will include increased bidding opportunities for non-profit and state & local government purchasers.

Entities interested in participating can contact the Office of Asset Sales Single Family Transaction Specialist at 1-844-709-0763 or email [email protected] for more information.

For prospective bidders to this sale, please refer to the section on this webpage entitled, For Prospective HUD Asset Sale Bidders, to become a qualified bidder and receive the Bidder Information Package for HVLS 2022-1.