eClosings with RON yielding a positive ROI
Notarize announced that MarketWise Advisors, LLC, has released an independent study on the impact of eClose with Remote Online Notarization (RON) through the Online Notarization Platform. The data revealed 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 a positive ROI because they could be closed faster, with fewer errors, and with more savings than with in-person processes.
The results of the study revealed that the impact of eClosed loans complete with online notarization results in significant savings in time and money, helping to improve the overall return on investment. For lenders, eClosings also save lenders and settlement agents money through the direct elimination of time, improved transaction quality, and direct costs associated with mail, printing, shipping, and reducing the risk of lost documents.
Lenders and title agents also reported being able to close more loans faster with the same or fewer people by improving overall loan quality by reducing critical errors, avoiding missed signatures and unnecessary edits. Full eClosed Loans also reduce funding time after the secondary market closes, resulting in an overall improvement in ROI.
Here are some important highlights of eClosing found in the study:
- 87% of respondents said it could help close more loans with the same or fewer staff
- There is a drastic reduction in the time it takes to close
- Lenders performing a hybrid electronic close receive a discount of approximately 99 minutes
- Lenders leveraging online notarization save up to 157 minutes per transaction
- Title agents save up to 104 minutes
- Title agents benefited from better communication with lenders, ease and reduced time at closing
- eClosing results in increased operational efficiency, improved loan quality and up to 31% reduction in errors
Lenders have reported increased ROI throughout the eClosing lifecycle, saving up to a week in the processing and funding cycle, resulting in lower costs of up to $174 per loan. The migration from hybrid to full eClosing also provides important financial and operational components.
Some of these advantages are:
- Lenders moving from hybrid to RON $211.97 total impact, a 37% increase
- Lenders moving from hybrid with eNote to full eClose realize a total impact of approximately $444, representing a 91% increase
- Title agents are able to do online notarization for the eClosings experience
- $100 in savings by reducing time, improving loan quality, and eliminating paper and shipping costs
“Consumer expectations have shifted to digital first, and this is an incredible opportunity for the lender and securities industries to be at the forefront of both what consumers want and what is also the more financially and operationally efficient,” said Terri Davis, general manager of real estate. at notary. “eClose is the final frontier in real estate, and we’re seeing the incredible return on investment, both in numbers and in consumer feedback, from those who fully embrace eClosing mortgages with online notarization. Wherever a organization is on its way to digital, Notarize is the partner to achieve your goals and provide a smooth path to success, savings and efficiency.
The recently released Third Quarter Mortgage Bankers Association (MBA) Performance Report shows the average cost to originate a mortgage is $9,140, up from $8,600 in the second quarter of 2021. With the current cost mounting, combined with higher interest rates and low housing inventory on the horizon, the MBA reports that 2022 is expected to see a drop of around 30% in the total number of mortgages compared to 2021. As a result, lenders and securities firms are looking for ways to invest and implement solutions that will further streamline operations, increase market share, stay competitive, and improve the borrower experience while providing a increased return on investment.