As more of the mortgage process becomes digital, RON has been proving to be a powerful part of the tech transformation for industry professionals. HousingWire recently spoke with Brian Webster, President of NotaryCam, about how RON can provide a competitive advantage for lenders both in terms of being a digital capstone for customers and a means for attracting and retaining top talent in the current market.
HousingWire: With demand for eClosings continuing to grow, what makes RON a must-have for lenders looking to maintain their competitive edge?
Brian Webster: Simply put, RON is a low risk, high reward solution for lenders. It can be easy to implement with the right partner, doesn’t require lenders to alter many existing processes and helps deliver a superior closing experience, which may be the most important pro on the list. The closing ceremony is the last chance for lenders to make a positive impression on their borrowers and often has the greatest impact on the borrower’s overall perception of the lender and their experience, as well as any online reviews they may publish.
While rates are on the rise, most borrowers won’t find a significant enough rate difference when comparing lenders to make interest rate the main factor in their decision. In fact, many of today’s borrowers are choosing their lender based on the experience that can be offered and wanting to ensure it matches their lifestyle. RON allows borrowers to complete their closing from anywhere at any time, giving them the freedom to live their lives with minimal disruption, especially in the unfortunate, but not unlikely, cases when closings must be rescheduled.
For lenders looking to remain competitive, it’s not just about offering the lowest rates in town. By using RON to offer convenience and provide experiences that exceed borrowers’ expectations, lenders can retain some of the most important business drivers in our industry – positive reviews and referrals.
RON also offers a competitive advantage from a recruitment and retention standpoint. Now more than ever, lenders are looking to top-performing loan originators to drive business amidst dwindling volumes. In turn, top LOs are looking for every edge they can to win new business.
As an industry, we observed first-hand during the pandemic the transformative power technology has over the mortgage origination process, especially with the borrower’s experience at closing. RON played a significant role in that transformation, and it stands to reason that the lenders that can offer an edge via RON are more likely to earn the loyalty of those high-performing LOs.
HW: As lenders look to partner with RON platform providers, what should they be keeping top of mind?
BW: To meet Mortgage Industry Standard Maintenance Organization (MISMO) and investor standards, a RON platform should provide continuous, synchronous audio and video feeds that contribute not only to a smooth closing process but also to the required credential analysis and authentication procedures. In addition to minimum industry standards, RON platforms and RON service providers must be able to implement and apply any required overlays from transaction stakeholders, such as secondary market investors and title insurance underwriters. RON platforms should also securely record significant actions taken as part of the RON transaction as part of the audit trail.
Security measures should employ data protection safeguards as well as provide a tamper-evident method by which a notary can export the Notarial Records for functions such as county recording. Additionally, all documents notarized need to include a statement meeting the needs of both federal and state regulations affirming the use of RON technology.
Beyond ensuring the requirements for regulators and investors are met and providing a smooth closing transaction, RON platforms should be able to scale to provide mortgage lenders and their settlement agents the competitive advantage of closing how the client wants to close and allow multiple parties to join the signing ceremony, feats NotaryCam proudly boasts.
Additionally, we’ve found that experience matters in executing RON transactions in a real estate capacity. There aren’t many scenarios our team of notaries hasn’t experienced in the eight years NotaryCam has been in operation. Having that wealth of experience to fall back on helps ensure we can get each transaction over the finish line even when last-minute issues arise.
HW: How should lenders prepare their businesses internally for the addition of RON?
BW: Not much is required when lenders implement RON, and the impact on existing processes, especially from the closing perspective, can be quite minimal. The biggest challenge we see most lenders facing is getting employee buy-in.
It’s no secret that most people are resistant to change, often employing an “if it’s not broken, don’t fix it” mentality. Closings may not be broken, but they aren’t the best they can be for lenders or borrowers. Thus, one of the most important things lenders can do to get started with RON is engage in change management to prepare their people and shift their mindset.
HW: What is NotaryCam doing to help lenders integrate RON into their business models?
BW: Most lenders struggle with knowing where to start and everything that needs to occur to support their digital mortgage transformation. While there are numerous resources available, it can be overwhelming at times for newbies. I have done this with two lenders and have personally seen most of the potential bumps in the path to adoption that a lender can encounter. Lenders are normally focused on doing everything themselves and not taking advantage of their closing process partners – title and settlement providers. While there’s not a “one size fits all” approach that will work for every lender and every transaction, finding the right title and settlement partners can alleviate most of the burden of implementation.
As part of the Stewart family of companies, NotaryCam is working closely with the Stewart direct and agency leaders to provide them the tools they need to bring RON closing options to their lender partners. We strive to minimize the impact the implementation of digital closings and RON transactions have on the lender’s existing process. We don’t require the lender to conform to our process but ensure we can fit our solutions into the lender’s existing closing and post-closing processes as much as possible. Our tagging capabilities allow us to receive the existing set of lender and title closing documents without requiring the upstream systems to make any changes. In addition to the ability to tag documents, our publicly available application programming interface (API) integration has also simplified the integration and client onboarding process.
We are constantly looking for ways to improve the experience for both the user and our clients, and we want it to be as painless as possible for lenders to implement RON and digital closing processes.
HW: As the new president of NotaryCam, how do you plan to expand the company’s RON products and services?
BW: NotaryCam has long since been a leader in RON, but that doesn’t mean that we can be on cruise control. It seems as though there are new providers entering the market every week, and we must continue to work just as hard to retain our position as a leading RON provider. While there are certainly ways our products and services can be expanded to ensure all parties walk away from the closing table with a positive experience, one of my first priorities is to focus on driving adoption and education throughout the mortgage, real estate and title industries.
For those of us that have been focused on the closing process, data from a recent Stratmor study confirmed what most of us already knew – the closing process is where lenders can improve the borrower experience the most. One in five borrowers encounters an issue during the mortgage process that impacts their overall satisfaction and 70% of those issues occurred during closing. For 38% of borrowers who experienced issues during closing, it resulted in a 34-point drop in a lender’s Net Promoter Score (NPS). With compelling data such as this, there shouldn’t be anything stopping lenders from implementing RON technology and reaping the benefits.
Even before completing our first RON transaction in 2012, NotaryCam has been a leader in the movement for RON legislation nationwide under the stewardship of our outgoing company founder Rick Triola, as evidenced by the fact that NotaryCam has been trusted to serve more than 1 million notarizations worldwide. Rick has been a die-hard advocate for RON adoption from the county level all the way up to the National Association of Secretaries of State and the GSEs. He is truly the pioneer of RON in the real estate space, and I intend to honor and carry on that legacy as we continuously refine the RON/eClosing process to make it more accessible and more ubiquitous.
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