SMARTDocuments® 3.0 – Introducing a real automated solution that ensures “Source of Truth” processes

As featured July 7, 2023: PROGRESS in Lending Association – In the News

SMARTDocuments® 3.0 – Introducing a real automated solution that ensures “Source of Truth” processes

There has been so much talk over the years about delivering a true, automated, systematic process that ensures data and document integrity, quality and compliance throughout the origination and closing process. While there have been major investments in systems to extract data for verifying compliance before the loan gets boarded and funded these efforts are a tail wagging the dog approach in taking “dumb” pdf’s and scanning them to make them digital after the fact.

Basic challenges with above approach:

  • Missing trailing documents; when did you ever get a consistent, complete & current package first pass with all the documents 100% of the time? Ever?
  • Was the system able to effectively read all of the docs and data the first time?
  • Was the system intelligent to identify if you were missing pages or signatures?
  • Did you have ability to auto stack and index them back into the system?
  • Did you receive any audit history to verify TRID and all other compliance regulations?

Some companies are looking at the next shining object – Blockchain to overcome this but Blockchain is not going to solve the above issues as it’s only dealing with the data and not the actual document.

Finally, there is an answer! MISMO v3 Verifiable SMARTDocuments® is the one true “Source of Truth” solution.  SMART stands for Secure, Manageble, Archivable, Retrievable, Transferable and now with the recent release and approval of the Verifiable SMARTDocument format virtually all data and documents can be auto verified and certified to ensure compliance.

Start “e” and stay “e” to Deliver a True “Source of Truth”

It’s time to look at innovative technology and introduce you to a totally “new” approach – go digital and stay digital — but to get there we need a quick discussion on what it means to deliver a “true Source of Truth” via a full automated digital process and service.

  • 1st generation data: This data is as pure as it can be because it is generated from the system of record database that creates the documents which includes any changes to the data which is continuously tracked and updated systematically.
  • 2nd, 3rd and 4th generation data: Every time the data and documents are scanned, keyed in and/or manipulated. This means with each instance you get farther away from the source of truth. We refer to this as dirty data because with every party who touches, contributes to and changes the data nobody wants to rep and warrant compliance of this data. Because you can no longer trust the integrity and veracity of the data and documents, this is why investors and rating agencies require a 10/20% re-underwrite/audit of the data and documents post closing to verify compliance prior to funding. [It is estimated on average that data and documents are updated (both internally and externally) at least 20 different times by 10 different people and five different systems over the origination and closing process of the loan]
  • What about Compliance? The other topic to address is compliance. What kind of documentation do you receive around “when” data and documents are delivered to the borrower to ensure proof of TRID compliance?

MISMO Version 3 SMARTDocuments®

Introducing you to the concept of self-verifiable documents. With SMARTDocuments® SMART = Secure, Manageable, Archivable, Retrievable, Transferrable; and now Verifiable. What that means, is the native source XML data is securely embedded “inside” the documents throughout the mortgage loan origination and closing process. So now, for the very first time in the mortgage industry’s history, 100% of the data can be auto verified for completeness and compliance every time a document is generated!

In this new world when the loan is “cleared to close” from underwriting a final compliance audit is performed on the data and that “blessed” data is auto populated and embedded “inside” the documents and immediately wrapped with tamper evident seal to ensure the security, sanctity and integrity of “all” the data and documents. A date and time stamp audit trail travels with the document(s) to show evidence of compliance not only on who, but what data was changed (version control) and when the documents were delivered and eSigned as well. From a compliance tracking and accountability perspective – this is virtually nirvana!

Close with Confidence and Fund Next Day with Certainty

Think of the pickup this means to secondary marketing execution. With SMARTDocuments, you can now ensure the investor that all the data and documents meet their investor requirements “prior” to the loan closing and eClose the loan to lock it down. For the first time investors can actually trust 100% of the data in and on 100% of the documents without having to OCR dumb documents to extract to perform yet another post-closing compliance check on them prior to funding.

