The eMortgage revolution is here


The entire mortgage process is time-tested but outdated. Buying a house is one of the more important and exciting aspects of life, so why is the process (at times) painful? Many homebuyers want an experience that includes a more efficient, consistent and transparent process that provides a seamless consumer experience. An eMortgage possesses all of these features and also brings a new generation into the modern age.

Fannie Mae defines an “eMortgage” as the use of electronic processes and signatures in the mortgage application process. In some states, it refers to electronically signed closing documents paired with an original electronic promissory note signed on an eClosing platform and is ultimately stored electronically.

“A true eMortgage must encompass the entire loan lifecycle, from targeted marketing automation to lead generation to application and all the way through to automated investor delivery,” said Jonathan Corr, president/CEO of Ellie Mae, in a HousingWire article.

Competition is heating up in the digital mortgage arena, as big and small companies refine and expand their offerings, according to a Washington Post article.

“There’s a mix of lenders right now,” LendingTree Chief Economist Tendayi Kapfidze, told The Post. “There are some lenders that have an almost completely digital process, and some lenders who have a partial digital process. But, ultimately, the industry as a whole, from application to underwriting and processing the application, is moving toward a digital structure.”

An Ellie Mae survey of more than 3,000 millennials, Gen Xers and baby boomers discovered that across generations and genders, homebuyers want a mortgage experience that combines speed, convenience and security with personal interaction. When millennials were asked what could most improve the experience, nearly a quarter said they would like the entire mortgage process to move faster. Furthermore, homebuyers want “more self-service,” as more than a third of all borrowers prefer self-service websites, especially during the research stage of purchasing a mortgage.

What does all of this mean for credit unions? eMortgages offer a fundamentally better way of doing business by digitizing data in countless other applications that credit unions and financial institutions would conduct in an old fashion way, notes McKinsey & Company, a risk advisory firm.

“With uniform regulatory requirements and an increasingly competitive mortgage environment, mortgage rates and closing costs do not vary much lender to lender,” said Angela Hoag, director of loan acquisition at OwnersChoice Funding. “With that being said, members and their credit unions need to take a different approach to gain a competitive edge, and eMortgages can help achieve that by significantly improving the turn time from application to close, which will ultimately result in a superior borrower experience and satisfaction rate.”

She added: “Credit unions should be adapting to the changing mortgage environment by factoring in that their membership’s needs and expectations are also changing. If credit unions do not have an online presence and offer mortgage applications on their home website, then they will not be able to sustain or keep up with the eMortgage industry, and most likely lose potential clients.”

She also mentioned that credit unions should stop assuming that their members only want to do service face-to-face. “Credit unions should think about millennials and upcoming generations when taking into account what the eMortgage industry entails,” said Hoag.

Like many, Hoag expects the trend toward eMortgages to continue as more millennials and younger generations move into their prime home buying years.

“The majority of mortgages processed through OwnersChoice Funding are done electronically, and we expect this trend to continue to accelerate statewide and nationwide,” Hoag said.

So, when will the eMortgage revolution arrive? It’s already here.

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