nCino’s Jay Arneja: The Top 5 eVault Myths Debunked
Jay Arneja is Vice President of Closing Solutions and Partnerships at nCino. nCino’s eVault capabilities are the latest addition to its cloud-based digital closing offering, which already includes eSign, eClose, RON and integrations to eVault providers.
It’s uncertain how long it will take mortgage lenders to achieve a fully digital mortgage closing process, but recent innovations are making the path much smoother.
For a completely paperless process for collateral and ancillary closing documents, lenders need each of the “digital closing five”: eSign, eNotarization, SMARTDoc technology, eNote and eVault. The first two are widely understood, at least in the abstract; just drop the “E” and they resemble legacy processes that are already a part of every lender’s workflow. The second two are becoming more commonplace in lender shops every day. But eVault still feels like new territory to many, and rightly so.
An eVault is a digital repository that enables lenders to store and manage their loan documents–including promissory notes–electronically. It acts as the lynchpin for safeguarding the integrity and legality of eNotes, so they maintain the same legal standing as traditional paper notes. In some ways, an eVault’s closest analog is the fireproof physical safe used to secure original, wet-ink signed paper notes. But eVaults are more than just static storage; they also allow users to control and track access, record status changes, set retention policies and share original documents. That means an eVault not only replaces rows of cement-reinforced filing cabinets, it also removes the need to maintain a separate access log and eliminates the expense and risk of sending promissory notes by certified mail.
An eVault is required to make the leap from hybrid closings to full eClosings. Thus, without an eVault, a lender can never realize the full potential of a digital mortgage strategy.
Top Five Misconceptions About eVaults
So why should mortgage lenders consider adding an eVault to their closing process? We’re here to remove the misinformation surrounding eVaults to show how they can solve real challenges and create new efficiencies in the lending process.
MYTH #1: We should wait to establish an eVault until all our investors are purchasing electronic notes.
You can and should get started when just a few of your investors are purchasing electronic notes; the sooner the better. That way you can work through your internal processes so you’re ready as various investors signal that they’re ready.
MYTH #2: We already have an eVault and it will be too difficult and disruptive to switch.
This myth has sidelined a lot of lenders because they didn’t want to get stuck with the wrong technology mix. You absolutely can move to a different eVault that better connects different stakeholders and offers advanced capabilities. It should still be compatible with your LOS and closing platforms.
MYTH #3: To make our investment in eVault worthwhile, we must adopt remote online notarization (RON) as well as hybrid Closings and eNotes.
You can get to a digital-driven paperless model that is right for you. Many lenders can leverage a hybrid approach with eNote and realize measurable savings for their financial institution, and then add RON or even in-person eNotarization (IPEN) when they want to. The note is really where the savings is. Our own market study indicates that with a hybrid closing you might save $80/loan, and with a full eClosing you can save $444, according to a study by Marketwise Advisors and Notarize. The ROI is a result of a faster application to funding because of the reduction in cycle time, labor costs and the potential for reduced warehouse line utilization.
MYTH #4: If we implement an eVault, staff will be cut.
In our experience, with a digital closing, lenders can do more with existing staff, and not have to hire and train more people to do the same volume. In essence, you can do more with the same people because each person can work more efficiently while focusing on more value-added tasks.
MYTH #5: We’ll have to work with several vendors and be at their mercy if things don’t work right.
There’s been some consolidation and maturation among eClosing vendors, and many are now offering end-to-end solutions that simplify the adoption of digital mortgages and accelerate capital market transactions. Assess your organization’s needs and the readiness of your counterparties. Understand what it takes to make a successful implementation. And conduct due diligence on the experience and connectivity of potential eVault partners.
It’s Time to Make Your Move
We know there’s a lot of noise out there and of the “digital mortgage five” the eVault is not well understood–yet. But that’s starting to change. We’re seeing lenders of all sizes migrate to using an eVault to reduce costs, streamline the digital mortgage process and improve the borrower experience. Lender businesses realize a range of benefits from digital closings, and often the benefits are more pronounced with larger transaction volumes.
The use of eVaults also helps streamline workflows, improve communication and eliminate errors. By leveraging eVault technology, lenders can confidently transition to fully digital mortgages, knowing that essential documents can remain protected, compliant and easily accessible.
It’s no longer an “if you need an eVault” proposition for our industry, but “when.”
(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)