The CFPB introduced the idea of maintaining a Compliance Management System, (CMS) years ago and now you actually have one

Finally, executing compliance management in a totally digital fashion for every instance and version of the data and documents is retained in an eVault along with a date and time stamp audit trail.  If anyone contests the legality of the loan down the road, all that history is maintained in the eVault to show electronic proof/evidence of compliance as long as the loan is active.

And you don’t have to wait for Blockchain – The Ultimate Solution Exists Today

So much buzz, energy and investment has been focused on blockchain as the next big thing but there are basic issues that SMARTDocs solves today that blockchain may never address. Benefits including immutability, data security, general ledger, transparency, reducing compliance risk and costs are available today with embedded SMARTDocs and the eVault. So, what are you waiting for? Do you think that Steve Jobs waited for consumers to ask for the iPhone, no, he saw a market need, and opportunity to fulfill it and virtually changed the world on how we communicate. SMARTDocs has the same potential if only investors would embrace them.


About Evolve Mortgage Services

Evolve Mortgage Services, LLC based in Frisco, TX., is a top provider of tech-enabled outsourced mortgage solutions and eMortgage technology. Evolve enables companies to eliminate roadblocks and focus their valuable resources on growth. The company’s services empower mortgage lenders, servicers, and investors to reduce inefficiencies in their mortgage loan process and dramatically improve profitability. Founded and run by a team of industry veterans, Evolve provides seamless component or end-to-end loan services and creates custom strategies for each client. The firm has extensive experience in origination and post-closing services; institutional, whole loan, and servicing acquisition due diligence; MSR, and compliance loan reviews including HMDA, forensic, whole loan sales, agency deliveries and TPR securitization reviews and asset transfers. For more information visit:

CONTACT: Tim Anderson, [email protected]


§  Evolve’s Website §  Evolve’s LinkedIn Page
§  SigniaDocuments Website §  SigniaDocuments LinkedIn Page
§  MISMO Website §  MISMO LinkedIn Page


3 Reasons eMods are Revolutionizing Servicing

All lenders and servicers want to get documents completed and executed quickly. But that’s not always easy, especially when the market shifts and volumes for alternative products start to climb.

That’s exactly what’s happening right now in servicing. While the worst of the pandemic seems to be over, millions of borrowers are coming off forbearance plans and are having trouble resuming payments. As a result, requests are pouring in for loan modifications.

However, a growing number of servicers aren’t just modifying loans—they are eModifying them. In the process, they are revolutionizing servicing as we know it. Here are three big reasons why.

  1. eMods Are Fast

With an eModification, the entire loan modification process, including notarization of the new loan, can be performed online with SMARTDocs®. That means nobody has to waste time and energy mailing paper loan documents back and forth, or even manually tagging PDFs for signatures.

With eModifications, a borrower can also sign closing documents through remote online notarization, or RON. The borrower doesn’t have to wait for a notary to show up at their door. Rather, everything takes place on a video conference call. The notary reviews the documents online with the borrower and witnesses the borrower’s eSignatures.

Because the entire process is digital, servicers can process eModifications quickly and easily—often in a fraction of the time that it takes a typical loan mod.

  1. Compliance is a Snap

When modifying a borrower’s loan, servicers need to demonstrate compliance with all loan delivery and execution requirements by documenting everything. In fact, that’s even more important now, since the CFPB recently issued new rules to ensure borrowers have enough time to explore their loan options before foreclosure procedures can begin.

When combined with SMARTDocs, eModifications provide a digital audit trail that shows servicers met all requirements and all deadlines, since every SMARTDoc is embedded with information about where it was sent, who saw it, when they signed it, where they signed it, and what happened to it, you simply can’t do that with paper or PDFs. SMARTDocs also help servicers make sure no signatures are missed, too.

An added plus is that the RON process is also recorded and saved, so at any time if Fannie Mae or Freddie Mac ask the servicer for proof that the signing took place, there is irrefutable electronic evidence.

