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September 2023 » thefivestar.com 39 September 2023 E X P E R T I N S I G H T S portunity increases to $400-plus per loan on hybrid transactions with eNote and RON. RON transactions have struggled to scale because of their complexity, account- ing for just 1% of all transactions today. This complexity ultimately leads to insufficient settlement, lender, GSE, and notary adop- tion. Looking forward, we believe RON trans- actions will become the standard … it's just a matter of when and how we'll get there. To prepare for RON's expansion, lenders need to think about their holistic eClose strategy. To get to RON at scale, lenders need to first drive adoption at scale of hybrid trans- actions and then eNotes. Only once lenders have established this foundation of digital closing experience will they be capable of expanding to fully digital transactions. Q: Who pays for the digitization costs? K I N G : We have seen both lenders and title companies pay these fees. Some pass the fees onto the borrower, and some bundle them into closing costs. Every company works differently, and tends not to share advice on this topic. That being said, digital closings reduce the overall cost of a loan, so regardless of who pays, the overall manufacturing costs are lowered. Q: The Snapdocs report indicated that $400 per loan could be saved from digitization. What were the specific costs that were saved? K I N G : Our research analyzed the average savings across 25-plus lenders that use eClose technology. The report found that lenders saved more than $110 on a hybrid transac- tion, more than $290 on a hybrid transaction with eNote, and in excess of $400 on hybrid transactions that utilize eNote and RON. The more digital a transaction is, the more value and profitability a lender can realize. Some of the cost savings are obvious, like printing and shipping costs. But the bigger categories tend to be operational efficien- cies around automation and error reduc- tion. When you have to redo paperwork because certain information was incorrect or mistyped, or a staff member has to track down a missing document, that adds time and money—and these situations occur quite often. Almost every lender I speak with has a nightmare tale about errors, incorrect information, or missing documents. Finally, savings was also found through secondary market efficiencies, which include cutting funding cycle times, reducing rate-lock exten- sions, and eliminating lost or damaged notes. The bottom line is that any progress that lenders make toward digitizing their operations can help profitability, at least if the business uses the right technology that enables them to adopt at scale. If lenders hope to improve their margins and remain competitive, particularly in today's tumultu- ous market, digitization is something every lender must adopt.