Latest Way to Close the Deal:
At Your P.C. in your P.J.’s
by Patricia Miranda
Content That Works
Bob Kaestner entered the mortgage industry 20 years ago, when face-to-face service was the norm.
Slowly, lenders started doing more work over the phone through call centers manned by specialists who could process an entire application without every meeting the borrower in person.
Now the latest thing is the e-mortgage, which can end with what is known as a “bunny-slipper closing” – the buyers seal the deal while sitting in front of a home computer in their pajamas. Kaestner, a vice president of Metrocities Mortgage in Baltimore, said, “We’re approaching a point in which 80 percent of the applications are taken in a non-personal form.”
The idea of paperless mortgages surfaced during the late 1990s, but many homebuyers aren't ready to go online for the entire process. Consumers worry about identity theft because mortgage applications require personal financial information, and few people are completing the entire transaction in a complete electronic format, experts say.
But shoppers are using the Internet to compare mortgages and fill out applications. But beware, say experts, of how much information you share.
“By all means don’t fill out loan applications and give your Social Security number to someone who may sell your name to 10 lenders,” said Traci Gregory, national sales manager of the Atlanta-based Anderson Lending Group.
Gregory stressed that borrowers should understand the difference between mortgage information sites– which don’t broker loans or lend money but merely provide information and rates – and direct lender sites. Lender sites, created by larger institutions that make mortgage loans, offer visitors access to product information and encourage a preliminary application.
Gregory says there are also loan generators that collect personal information, through applications, and then send it out to various lenders. She and other professionals warn against giving too many individuals full access to personal financial information.
Reputable companies will always give borrowers the opportunity to speak with a live person at some point in the process. Buying a home “may be the biggest decision people make in their lives,” Gregory said. “You do need to reach a level of trust with the person who is taking care of the business for you.”
The lending industry sees the totally paperless mortgage as the inevitable next step, but the industry must first deal with a lack of borrower confidence, according to one expert.“
It is very easy to forget that for many, if not most borrowers, the mortgage process can be confusing and intimidating,” said Sig Anderman, chief executive officer of Ellie Mae, Inc. in Dublin, California, a provider of Internet services for the mortgage industry.
Assuring borrowers that their electronic signatures are valid and secure is a great challenge, Anderman thinks, but changing demographics and a growing acceptance of Internet commerce will make bunny-slipper closings more common.“
The next generation of borrowers, having grown up in an electronic world; they will be much more amenable to the whole experience,” Anderman said.