  1. Borrowers Love Them

For the borrower, eModifications are incredibly convenient. Why? Because it’s an entirely digital process, there’s no paper for someone to misplace or spill coffee on. Borrowers can fill out loan documents online safely and securely, no matter where they are—even through a smartphone.

At the end of the day, eModifications are a perfect example of how eMortgage technology can help lenders and servicers do more with less—all while staying compliant and providing a better customer experience.

A Word of Caution

Just one word of caution. Not all eModification technology is created equally. For instance, some technology providers don’t use SMARTDoc for all loan documents. Others don’t offer RONs. And very few provide all the pieces of a completely digital eModification process in one platform, which forces borrowers to hop from one platform to another, increasing the opportunity for errors and confusion.

SigniaDocuments, on the other hand, provides all the necessary components to do an eModification in one platform, including RONs, and is capable of producing every document as a SMARTDoc – on the fly! This enables servicers to easily meet borrower demand for loan mods or other loss mitigation options while saving money and time.

SigniaDocuments creates entire doc packages, not just the note, using Category 1 SMARTDocs®. Our documents never have to be tagged for the borrower’s signature and can be verified many times faster than using manual processes or OCR. And they guarantee that all information in a loan file can be read with 100% accuracy.

So the question is, why would you continue to use pdfs when you can use SMARTDocs? If you’re ready to get your eModifications done at warp speed with modern-day efficiency, give us a call at 1-877-7SIGNIA or email us at [email protected].

The Top 3 Reasons to Go Digital Now!

3 Digital Trends You Should Be Aware Of

Every lender wants to manufacture and sell loans as quickly as possible and create happy, lifelong customers. Unsurprisingly, digital technology plays an important role in helping to achieve these goals.

When mortgage volumes were high it was easy to put off, but now moving from a refi to purchase market it’s going to be even harder to differentiate yourself to compete for and capture what business there is. Now is the time to implement technology that will give you that competitive edge., it can be easy to put aside plans to adopt digital mortgage processes and simply deal with the business in front of you. A bird in the hand, as they say.

  1. Lenders Going Digital Are Soaring

Last year, global consulting firm Infosys surveyed 1,000 global financial services firms with more than $1 billion in assets on their digital transformation efforts, It found that almost all respondents had doubled their digital transformation initiatives during the 12 months of the pandemic. But that’s not the interesting part. One fifth of respondents didn’t just double their efforts—they quadrupled them. As a result, they saw a 2.4% higher profit level than the average respondent. In addition, the survey found that the more companies digitized the loan application process for borrowers, the greater profits they saw.

  1. More First-Time Borrowers Prefer Digital Options

According to Fannie Mae’s Q1 2021 National Housing Survey, first-time homebuyers were more willing to authorize lenders to access their financial records electronically compared to repeat homebuyers. Specifically, 41% of first-timers favored digital processes compared to 33% of repeat buyers. One would think that the pandemic was a major factor behind this trend. Most first-time buyers said it wasn’t—they just preferred doing things digitally. Most were younger buyers who grew up using mobile phones and digital apps and were more comfortable using the same tools to get home financing.

  1. Personalization Matters

In spite of the two above trends, it’s wise to remember no two borrowers are the same. JD Power’s 2021 US Primary Mortgage Origination Satisfaction Study, released last November, found lenders that tried to streamline mortgage refinances with a “one-size-fits-all” digital approach actually saw a reduction in customer satisfaction. What borrowers really enjoyed, the study found, was a personalized borrowing experience that blended technology with professional human guidance. In fact, such a strategy was determined to be key to retaining younger customers. If there’s any common truth behind these trends, it’s that the ability to provide a digital mortgage experience is critical—yet a lender’s digital strategy must be rich and flexible enough to accommodate all customers, whatever their preferences may be.


