Study Finds RON Drives Impactful ROI for Title Agents, Lenders
February 10, 2022
Title agents can save up to $100 per transaction and lenders up to $444 per loan when electronically closed with Remote Online Notarization (RON), according to a study by MarketWise Advisors.
MarketWise Advisors independently evaluated the financial and operational impact of the Notarize electronic closing and online notarization technology platform. The process included a survey and interviews with 661 individuals that use Notarize, including lenders and settlement agents.
The study found that any form of electronically closed transaction produced positive ROI, as they can be closed faster, with fewer errors and with more money saved than with in-person or legacy paper processes.
The results from the study found that the impact of full e-closed loans with online notarization results in significant time and money savings, contributing to improving overall ROI. The savings stem from shorter closings, transactional quality improvement, direct costs associated with mail, printing shipping, and reduced risk of lost documents. Lenders and title agents also reported that they are able to close more loans faster with the same or fewer people, and improve overall loan quality by reducing critical errors, avoiding missed signatures and unnecessary rework. Full e-closings also reduced funding time during post-closing to the secondary market and ultimately results in an improved, measurable overall return on investment.
Highlights of the study:
- 87% of those in the study indicated that e-closings may help close more loans with the same or fewer staff.
- There’s a drastic reduction in time needed to close via an e-closing:
- Lenders doing hybrid e-closing experience a reduction of about 99 minutes.
- Title agents save up to 104 minutes and experience improved lender communication, ease, and reduced time during the closing.
- Lenders leveraging RON for a full e-closing save up to 157 minutes per transaction.
- E-closings results in a gain in operational efficiencies, improved loan quality and an up to a 31% reduction of errors.
- Time is money, and lenders experience increased ROI across the entire e-closing lifecycle, saving up to seven days in the processing/funding cycle, and decreasing costs of up to $174 per loan.
- Migration from hybrid to full e-closing provides significant financial and operational benefits, including:
- Title agents able to do RON experience about $100 savings due to reduced time, increased loan quality, and elimination of paper and shipping costs.
- For lenders transitioning from hybrid to RON $211.97 in total impact, a 37% uplift
- Lenders transitioning from hybrid with e-note to full e-close (online notarization, e-vault, and e-registry) realize approximately $444 in total impact—providing a 91% uplift.
A 2021 digital closing survey by ALTA, found 52% reported closing times decreased utilizing RON due to the number of documents signed ahead of time, while 43% reported cost savings. Implementing RON technology comes with a cost, however. The average expense to implement RON—including software, equipment and training—was just under $30,000 per office, according to the survey.
As of January, 39 states have passed RON legislation.
The recently published Q3 Mortgage Bankers Association’s (MBA) Performance Report states that the average cost of originating a mortgage is $9,140, up from $8,600 in Q2 2021. With the current cost of origination, combined with higher interest rates and low housing inventory on the horizon, the MBA reports that 2022 is likely to see about a 30% decline in overall mortgage originations, as compared to 2021. As a result, lenders and title companies are seeking ways to invest and implement solutions that will further streamline operations, grow market share, remain competitive, and improve borrower experience while providing increased ROI.
“Consumer expectations have shifted to digital-first, and that’s an incredible opportunity for the lender and title industries to be at the forefront of both what consumers want and what is also most financially and operationally efficient,” said Terri Davis, general manager of Real Estate at Notarize. “E-close is the final frontier of real estate, and we’re seeing the incredible ROI, both in the numbers and in consumer feedback, of those who fully embrace e-closing mortgages with online notarization.”
Contact ALTA at 202-296-3671 or firstname.lastname@example.org.