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E-mortgages?
The Internet
has been revolutionizing the way
people do just about everything. Every
day there seems to be something else
you can now do via the Internet. Soon,
you will be able to apply
for and receive a mortgage without
ever leaving your home.
A July 24, 2006 article titled, “E-mortgages’
on the way,” located on CNNmoney.com,
and written by staff writer, Les Christie,
explains how the Internet is going to
make purchasing
a mortgage loan as convenient and
easy as buying an airline ticket.
Loan borrowers will be able to complete
the whole process, from application
to courthouse registration, without
the piles of messy and confusing paperwork.
“So-called e-mortgages have gained
a lot of momentum recently, according
to Ed Albrigo, vice president of enterprise
programs for Freddie Mac, the government
sponsored mortgage
loan aggregator.”
Albrigo noted that curiosity and demand
for full online e-mortgages started
slow, but it has been picking up and
gaining popularity as of late.
“Harry Gardner, a vice president
with eMortgages with the Mortgage Industry
Standards Maintenance Organization (MISMO),
which is coordinating the development
of electronic standards for the e-mortgages,
says the industry is in its infancy
but gearing up quickly.”
Gardner continued to say that there
are a handful of lenders eager to offer
full service, while most others are
waiting for e-mortgages to be more established.
“Gardner thinks e-mortgages will
be mainstream in two to three years
and on par with paper in four or five.”
E-mortgages will offer several advantages
for the home buyer consumer.
One of the most intriguing advantages
for e-mortgages is the “turnaround
time.” E-mortgages will eliminate
the bulky paperwork and have
a mortgage processed and completed
in about two weeks, compared to the
standard 30-45 days.
“There's a limit though. ‘Some
of the time is spent on due diligence,’
says Albrigo, ‘and that can't
be shortened too much.’”
Cost is always a major consumer concern.
E-mortgages will be able to save the
consumer hundreds of dollars per loan,
while the reduction of time consuming
paperwork will increase the production
of loans for loan officers.
The consumer will be able to save about
$250-$500 per loan, and this does not
include extra incentives, such as lower
fees and interest rates.
“Even a slight discount on interest
rates can add up to big savings. A quarter
point difference in the interest rate
on a 30-year fixed $200,000 loan, could
save a borrower $25 a month - $300 a
year.”
Another advantage available from e-mortgages
is accuracy. “Corrections can
be made in many electronic documents
at once, rather than going through each
individual hard copy.”
Paper mortgages are usually not completely
assembled until closing. There are often
minor errors that have to be fixed at
this time that will delay the closing
procedure. “The completed documents
will be available for examination by
home buyers before closing to make sure
everything is clear and correct.”
All that is left now is for the courts
to except e-mortgages into the everyday
lives of consumers.
“‘There’s a lot of
difficult work ahead to get that done,’
says Albrigo. ‘But I've been dealing
with this for five years now and I'm
more optimistic now about seeing e-mortgages
come forward than any other time.’" |
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