The best way to implement such a strategy is by enlisting a digital mortgage partner capable of providing the entire array of eMortgage products and services, from SMARTDocument® creation to hybrid eClosings to full paperless eClosings with remote online notarization (RON). To date,  SigniaDocuments is one of the few companies that offers all of these services from a single platform. If you’re ready to make 2022 the year you achieve your eMortgage goals, give us a call at 1-877-7SIGNIA or email us at [email protected].

eMortgages & Customer Support: Bridging the Gap

The Big Divide Between eMortgages & Customer Support

Some of you may be living this—we only hear about it. One of the most frequent complaints about eMortgage technology vendors involves customer service and support, or lack thereof.

Too often, the support and attention lenders receive from their tech partners is far worse than they expected. So, what is causing this big divide, and how can lenders bridge it and get the service they deserve

Bureaucracy and empty promises are common…

A 2021 Forrester Consulting survey of B2B sellers and buyers found that buyers are 34% more likely to do business with sellers that master the customer experience. But while all survey respondents agreed that the most important traits of a good customer experience were trustworthiness and reliability, many B2B providers failed to deliver—and only one in four understood that making repeated mistakes can cost them a client.

When it comes to adopting eMortgage technologies, we find that one of the biggest causes of a poor customer experience is that too many providers are riddled with bureaucracy and make decisions by committee. As a result, lenders often receive mixed messages about what a technology provider can actually do. Worse, they find themselves waiting for technologies to be created or customized for their needs—which sometimes never happens.

…and accurate, useful information is not

In 2019, Gartner surveyed 1,100 B2B customers and found that nearly 90% of respondents say they are often presented with high quality, relevant information from B2B providers, but have difficulty making sense of it. More than half—55%—found the type of information they received made it difficult to compare other providers, and 44% found the information was contradictory.

We find this to be pretty common when it comes to eMortgage and document services. While they may come with great sales pitches, most solutions rarely live up to their claims. And because they aren’t getting accurate, easy-to-understand information, lenders often end up spending excessive time and wasting their limited IT resources only to achieve lackluster results.

How our customer service stands apart

Lenders have a growing number of options when it comes to eMortgages. But between growing regulatory oversight and a hyper-competitive housing market, they have enough challenges on their plate to worry about whether the vendors they choose will deliver.

That’s why we at SigniaDocuments pride ourselves on our excellent customer service. From the moment we start working with a prospective client, we provide only high-quality information about eMortgages and our eClosing and SMARTDocument® services in a way that makes sense. Our team has decades of experience in delivering digital mortgages and many are original pioneers in the space. They will ensure you have a complete understanding at every stage of the setup process.

We also provide flexible, customized solutions that empower our clients to implement eMortgages quickly and easily, whether it’s SMARTDocuments, full eClosings with remote online notarizations (RONs), eMods, or eVault and MERS eRegistry services. And there’s no bureaucracy here to slow things down—we offer direct access to company leaders, so we’re able to respond quickly to any client’s unique needs.

By the way, our parent company, Evolve Mortgage Services, has helped lenders with every component of the mortgage process for the past 30 years, from loan origination and pricing technology to underwriting, closing and due diligence services. Trustworthy, proactive customer service is baked into our DNA.

If you’re ready to experience what great customer service feels like—and take a giant leap forward on your eMortgage goals—give us a call at 1-877-7SIGNIA or email us at [email protected].

The #1 Misconception About eMortgages

More than 20 years after digital signatures for real estate transactions became legal, eMortgages are finally within reach for any lender. Yet despite the undeniable advantages, not everyone has fully adopted them.

A big reason for this is an ongoing misconception, and it’s costing companies a lot in profits, speed and business. To this day, many lenders seem to think that creating a completely digital mortgage involves a significant amount of time, money and staff resources. While that’s been the case for some lenders who have taken the hard route to implementing eMortgages, it isn’t for others who found a better path. In fact, I know that implementing eMortgages doesn’t require a big effort, and any lender can do it without breaking the bank.

So, what’s behind this disconnect?

