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Special Reports
Electronic Documents, Paperless
Loans
MBA Endorses Acceptance of Electronic Mortgages
By Anthony Garritano
WASHINGTON -- The board of directors of the Mortgage Bankers Association has made
a symbolic gesture that will hopefully result in electronic mortgage adoption.
Specifically, the board passed a resolution that endorses the adoption by the
industry of residential and commercial electronic mortgages.
The decision is said to be based on a recommendation from the board of directors'
technology steering committee.
To be exact, the resolution noted that "the use of residential and commercial
e-mortgages, based on open standards, is a significant mechanism for simplifying the mortgage process and creating
other efficiencies that will reduce costs for all market participants."
The MBA intends to establish e-mortgage standards and best practices, and apply
its resources accordingly, including its ongoing financial support of the Mortgage Industry Standards Maintenance
Organization.
The MBA stated that e-mortgages will help its members stay "ahead of the
curve" and the MBA will provide its members educational and training materials.
But why should the industry take notice simply because the MBA gives e-mortgages
the green light? How has this resolution broken down the barriers to enter an e-mortgage world?
"It's important because the MBA board is made up of the CEOs of all the mortgage
companies," answered Gabe Minton, vice president of industry technology at the MBA.
"The MBA has to engage and establish leadership here to facilitate open standards
to get to a full e-mortgage so we don't have proprietary standards. The significance is the level of people that
voted for this resolution supporting the initiative."
So how far off is e-mortgage acceptance as a result? "We have a long way
to go still," Mr. Minton explained. "We've come a long way in defining an end-to-end solution. The technology
is there but gluing that technology together and deciding who to invest in still has to be figured out.
"The mechanisms are in place and the standards are coming into place,"
he continued. "We'll have an updated MISMO eMortgage I-Guide at the annual likely. There's still plenty of
work to do and we're not at a mainstream level of adoption, but paper mortgages aren't going to go away either,
they'll just become more minimally used."
An obstacle that can't be resolved by an MBA endorsement is the issue of compliance.
Keeping compliant is an increasing problem and is diverting technology dollars away from e-mortgages to some extent,
according to Roger Gudobba, senior principal at VMP Mortgage Solutions Inc. "Lenders right now are really
struggling with where to put their IT dollars, which is complicated now because of all the compliance issues,"
he said. "There's a lot of reporting required that carry penalties, which is why I feel tech dollars will
go there and maybe dilute the progress toward an e-mortgage for that shop. The tossup is such that the lender needs
to decide it they have the IT resources to build the infrastructure or if they divert them in another direction,"
said Mr. Gudobba. "It's great that the MBA has come out to support e-mortgages and both Wells Fargo and Countrywide
have stepped up and are very interested. Competition will drive e-mortgage adoption. It'll happen."
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