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   ARTICLE   |   From Scotsman Guide Residential Edition   |   April 2019

Take the First Steps Down the Paperless-Mortgage Path

Digital applications are timesavers that appeal to both originators and borrowers

It is 2019 and the world is changing by the day. According to Rubicon Global, a technology-based green-solutions provider, U.S. businesses alone use approximately 21 million tons of paper each year. This means that now is the time for mortgage professionals to go green.

In order to cut costs and save the environment, many mortgage companies are turning to digital-mortgage providers to help them through the paperless process. In this context, “paperless” means ridding the loan process of all physical documents and creating an online database to upload and house all necessary information. Interestingly, BizTech Magazine claims that less than 20 percent of today’s companies consider themselves paperless.

In today’s digital era, this may come as a surprise due to the overwhelming majority of individuals who have a significant digital presence. The world is already going digital — from ordering products and services online, to banking and applying for a mortgage. This may be one of the easiest, most efficient ways that the mortgage industry can affect the world as a whole.

Preserving originators’ value

The biggest question here is, “Why aren’t mortgage companies making the first move?” There are plenty of options for mortgage companies looking to take the next steps in becoming paperless. Between digital Uniform Residential Loan Applications (1003 forms), e-closings and electronic document systems, for example, there are few reasons to explain why so much paper is being used.

Nowadays, individuals have their receipts sent to them via e-mail and they do their taxes without ever picking up a pen. More and more people are filling out 1003 applications for a paperless experience when the right digital platform is in place. With that being said, it’s somewhat of a mystery why more lenders and mortgage originators aren’t adapting to new and more efficient technology.

Many mortgage companies may fear that digital technology will eventually replace the role of the loan officer and — eventually — their entire staff. This is simply not the case, however. Once the mortgage industry becomes fully automated online, loan officers will be responsible for building relationships between borrowers and lenders, assisting with any questions or concerns they may have and ensuring a seamless approval process. 

Rather than gathering numerous documents and wasting more paper, originators will become more focused on becoming a reliable mortgage expert for borrowers. Their roles will become much more valuable while, in the process, they are more effective at protecting the environment.

Reducing costs and headaches

To put things into perspective, a 2017 Chicago Tribune report estimated that almost 2.2 billion sheets of paper are used each year in the U.S. just to complete mortgages. That’s the equivalent of more than 41,000 tons of wood and more than 260,000 trees. No one was personally responsible for this; it was a group effort that exists due to every person who prints out another sheet of paper. 

Now, imagine how many documents get lost on a daily basis and must be printed again. All this accomplishes is to add more stress to the lives of lenders and originators, and it is consequently harming the planet. This never-ending cycle could be simplified by going 100 percent digital and avoiding endless amounts of time-consuming paperwork.

The green factor of going paperless is just one perk for mortgage-industry professionals who convert to a digital-only platform. If that isn’t enough of a reason, going digital means creating a more organized and secure system of documentation. It’s nearly impossible to lose documents when they’re on the web. Additionally, going digital saves mortgage companies money by reducing the costs of printing and purchasing paper. 

In fact, when lenders and originators choose a digital 1003 application that has an integrated asset-verification system, it eliminates all paper from the loan process. Asset verification is a platform that digitally verifies all of a homebuyer’s financial documents.

The last thing that today’s borrowers want to do is worry about sending their bank statements to their originator when they are aware this step can be avoided. This is due to a multitude of reasons, including the borrower’s privacy and concerns about the information falling into the wrong hands, as well as pure inefficiency. Today’s homebuyers don’t want to take any additional steps that are not required and are likely to be supportive of companies that are working toward a good cause.

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The bottom line is that stacks of papers are not only inefficient and time-consuming, but they dramatically harm the environment we inhabit. A decision such as going paperless could have a large impact on generations to come, which is why these steps should start being taken. All in all, going paperless benefits lenders, originators and borrowers in many ways: It is more affordable, provides better security, speeds up the loan-approval process and, most importantly, saves the planet. n


 


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