Where the Misconception Starts

When you start talking about eMortgages and eClosings, most people think you’re only talking about electronically signing documents. However, eSigning is just the first piece of a digital mortgage, and while many lenders offer some form of eSigning in their origination process, few have come close to adopting a completely end-to-end digital process. The remaining steps are what often appear disjointed and overwhelming to implement in the eyes of most lenders and that is because most technology providers only offer one or two pieces of the puzzle.

If digital signatures represent the first phrase of eMortgage adoption, phase two is where lenders offer borrowers a completely digital eClosing, including a remote online notarization (RON). It’s this shift that causes some lenders trouble. That’s because many lenders adopting eMortgages rely on multiple vendors for the different processes—one for signing disclosures, another for signing the eNote, another for RON, and another for eVault services and registering the note on the MERS eRegistry.

The problem is that all these platforms aren’t easily integrated with each other, and their connections to each other often fail at crucial times. Worse, instead of providing greater convenience to borrowers, they make things more difficult by forcing borrowers to move from one different platform to another with multiple logins and different interfaces.

The Value of a Single Provider

There aren’t many companies that can do it all and provide a turnkey eMortgage solution. But they do exist, which means lenders and their customers can go as far down the digital mortgage path as they desire with a single integration.

With one provider, it takes significantly less time to implement eMortgage processes than getting different technologies from multiple providers. In fact, it can take as little time to implement all the eMortgage pieces you need for completely digital mortgages—including eSign, RON, eVault, and eRegistry, etc.—as it does to implement eSignatures alone.

Though rare, it’s also possible to get digital mortgage technology and other mortgage services—such as outsourced loan fulfillment and due diligence—from the same provider as well. This means you really only need one partner to take your business wherever you want it to go. Such providers are truly rare, but they do exist, and Evolve Mortgage Services/SigniaDocuments is one of them.

How to Choose

There’s no monopoly on eMortgage technologies, but there are major differences among providers that are worth paying attention to.

First, SMART Documents are absolutely key to implementing fully digital mortgages. Paperless does not mean digital. Without a seamless transfer of data through documents and systems, you are not performing a digital mortgage, and you cannot reliably transfer data using PDFs.  It’s not just about having the note in SMARTDoc® format, although that is important. The goal is to be able to provide SMARTDocs for all documents in the loan file, even unique documents, such as gift letters.

Second, and sadly, most eClosing providers offer document services, but do not offer a full library of SMARTDocs or the ability to create SMARTDocs other than the eNote. They’re still using PDFs, which means someone has to manually set up every PDF and create signature tags before the borrower can sign them, which is an extremely painful, time-consuming, and unreliable process. Plus, because it is manual, it increases the chances of error, which defeats the purpose of going digital. As a diligence provider, Evolve Mortgage Services sees the mistakes made by manual tagging or bots that claim to do ‘automated tagging’ every day.

SigniaDocuments is the pioneer of SMARTDoc® technology and has a full library of SMARTDocs covering all loan products across all states, and Signia can create SMARTDocs for any custom loan program. Not only that, but Signia’s parent company, Evolve Mortgage Services, has been an outsourced due diligence provider for over 25 years, putting compliance first in everything they do. This gives lenders confidence that Evolve/Signia can implement eMortgages in a manner that’s compliant with their processes and procedures, as well as the ability to scale business to their heart’s delight.

While they are not all the same, eMortgage technologies are widely available today. With the right platform and partner, a lender can adopt eMortgage processes quickly, easily, and conveniently.  Considering the changes and challenges the market faces today, there’s no reason why lenders should delay going truly digital another day.

Ready to see how easy an eMortgage turnkey solution can be for yourself? Give us a call at 1-877-7SIGNIA or email us at [email protected] — we’d be happy to put you and your borrowers on the short path to 100% truly digital mortgages.



3 Changes Coming in 2022, and How to Adapt to Them

As the dust settles from one of the longest refi booms in the mortgage industry’s history, mortgage lenders are possibly headed for a new treat—one of the strongest purchase markets in years. Alas, not all that glitters is gold.

