This piece originally appeared in the May 2023 edition of MortgagePoint magazine, online now.
DocMagic’s founder, Dominic Iannitti, is an industry icon and the driving force behind a suite of automated, end-to-end eClosing software products. He began developing mortgage technology when lenders were still taking applications with paper and pens. Over the past 36 years, he’s turned DocMagic into the premier provider of dynamic loan document generation, regulatory compliance, and comprehensive eMortgage services.
MortgagePoint recently had a chance to speak with Iannitti about current changes in the mortgage market and how they’ve accelerated the adoption of eClosing.
Q: What major changes are you seeing in the industry, and what implications are you seeing down the road?
We’re witnessing a historic shift in the mortgage business. After years of high volume and low rates, we’re seeing interest rates rise and loan volume fall significantly. The impacts are widespread, from large lenders exiting the wholesale and correspondent business to focus on direct lending, to layoffs across the industry. Lenders have responded with a diversification of product offerings and investment in technology that can deliver efficiencies and cost savings to the bottom line.
Lenders are also doing more with fewer people on their teams—and simultaneously, they’re hoping to deliver a better user experience to every borrower. To accomplish that, we’re seeing lenders leaning into modern mortgage technology for improved automation, compliance, efficiency, ROI, productivity, and integrated mobile solutions that streamline the lending process. Now more than ever, lenders are looking for proven technologies that reduce their cost per loan and deliver a clear-cut ROI.
Q: As lenders search for efficiency, where should they be thinking about investing?
Organizations are turning to eMortgage solutions that improve the loan process for everyone: lenders, settlement service providers, investors, and borrowers. We expect this to be an even bigger priority in the coming years.
Lenders are now realizing that this is an opportunity to realign their organizations and keep pace with the digital revolution. It’s very clear that it doesn’t make good business sense to run a lending operation with hundreds of people; millions of paper notes and countless other documents; and an entire business ecosystem revolving around the receipt, inventory, and safe-keeping of paper.
Beyond the many internal advantages of going digital—including cost savings, workflow efficiencies, increased compliance, and an accelerated closing process—lenders are reducing friction for business partners and providing a much better experience for the borrower.
Q: Why is it important for lenders to be optimistic now?
That’s a great question because it’s easy to be pessimistic given the rapid and significant changes we’ve seen in the market. Again, the successful lenders we’re working with are making investments in digital technologies.
They know this is the only way to deliver a better experience to their borrowers, allowing them to succeed regardless of which way the market turns.
Moreover, lenders that have a clear vision for the future and the supporting technology to get them there will emerge as solid competitors while also prepping for long-term success. Implementing the right technology stack today lays a pivotal foundation for what’s ahead. And failing to implement technology, or implementing the wrong solutions, can result in a loss of that competitive edge.
Lenders who have already integrated hybrid eClosings have a head start. For everyone else, the good news is that the current market will allow them to catch up while they have time to focus on improving internal processes.
As more lenders incorporate fully electronic closings into their mortgage operations, it puts those that don’t have this capability at a competitive disadvantage. In fact, I’d go as far to say that it will be game over for those lenders that fail to go digital.
Q: We’ve also seen lender tech stacks becoming more complex. As lenders adopt more tools, how can they ensure that all tools will work well together?
The short answer is to use fewer tools. There are some pretty complicated implementations out there for tools that close loans electronically. Integrating multiple pieces of software was the only way to get the job done in the past, but today, lenders can choose a single eClosing platform that offers everything they need.
Using a single-source vendor to automate nearly all areas of the process is hands-down the best model for success. If a lender involves too many vendors, they introduce the potential for integration breakpoints, over-complicated pricing and SLA models, and disparate vendor support teams. With the right eClosing solution supported by an experienced, well-established vendor, the lender shouldn’t need any infrastructure of their own—just a secure internet connection to access cloud-based technology.
Q: Change is constant in our business, so what can lenders do to help them future-proof their institutions?
From my point of view, future-proofing your organization means investing in your business so you can transact digitally. A fully digital closing process—with remote online notarization—saves money. It saves staff hours. And it provides more security with stronger authentication.
Ultimately, future-proofing is about being in a position to outperform and out-price your competitors while providing the elevated service that consumers expect. eClosing technology is poised to change the mortgage industry with the introduction of a lending utopia—one that delivers immense benefits for the entire supply chain.
From lenders, settlement providers, and warehouse banks to investors, servicers, and individual borrowers, we’ll see completely new levels of lending efficiency. The lenders who invest in eClosing technology now can leverage the benefits of more secure closings completed at any time, from anywhere, and they’ll get to leverage those same benefits far into the future.