An executive with the Minneapolis, Minn.-based WoltersKluwer Financial Services predicted that closingresidential mortgages using e-signature technology and shorteducational videos will be the next regulatory frontier in realestate lending.

Art Tyszka, general manager for residential lending at the firm,predicted the CFPB's deepand ongoing interest in consumer education and mortgage e-closingswill lead more lenders to begin using e-closing technology duringthe mortgage closing process.

The compliance technology and services firm supports 90% of U.S.banks, according to its website.

Tyszka observed that e-closing technology has been availablewithin the industry for quite some time, but that it has not beenused during the closing process because there has been no economicincentive to do so.

“Where we have seen e-signatures have been more on the front endof the process,” Tyszka explained. “Consumers are able to moreeasily sign and initial application documents electronicallybecause that has been where most of the efficiency and cost savingshas come from. But the CFPB is really very interested in theconsumer experience and consumer understanding in the e-closingprocess, and I really believe that is where financial institutionsshould prepare to innovate.”

Tyszka did not predict exactly what form the innovation mighttake, but said that he had already heard of firms experimentingwith online video technology to help consumers understandtheir recusalrights, for example.

“Maybe the e-closing process won't let you e-sign a documentuntil you watch this 30-second video clip,” he said. “Or maybe ifthe borrower hovers the mouse over a certain clause or element of adocument, a little video pops up to explain that.”

Tyszka pointed out the technology that permits these types ofinteractions already exists, and that consumers who are alreadyfamiliar with the concept of online learning are probably wonderingwhy lenders have not already deployed it.

He also mentioned that lenders should be prepared to innovatewhen it comes to data collection and reporting. The CFPB has showna strong interest in collecting more data from financialinstitutions during the mortgage loan origination process, he said,therefore financial institution lenders should start preparing toinnovate in the areas of data collection, storage, reporting andsafeguarding.