While most forecasters are projecting record home sales, the challenges lenders face heading into the new year are immense. It’s no wonder that many lenders are taking a second look at their vendors, software providers and other third-party relationships to make sure they have the support they need to have a successful year.

If you find yourself in the same boat, here’s three things to look for. Pay particular attention to the third—it’s probably the most important.

  1. High Costs

According to a recent McKinsey & Company article, “Five Trends Reshaping the U.S. Home Mortgage Industry,” most mortgage lenders are struggling with higher costs and longer cycle times, with current per loan costs ranging between $7,000 and $9,000. These costs are likely to rise as purchase loans eclipse refinances in the year ahead. In fact, purchase volume is expected to increase 9% to a record $1.73 trillion, according to the Mortgage Bankers Association.

With tight inventory and multiple-offer scenarios in most housing markets, lenders are already spending more time and money nurturing customers before they’re able to find the right home to buy. According to a recent Redfin report, the supply of homes for sale this past June reached a record low 1.38 million properties, and the median home that was sold in June and July spent a record low 15 days on the market.

As purchase volumes grow, you’re going to need an outsourcing partner with a proven track record of dramatically lowering business costs by taking time-intensive work off your team’s plate. Your partner should be an expert in non-QM loan production as well, which is likely to increase as more self-employed buyers enter the market.

  1. Millennials

It’s a fact that Millennials are driving today’s homebuying market. According to the National Association of Realtors, this demographic accounts for 53% of all first-time homebuyers. And Gen Z consumers, who are quickly approaching prime homebuying age, are right behind them. It’s also a fact that younger borrowers prefer a digital mortgage experience, as they do the bulk of their shopping online.

That’s why it’s important to have a partner that specializes in eMortgages, including eSign technology, eNotes, and remote online notarization (RON) so you can provide your customers with a truly digital mortgage experience and the ability to sign disclosures and closing documents electronically—even remotely, if your customers so choose.

  1. End-to-end Efficiency

Traditionally, mortgage lenders and servicers thought about outsourcing and technology needs separately. They turned to third-party loan fulfillment providers for operational support and due diligence reviews, and software providers for the technology to power their business.

Today, these lines are blurred, as more third-party companies now offer both services and technology. However, very few offer end-to-end solutions, which means their clients can only trust them to do so much.

The best course is to find a provider that has end-to-end solutions—both operational support and technology—that cover the entire loan lifecycle of your business. Such providers are truly rare, but they do exist and Evolve Mortgage Services is one of them.

At Evolve, we provide a full suite of loan origination, closed loan and third-party review services, and specialize in non-QM loans. Through our SigniaDocuments subsidiary, we also offer the industry’s most advanced loan document engine, a fully compliant library of SMARTDocs, and everything lenders need to implement eNotes, RONs and connectivity to the MERS eRegistry.

As the mortgage market continues to change in 2022, your business needs will inevitably evolve, too. If you’re looking for a trusted partner that provides a single source solution to help you thrive next year and continue to evolve in the years ahead, give us a call at 888-892-1843 or drop us a note at [email protected].

Why a Remote Team is a Winning Strategy

The COVID-19 pandemic created a lot of change in the mortgage industry, but no change has been bigger than the adoption of remote work. The industry learned that with the right technologies and controls, remote teams can work more efficiently and cost-effectively than teams working in an office environment.

Of course, we already knew that. Evolve has been operating remote teams for the past 20 years. But for companies that haven’t fully taken advantage of remote teams, here are a few good reasons to do so now.

Greater Scalability

The mortgage business is anything but static. Because rates, volumes and markets are always shifting, it’s nearly impossible for lenders and servicers to maintain optimum staffing levels at all times. As a result, companies continue to staff up when volumes rise and slash positions when they drop. This ongoing battle to maintain proper staffing levels is not only time-consuming and expensive but can also impact team morale.

