Because of this, lenders almost always require that a third party act as custodian of that collateral. After a completed closing, the original documents are shipped to the custodian, where they are labeled, bar-coded, and logged in before they are certified for accuracy. The custodian reviews the files to ensure they have been signed and dated correctly and match the proper parameters.
At Concord, physical documents are held in a waterproof facility with a four-hour engineered fire rating and a pre-charged suppression system. This facility can only be entered by specifically authorized employees. These employees track all collateral using a bar-coded system. And, of course, developers can track their own documents are using Concord’s BITs reporting platform
In recent years, many leading timeshare developers have moved to electronic closings and documents. The new systems digitally integrate all business process, from sales presentations to customer contract execution, while providing a legally-binding, securely vaulted management solution with a robust audit trail for the signed contracts and loans.
When it comes to document custody, the process remains the same but of course it looks quite different. Rather than a large storage facility, these documents are stored in an eVault in the cloud, which also has highly restricted access. The advantages of e-docs are many. First, after the initial investment to set up an electronic closing system and electronic signatures, cost recovery begins immediately. Electronic documents mean there’s no need to print voluminous closing documents, and there’s also no need to pack those documents up and mail them to your custodian, saving both postage and labor.
Buyers are able to complete their closings electronically, and the software guides staff and buyers through the process, ensuring that all signatures are made and all required disclosures are initialed. Says one chief financial officer, “You’re not missing any signatures or initials, which used to require us to sometimes mail documents to buyers for completion.”
Once the documents are in Concord’s eVault, the savings continue. Custodial fees and document storage costs are reduced, and once a loan is satisfied, collateral can be returned electronically, again saving on postage.
There’s one more key advantage. After closings are complete, the documents arrive at the custodian almost immediately, meaning that the custodian can complete the certification process, and the lender can release the funds. This can cut two to three weeks from the timeline.
Of course, Concord’s eVault also has rigorous security. “Each portfolio has its own login credentials, and we are able to assign specific privileges to anyone who has access,” explains Concord’s manager of document custody. “Most users will only be able to view the files, not move them or alter them.”
While developers have multiple reasons to appreciate eDocs, lenders do, too. “Instead of having to travel to a custodial facility and spend days looking at documents in a conference room when conducting custodial audits, we can sit right at our desks and review collateral,” an auditor for one lender explains. “Eliminating travel expenses related to a custodial audit saves developers money as they typically have to bear those custodial audit expenses.”
For those developer who aren’t ready to switch to electronic documents, lenders aren’t discriminating against physical documents. “We handle paper docs and eDocs from several developers, and while we don’t express a preference, we’ve had a great experience with eDocs; the process is so efficient,” one lender representative says. “Right now, this largely seems to be of interest to larger borrowers, but I think eventually costs will come down and everyone will move this way.”
So, at Concord, our fire-rated storage facility will be needed for many years to come, but for clients who are ready to go “e,” we stand ready to assist.
Concord has the expertise to manage every aspect of your loan operations. As a leading loan servicer with over 30 years of experience, we deliver compliant, flexible, and scalable solutions to your unique needs.
To learn more about Concord’s document custody services or how your company makes the move to e-documents, contact Ericka Schwarm, VP of Business Development today at (480) 737-0389 or eschwarm@concordservicing.com.
