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MortgagePoint ยป Your Trusted Source for Mortgage Banking and Servicing News 34 February 2024 E X P E R T I N S I G H T S Q: The Mortgage Bankers Association reported that independent mortgage bankers lost $534 on each loan originated during the second quarter of 2023. Why are lenders experiencing these losses? Maki: While MBA's data shows IMBs and other lenders lost about $534 per loan in the second quarter of 2023, this is an improve- ment compared to their reported losses of $1,972 per loan the previous quarter. This improvement is likely attributed to a mix of variables, including a slow increase in loan volume and improving operating costs. However, in today's low volume market, operating costs still outweigh profits for many. This is encouraging lenders to keep looking for ways to reduce operating costs and improve efficiency. The good news is that many lenders have leveraged this period of low transaction volumes as an opportunity to reassess their closing strategies in a way that can both help the business now and prepare for the market's resurgence. The game-changer for many has been the adoption of digital closing technol- ogy. By automating processes for all parties involved, lenders are providing a referral-worthy borrower experience and creating operational and secondary market efficiencies in their business. This translates to less time spent on clos- ing loans, the elimination of errors, and cost savings that can quickly turn losses into profits. Plus, as a lender's portfolio becomes more digital, the larger the im- pact. At this point in the industry's digital transformation, eClosing adoption is not just a survival strategy but a requirement for ensuring future profitability, regard- less of market fluctuations. Q: How can lenders afford to transition to digital closings? Maki: For nearly every lender, the financial benefits gained by using digital closing technology offsets the investment. Digital closings provide operational ben- efits that translate to bottom-line savings. These cost savings are realized through faster closings and turn-around times in the secondary market, less physical storage needs, and a reduction in the manual hours required managing errors or lost documentation. It can be costly for lenders if preventable errors cause them to redraft documents, re-sign them with the borrow- er, or worse, buy back the loan. Because digital closings ensure all loan packages are complete and all data is accurate, the technology makes it easier for lenders to get everything right the first time. Our own platform, for example, includes AI-pow- ered document processing that automat- ically prepares docs for eSignature and checks for errors on executed packages. Closings represent the most import- ant part of the origination process. It's the last point of engagement a lender has with the borrower to leave a lasting, positive impression. DRILLING DOWN ON IMB LOSSES (and How to Turn Them to Profits) VP of Customer Success Snapdocs Todd Maki Todd Maki is VP of Customer Success, at Snapdocs, a digital closing provider. In this role, Makin leads a team dedicated to helping lenders and settlement companies automate the closing process with a referral-worthy borrower experience. Maki joined Snapdocs in 2020 as VP, Head of Business Development & Partnerships. Over a 17- year career, he served as an engineering program manager at Sun Microsystems, Director of Business Development at Sunrun, and an investment banking analyst at Citigroup. He can be reached at todd.maki@snapdocs.com.