BECU goes Green with Paperless Mortgage
The loan files at BECU are empty, in fact, for the past year, they have been non-existent.
Washington’s largest credit union began offering members the state’s first “paperless” mortgage about a year ago and the program has been a remarkable success.
Last month Joe Brancucci, executive vice president and chief lending officer at $8.5 billion Boeing Employees Credit Union filled an ACUMA (American Credit Union Mortgage Association) audience in on details about how BECU pioneered an entirely paperless mortgage experience.
“Members electronically receive their closing documents as least 24 hours before closing. Escrow companies receive them as much as seven days in advance,” Brancucci said. ”Our members sign their closing documents electronically, doing so with two signatures instead of the usual 15 to 20 required using the traditional process. In the end, they go home with their closing docs on a USB drive. This appeals to everyone involved in the process.”
Paperless mortgage lending is showing to be significantly less stressful for members on closing day and is more efficient for the credit union as well. No more 4-pound stack of papers that borrowers have to provide, receive and sign to qualify for a home loan: good-faith estimates, truth in lending statements, lead-paint disclosures, bank account statements and multiple years of tax returns.
In 2001 the paperless mortgages became possible after the federal government decided that electronic signatures are acceptable and legally binding for a variety of business transactions, including mortgages.
Brancucci said that since BECU began the process of introducing technology into the mortgage process, the cost to originate a loan has plummeted by as much as 62 basis points and BECU now processes 1,200 mortgage applications per month earning the Washington credit union a $1 billion portfolio, with practically no paper involved. The mortgage lending department employs 35 full-time staff, including five supporting positions.
“BECU isn’t entirely paperless,” Brancucci said. ” There are only a handful of the nation’s county recorders that will accept electronic files, but paper copies for county recorders are the only remnants of the old system.”
Anyone who has bought a home in the last decade knows that the process is stressful, considering the amount of negotiating, anticipation and paperwork that is involved. But closing a deal is much easier at BECU.
The efficiency of paperless mortgages and the elimination of the reams of paper that plague the process of financing the purchase of a new home is what sold Kelly and Jeff Maltin of Everett, WA to procure a mortgage at BECU on a three-bedroom townhouse.
“I was freaked about buying the house but when I heard we didn’t have to sign a million pieces of paper it made everything a lot less stressful,” said Kelly. ” I also loved that the whole process is environmentally friendly.”
Brancucci said that it’s not a question of ‘if’ other credit unions are going to make the transition to image-based lending, but a question of ‘when.’”
“It’s become clear that those who survive and thrive are going to be the credit unions that embrace efficiency,” he said. ” Embracing efficiency in the 21st century means moving toward a paperless business model– and doing so in the best possible manner.”