Mortgage tech newcomers break down old walls

Stavvy, part of the 2020 Flagstar accelerator, modeled its improvement of the loan modification process on systems for origination.

Angel Hernandez, Stavvy’s head of industry and regulatory affairs noted a Consumer Financial Protection Bureau study on digital closings, which found that consumers having access to the files that go with the closing ahead of time remotely and available anywhere had an increased level of understanding as to the content.

“We believe that the same net gains are likely present, perhaps even more so, when dealing with loan modifications,” Hernandez said.

Ginnie Mae, which guarantees securities using mortgages from three government programs, requires loan modifications to be notarized, recorded instruments, so Stavvy brings electronic notarization to that process.

Among the benefits is environmental as it reduces reliance on paper and shipping and speeds up the delivery of relief to the homeowner. 

“Overall, it’s likely to have a net positive impact on the planet,” Hernandez said.

“I think homeowner preference and just at large consumer preference toward digital convenient readily accessible solutions are something that servicers will have to respond to,” Hernandez said.

The industry is beginning to recognize the need for adoption of digital loss mitigation and servicing workflows to help inch closer to a truly start-to-finish process, he said.

“I think just the fact that we have a degree of adoption on the front end that we’ve seen, prompts all of us to begin thinking about ‘well, what else or where else can we squeeze out efficiencies once we are dealing with purely electronic collateral files?'” Hernandez said. “I think the execution of loss mitigation, and perhaps even some foreclosure handoffs, become the next natural phases of building out that end-to-end digital mortgage ecosystem.”

Hernandez believes using these tools for creating recordable documents for modified loans will also help adoption on the front end of the mortgage process.

“Perhaps somebody had not been a first mover in the digital closing space, but that in digital loss mit, [it] just made sense because of the cost efficiencies,” Hernandez said. “But now that you have the training, the enterprise expertise on how to deploy these tools and integrate them with their existing tech stack, it makes taking that next step for increasing eClosing that much easier.”