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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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