By KIMBERLEY HAAS
The founder and CEO of the digital closing platform Snapdocs says adopting a technology strategy that reduces costs can help mortgage lenders now and as the market bounces back.
Aaron King recently sat down with The Mortgage Note to talk about the value of digital closings. He said Snapdocs, headquartered in San Francisco, is a national company founded in 2012 on the observation that these closings require all of the parties involved in a real estate transaction to connect seamlessly.
“While the technologies existed, there was too much fragmentation between parties and the transactions themselves were too dynamic to apply these technologies until you worked on connecting all the parties. The vision of Snapdocs is we build software to connect all the parties involved in a real estate closing or mortgage closing. We help them work together better and by connecting them we allow them to adopt these types of technologies to scale,” King said.
King said eClose technology is more complex than the average person realizes.
“I think people kind of misunderstand digital closing. They think of it as e-signatures on documents but that’s maybe 5% or 10% of what digital closing is. Digital closing is a set of infrastructures that connects all of the parties, all of the technology, all the participants, all of the logic, all of the rules, in any given real estate transaction so that it can be automated and digitalized to scale,” King said.
King said that mortgage lenders are looking to save money now that the whirlwind pandemic market has cooled.
“Today, it’s purely about the business analysis. ‘What is my cost of manufacturing a loan and where specifically are the places where I’m going to see the cost of manufacturing go down and how do I measure those?’ And that’s a big thing that we do with our customers. We get really clear up front around those expectations and we work really well with them to find the exact places where the cost will be reduced and then we measure that with them,” King said.
Lenders that implement eClosing technology today will be the ones that drive progress and innovation in the industry when the market bounces back because they will be able to process loans faster and more efficiently at a higher profit, according to King.
Research performed by Snapdocs suggests mortgage lenders can save more than $400 per loan by using eClose technology to digitize and automate the closing process, according to a press release.
Jen Bailey, closing department manager at Gold Star Mortgage Financial Group, said in a statement that they are adjusting for dramatic margin compression and are focused now more than ever on finding opportunities to improve profits. She said since they became customers in 2022, Snapdocs has helped make the loan process easier for borrowers, as well as those involved in the closing, post-closing, and collateral departments while shaving hundreds of dollars off each loan.
The data used for the report was collected in February and based on the estimated average cost and impact across 25 lending organizations that have either implemented or evaluated the Snapdocs digital closing platform.
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