Accessing remote teams enables lenders and servicers to break free from this vicious cycle. When origination or default volumes rise, additional work can simply be offloaded to an experienced outsourcer with remote teams working domestically. This gives companies almost unlimited scalability while also taking the pressure off HR departments and making it easier for lenders and servicers to maintain a healthy, anxiety-free company culture.

Getting the Right Expertise

Another challenge that often accompanies a market shift is a shortage of talent. We all saw this during pandemic, when low rates created a dearth of underwriters and lenders struggled to keep up with demand. Talent shortages can also invite risk when lenders move teams from one side of the business to another without providing them with the proper training.

It’s the job of a good outsourcer to meet the needs of its clients no matter what type of market they’re in. An experienced outsourcer will have a deep bench of experienced underwriters and auditors capable of filling every market need, whether it’s one component of the loan fulfillment process or end-to-end services. Leveraging remote teams can also provide lenders with expertise they may not currently have, such as originating and underwriting non-QM loans.

Access to Technology

These days, remote teams not only provide companies with the expertise they need. With the right outsourcer, lenders and servicers can also get access to better technology that streamlines operations and saves money.

Unless they’re capable of building their own systems, most lenders and servicers rely on legacy technologies that haven’t been updated in years. At Evolve, we’ve developed and continuously update our own technology for every aspect of the mortgage lifecycle, from origination to loss mitigation.

Through our SigniaDocuments subsidiary, we also provide full library of SMART Docs, as well as eClosings, hybrid eClosings, and remote online notarizations (RONs). We also have our own servicing technologies that can streamline loan modifications and loss mitigation activities, as well as predictive analytics that can help servicers proactively manage potential defaults.

Technology also enables our remote teams to work faster. In fact, our underwriters typically complete seven to eight loan files a day—roughly four times the industry average.

While not every component of originating or servicing loans may need to be outsourced, the bottom line is that remote teams are increasingly becoming part of a winning business strategy. Many of the largest and most successful companies in our industry leverage remote teams in order to better manage staff costs and focus on growth.

If you’d like to find out how remote teams can help accelerate your business, just reach out to us at 888-892-1843 or drop us a note at [email protected].

SMARTDocs Versus PDFs—Why There’s No Comparison

It would be hard to argue that digital processes are better than manual ones—especially in the mortgage industry, given the hundreds of pages of documents involved in the typical loan transaction.

And while most industry participants have abandoned paper documents, the majority have only transitioned to PDFs, which are essentially digital photos of paper documents. By using PDFs, companies are missing out on the huge benefits of going truly digital with SMARTDocs. Here’s why.

PDFs in a nutshell

PDFs are merely electronic copies of printed documents—meaning that PDFs still require human processors and underwriters to read and understand their contents. While PDFs can be read by optical character recognition (OCR) and other tools, they can’t be read electronically with 100% accuracy—which means they still require human oversight.

And if a borrower must sign a PDF, someone must manually place signature tags onto them as well. So PDFs require a lot of manual effort, which not only adds costs and time to loan transactions, but also increases the chance of human error.

The beauty of SMART Docs

SMART Docs, on the other hand, are true digital documents capable of containing an almost unlimited amount of data that can be easily read, transmitted, and stored digitally, without human intervention or even the need for OCR tools. Hence the name SMART, which stands for Securable, Manageable, Archivable, Retrievable and Transferable.

The Mortgage Industry Standards Maintenance Organization (MISMO) defines a SMART Doc as “a single electronic document that binds together data and presentation along with other information needed to maximize its performance.” With SMART Docs, whatever information the borrower sees can be guaranteed to be the same information lenders use to process their loan.

Unlike PDFs, every SMART Doc also contains a secure record of when and where it was created, modified and sent. SMART Docs never have to be manually tagged for signatures, either.

SMART Docs make a truly end-to-end digital mortgage possible. They also make remote online notarizations much easier, too, because they contain a secure, verifiable record of the borrower’s signature, whether or not the borrower and the notary are in the same room.

