[1]Notarize [2] announced that MarketWise Advisors [3], LLC, has released an independent study of the impact of eClose with Remote Online Notarization [4] (RON) via the online notarization platform. Data found that lenders can save up to $444 per loan, and title agents up to $100 per loan. MarketWise also found that all forms of eClosing produced positive ROI, as they can be closed faster, with fewer errors, and with more money saved than with in-person processes.
Results from the study found the impact of full eClosed loans with online notarization results in significant time and money savings, is contributing to improving overall ROI. For lenders, eClosings also save lenders and settlement agents save money from direct time eliminated, transactional quality improvement, and direct costs associated with mail, printing, shipping—as well as the reduced risk of lost documents.
Lenders and title agents also reported that they’re able to close more loans faster with the same or fewer number of people by improving overall loan quality as a result of reducing critical errors, avoiding missed signatures, and unnecessary rework. Full eClosed loans also reduce funding time during post-closing to the secondary market, resulting in overall improvement in ROI.
Some important eClosing highlights found within the study are:
- 87% of respondents indicated that it may help close more loans with the same or fewer staff
- There’s a drastic reduction in time needed to close
- Lenders doing hybrid eClosing experience a reduction of about 99 minutes
- Lenders leveraging online notarization save up to 157 minutes per transaction
- Title agents save up to 104 minutes
- Title agents experienced improved lender communication, ease, and reduced time during the closing
- eClosing results in a gain in operational efficiencies, improved loan quality, and up to a 31% reduction of errors
Lenders reported experiencing an increase in ROI across the entire eClosing lifecycle, saving up to a week in the processing and funding cycle, resulting in decrease costs up to $174 per loan. Migration from hybrid to full eClosing also provides significant financial and operational components.
Some of these benefits are:
- Lenders transitioning from hybrid to RON $211.97 in total impact, a 37% uplift
- Lenders transitioning from hybrid with eNote to full eClose realize approximately $444 in total impact, providing a 91% uplift
- Title agents are able to do online notarization for eClosings experience
- $100 in savings due to reduced time, increased loan quality, and elimination of paper and shipping costs
“Consumer expectations have shifted to digital-first, and that’s an incredible opportunity for the lender and title industries to be at the forefront of both what consumers want and what is also most financially and operationally efficient,” said Terri Davis, GM of Real Estate at Notarize. “eClose is the final frontier of real estate, and we’re seeing the incredible ROI, both in the numbers and in consumer feedback, of those who fully embrace eClosing mortgages with online notarization. Wherever an organization is on their journey to go digital, Notarize is the partner to achieve your goals and provide a smooth path towards success, savings and efficiencies.”
The recently published Mortgage Bankers Association’s (MBA) Performance Report in Q3 states that the average cost of originating a mortgage is $9,140—up from $8,600 in Q2 of 2021. With the current cost of origination, combined with higher interest rates and low housing inventory on the horizon, the MBA reports that 2022 is likely to see about a 30% decline in overall mortgage originations compared to 2021. As a result, lenders and title companies are seeking ways to invest and implement solutions that will further streamline operations, grow market share, remain competitive, and improve borrower experience while providing increased ROI.