Mortgage Services

While at the MBA’s 95th Annual Convention & Expo, I was waiting in line to get my picture snapped with Erik Estrada (seemed like the thing to do) and I could not help but think how the mortgage industry has changed since Mr. Estrada appeared on CHiPs in the late 1970’s as officer Francis “Ponch” Poncherello.  For those too young, CHiPs was a TV series that followed the lives of two motorcycle police officers of the California Highway Patrol.

Now, back to the mortgage industry. With the “mortgage meltdown” having been front and center of all major news outlets over the last year, the MBA took a new angle with its theme for this year, “Winning Strategies for the New Age.”   During the course of the past year, most people in the US have been exposed to terms, such as Negative Amortization (NegAm), loan modifications, Collateralized Debt Obligations (CDO), Mortgage Backed Securities (MBS), etc. However, think about where the industry was back in the days of CHiPs….

• Savings and loans were the only institutions issuing residential mortgages
• Interest rates for home loans were in double digits
• Loan products consisted of a 30-year fixed rate mortgage
• There was no private mortgage insurance (PMI) because at least 20% of the purchase price was typically required for a down payment
• Securitization was in its infancy, having now grown from being non-existent in 1970 to a multi-trillion dollar industry today

Is it a contrast? Or, are times today becoming similar to the conditions in the 70’s? In today’s environment mortgage lenders are re-evaluating how to stay competitive. Mortgage lending has moved to a “flight to quality” with conforming loan products and most lenders are not offering the exotic loans of the past few years.  Interest rates have remained historically low – even with the recent crisis – and homeownership has risen dramatically since Ponch cruised the California highways.

Obviously, the technology used by mortgage lenders in the 70’s would now be considered very archaic.  At the show, mortgage technology was prevalent with systems for fraud, transparency, and electronic signature highlighted throughout the three day conference.  Vendors and consultants offered, as stated by the conference prospectus, “strategic options to business challenges.” At Xerox Mortgage Services, we offer a good strategic option for lenders.  Our solution, BlitzDocs®, provides collaborative electronic loan folders and e-signature technology that enables lenders to streamline processes and be competitive.

I am not a mortgage banker; I just help provide paperless and electronic signing technology to the industry.  Let me know what you think…

With the current state of the mortgage industry, it seems obvious that mortgage lenders are constantly evaluating how to cut the cost of originating, underwriting and delivering loans to the secondary market.  Paper-based documents are extremely inefficient in streamlining processes and enabling efficiencies.  Converting paper documents to electronic documents for faster turn-time and ultimately “lights out” processing has and will continue to be a hot topic.But, what is the best approach? Paper documents converted to images? Data and document combined in a MISMO Smart Doc? Some paper, but mostly electronic documents?

Recently, my colleague, Greg Smith vice president and general manager of Xerox Mortgage Services, contributed to the Mortgage Technology magazine survey on Paperless or Paper-light: Which is better? Check it out and see if you concur.

Next week I’ll be traveling to San Francisco for MBA’s 95th Annual Convention and Expo.

This year’s theme is all about creating winning strategies for the new age – a must for the ever changing mortgage industry. Those choosing to attend this year’s event will be serious players, determined to succeed and searching out best practices to do so.

Stay tuned for updates on the latest news and commentary from the show.

As fuel cost rise, there is a renewed interest in ‘green’ initiatives.  Green seems to be ubiquitous these days. From Boone Pickens talking about wind generation to the proliferation of hybrid cars, we all seem to be more environmentally aware. In the mortgage industry, the rise and acceptance of electronically signed documents is exploding. In a recent presentation to the National Press Club, Jerry Buckley and Margo Tank, counsel from the Electronic Signature and Records Association, outlined significant turning points in the adoption of electronic signatures. How is this relevant to the mortgage industry? Well, the article highlights some interesting statistics:

• 16, 753 eNotes have been registered with the MERS eRegistry, with the eNotes amounting in the aggregate to $2,837,256,202.79
• In 6 months, eNote registrations rose from approximately 500 in December 2007 to 16,753 in May 2008.
• Projected savings per mortgage loan of at least $85-$325 per loan, plus savings on other production costs up between $80- $150
• 77 percent of mortgage lenders indicated they will implement electronic signatures
• eRecording is taking place in 27 states and the District of Columbia.

As the metrics show, the industry is beginning to implement e-mortgage initiatives and essentially begin to “go green”. Most mortgage professionals define an e-mortgage as loan documentation that is created electronically, executed electronically, transferred electronically and stored electronically.  At a minimum, an e-mortgage is an e-note that is created, signed and delivered to the secondary market electronically. With the current state of the mortgage industry, mortgage lenders are keenly aware that they must become leaner and more efficient in their processes. “Going green” is a strategy they must embrace.