The importance of a SMART Doc library

When you’re ready to ditch the time-sapping PDF habit, be mindful that you’ll want to use a document provider that is equipped with a full library of SMART Docs for every document type, not just the mortgage note.

When all the documents in a loan file are SMART Docs, lenders, servicers and investors don’t have to spend time and money on staff to inspect them for accuracy. Plus, it makes it easy to perform due diligence or compliance testing on a loan file electronically in just seconds.

Very few document providers have SMART Doc libraries. That’s why more lenders and servicers that are adopting SMART Docs have chosen Evolve Mortgage Services to implement digital mortgages. Through Evolve’s SigniaDocuments subsidiary, we offer a full library of MISMO Category 1 SMART Docs. Plus, we offer a complete eClosing platform that includes remote online notarizations (RONs), which enables Evolve to deliver an end-to-end digital mortgage process.

If you’re seeking to implement a truly digital mortgage process and would like to see the benefits of SMART Docs for yourself, just reach out to us at 888-892-1843 or drop us a note at [email protected].

Getting Help for Non-Agency Loans

The non-agency market, which virtually dried up during the pandemic, is back in a big way. But taking advantage of non-agency opportunities to serve more borrowers can be challenging—and it’s about to get even tougher.

Over the past year, lenders have been originating a lot of investment property loans and were counting on originating more to keep business flowing. But under new rules, many lenders will have to find new capital partners for these loans, which is causing a good deal of confusion and stress—and demand for help.

New Limits in Effect

Thanks to rising home values, the market for investment properties and second homes is on fire. Last month, Standard & Poor’s CoreLogic Case-Shiller national home price index registered a 14.6% annual increase, the most in 30 years.

Until recently, a lot of these loans were being sold to Fannie Mae and Freddie Mac. But truth be told, that’s not what the GSEs were created to do. The GSEs are supposed to supply the housing market with a source of funds for homeownership, not “home rentership.” Investment property and second home financing is inherently riskier than owner-occupied financing, too.

So in April, the FHFA decided to tighten up the GSEs underwriting criteria for these properties. Among the changes is a 7% limit on originators selling these products to the GSEs, which will now be monitoring lenders to make sure they comply with this limit.

What This Means

The GSEs’ action has created a tremendous shift in the origination and securitization of non-owner-occupied loans, as many lenders were well over the 7% cap. In fact, the investment property loans some lenders sold to Fannie Mae represented more than 20% of their agency volume.

There’s a lot of confusion among originators over how to manage this new rule, and how to underwrite loans that are technically agency products but must now be underwritten differently for private securitization. Meeting due diligence requirements is also creating stress around loan turn times, which is causing lenders to raise prices and tighten down payment requirements.

Additionally, this scenario is creating a bit of a liquidity crunch for lenders, as launching or expanding non-agency channels of business is no simple task. To continue growing business by selling investment property and second home loans, most originators are going to need help.

Where to Find Assistance

The most obvious step is to partner with a reliable mortgage outsourcer with the non-agency expertise as well as the staff resources and technology to streamline production so originators can close loans quickly and efficiently for private securitization.

A good partner will have developed specific non-agency products and services, including pre-close and pre-purchase loan reviews, that can help sellers expand non-agency channels and scale efficiently. Typically, such providers will have more than adequate staff and leverage remote workforces domestically to ensure lenders have access to expert underwriters with non-agency expertise when they need them.

A quality outsourcing partner should also have technology capable of anticipating what capital markets need from sellers as well as an underwriting platform designed for any type of loan, including non-agency products. Even better, your provider should have partnerships with entities that can streamline non-agency loan exchanges between buyers and sellers. This is a particular area that is in dire need of innovation, but new exchanges have become available.

No doubt, non-agency loans still represent huge opportunities for lenders to grow business in a shifting market. If your organization needs help taking advantage of them, give us a call at 888-892-1843 or drop us a note at [email protected]. We’re happy to help.

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