Credit Unions Go Green and Save Cash With Electronic Closings
OGDEN, Utah -- Kathy and Russ Rosander refinanced their house this month with America First Credit Union. The closing took 20 minutes at the closing agent's office and most of it was done while they were in their pajamas.
The Rosanders were participants in the Utah credit union's first electronic mortgage closing.
"I loved it," said Mrs. Rosander. The closing documents were e-mailed to her home on Friday. She and her husband reviewed the documents at home on Sunday night, indicated acceptance of the documents online and finished the short closing the following Monday.
In keeping with the paperless aspects of technology, the Rosanders' closing documents were burned on a CD, which they took home with them.
America First is one of only a handful of credit unions that are taking advantage of technology to go green, save cash and make mortgage closings easier for members.
"We like to be first in technology and things that are convenient for the member," Karen Laybourne, America First Credit Union's mortgage operations manager, said in a telephone interview. "It reduces closing time from an hour or more to about 20 minutes," Laybourne said.
The Utah-based credit union joins a short but growing number of credit unions offering e-closings. BECU started with a pilot in the last quarter of 2007 and rolled out e-closings in May. Since then the Washington State-based credit union has had 233 signings, representing over $60 million in mortgage volume. Texas Dow Employees Credit Union has been doing e-closings for two years. Loretta Williams, vice president of mortgage lending, estimated that TDECU has done about 30 electronic closings.
It was unclear but sources said only a few credit unions and about six banks offer e-closings. And it seems the largest credit unions are the early adopters as America First, BECU and Texas Dow are all in the billions-in-assets category.
Todd Pietzsch, a BECU spokesman told Credit Union Times, "We are always looking at ways to improve the member experience and improve processing efficiencies and e-signings allowed us to improve in both of these areas."
"Members are able to review their documents at any time prior to scheduling an appointment with the escrow agent for actual signing so they are not overwhelmed with paperwork and stressed at their actual closing. With ample time for review and pre-signing, the process is more informed and significantly faster," Pietzch continued.
Members who decide to do an electronic closing log in to a Web site one to three days before closing using a supplied password. Members then review and accept their mortgage loan documents from home via the secure site using touch screen technology. The touch screen-based method is designed to accommodate all consumers regardless of their experience with a computer or any physical impairment that may make reading documents or signing a difficult task.
At closing, the consumer signs documents using an electronic pad similar to that used at many department stores. But, because the member has already accepted the documents, the member only needs to sign the pad once to have the signature appear in the appropriate place on the documents that have already been accepted.
Documents that need a witness can be completed anywhere a wireless Internet connection is available also using an electronic pen pad provided by the closing agent.
At closing, consumers are given a CD or a USB flash drive containing their paperwork. In addition, their files are stored online for up to seven years after the transaction.
E-closings require fewer signatures than conventional closings. Conventional closings require that members separately sign more than 30 documents. In an electronic closing, members only have to sign three or four documents. "E-signings only require two signatures from each borrower instead of the usual 15 to 20 required using the traditional process and it eliminates a large pile of paperwork," Pietzch said.
Member feedback has been positive. TDECU's Williams said members enjoy e-closings. She explained that member apprehension quickly gave way to delight after they actually went through the experience.
"We have had great responses from the members on the quick, efficient closing and ease of review and not having to sign so many pieces of paper at closing. We also provide them with a free USB flash drive with copies of their documents loaded on it in lieu of them having to carry and store a large amount of paperwork."
In addition to saving time, e-closings also save trees and cash. BECU said the cost to originate a loan has plummeted by as much as 62 basis points using the technology.