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SMART Docs vs PDFs: Are You Stuck Using Antiquated Technology?

We like to believe that with every cloud there’s a silver lining. In the case of this pandemic, the saying rings true. Today, companies in the mortgage industry have been propelled to revisit their use of old processes and technology. Changes in laws and regulations as well as changes in consumer preferences are driving eMortgage technology forward at an incredible pace. For one, the volume of eNotes registered on the MERS eRegistry is up 267 percent so far this year compared to 2019, according to a recent Fitch Ratings report. We’re seeing a significant increase in the demand for SMART Docs at SigniaDocuments, too.

So, what’s happening here? Lenders are seeing that PDFs are slowing down business and adding costs, while SMART Docs are delivering countless benefits that are especially valuable right now. Further, investors receiving eNotes in SMART Doc (XML) format are realizing the benefits and asking why the entire package isn’t SMART. Here are five key reasons why SMART Docs are the “smarter” way to go.

1. SMART Docs Contain Much More Data

While PDFs are a digital version of a printed document, they contain a limited amount of information that can only be accessed visually. SMART Docs, on the other hand, contain an almost unlimited amount of data—including when the document was created, when it was modified and by whom and where it has been sent.

2. SMART Docs Reduce Errors and Improve Loan Integrity

In terms of accuracy, SMART Docs beat PDFs, hands down. Any time a human is required to process loan documents, as is the case with PDFs, there is a chance that data will be misread and/or mistyped into other systems, creating errors. On the other hand, SMART Docs are 100 percent digital—which means the data on SMART Docs can be read electronically with complete accuracy—eliminating outdated technology like Optical Character Recognition (OCR). In fact, if everyone used SMART Docs, there would be no need for due diligence.

In addition, if changes need to be made for any reason, a record of those changes remains with the document. This consistency also guarantees that what the borrower sees on their SMART Doc will be the same information used in downstream processes by all other parties.

3. SMART Docs Save Time

Before a borrower can digitally sign a PDF, it must be “tagged” by a machine, a loan processor, or a closing agent, leaving a lot of room for error. As a due diligence provider, we see these errors all of the time. SMART Docs don’t have this problem—as the signer and signature location are already embedded in the document—making them faster for the borrower to sign and much more accurate.

Plus, unlike PDFs, SMART Docs don’t have to be reviewed by human staff or machine technologies—reducing the total time it takes to complete the loan purchase process downstream. Because SMART Docs can be reviewed by a computer, they can be processed in an instant. This means all parties to the transaction can find and access only the data they need with complete accuracy.

4. SMART Docs Power RONs

Because they are the fastest and most secure way to deliver, sign and store loan documents—including the electronic note (or eNote)—SMART Docs are vital for remote online notarizations (RONs). RONs have picked up tremendous steam in the COVID-19 era because they allow borrowers to sign their loan documents at home in a secure online environment. Documents are instantly stored in an eVault and registered on the MERS eRegistry. SMART Docs make it possible to create a truly end-to-end digital experience for the consumer.

5. Entire Loan Files Can Be ‘SMART’

Did you know that as a lender, you can choose the format of your documents based on the needs of a particular investor or trading partner? MISMO makes it possible by providing a full library of Category 1 SMART Docs, including the most commonly used loan documents.

It’s important to note that many eClosing and document vendors—even those approved by the GSEs—only provide notes in SMART Doc format, while the rest of their documents are “dumb” documents. Lenders who want to truly see the value of a fully digital loan process should implement a full library of SMART Docs for their entire files. At SigniaDocuments, we can help. We have a fully library of Category 1 SMART Docs ready to go.

To maximize the advantages of SMART Docs, it’s critical to partner with a provider that specializes in the technology and has a full library of SMART Docs with the ability to customize their implementation for your organization.

To find out how SigniaDocuments can help you take advantage of SMART Docs today, call us at 1-877-7SIGNIA or drop a note at Info@SigniaDocs.com. We’re here to help!