The 1999 National Association of Realtors convention in Orlando was memorable for its focus on technology, just four years after former NAR chief economist John Tuccillo predicted that Internet would change the way Realtors would do business forever.
I recall that, going into the conference, two providers of the revolutionary 360-degree tours had decided to merge, yet the banners of both remained draped across the front of the Orange County Convention Center for the rest of the annual meeting.
Every seminar or educational session focused in some way on technology, much as the NAR meeting in 1997 had been overwhelmed by efforts to create partnerships between U.S. Realtors and counterparts in other countries -- especially the former Soviet bloc and Russia itself.
One technology seminar I attended was a discussion by a group of mortgage lenders and brokers about the impact the Internet was having on the way consumers shopped for loans.
One speaker, an executive of Countrywide, observed that from a marketing standpoint, the computer was simplifying the lending process and the point-of-sale mortgage process. "But the loan can't close with a click of the mouse. There still has to be face-to-face contact, and a physical signature is required," he said.
Although I've spent the last year honing my technology skills so much that I'm planning to teach a course for Realtors on the topic, I tend to be a bit of Luddite where the computer and my money are concerned.
And when it comes to Internet lending, the technologists in the industry believed we'd be farther along than we are.
I received an update on the topic a couple of weeks ago from the folks at Secured Funding, the technology-saavy mortgage lender in Costa Mesa, CA. The Secured Funding people agree that "despite the predictions, the so-called electronic mortgage is not a reality." Electronics and the digital age are, however, looming over the horizon: "e-signatures, e-recording, e-mortgages and e-value assessment," they say.
More than five years after the Electronic Signatures in Global and National Commerce Act (E-SIGN Act) went into effect, "counties are adopting e-recordings and pieces of the e-mortgage puzzle are starting to come together, but e-signatures are far from a household word at the mortgage closing tables."
The e-signature can range from a click online with a digital signature seal over it to a physical e-signature pad at the closing table.
"No specific timetable exists for industry-wide adoption of e-signatures, but industry experts [quoting the Mortgage Bankers Association] estimate two to five years until most origination and closing documents will use e-signatures, although some participants see it happening sooner."
Using e-signatures, the e-recording of a mortgage could wind up as the final piece to the e-mortgage puzzle.
Secured Funding quotes information from the Property Records Industry Association showing that electronic recording systems are growing. The e-recordings include the process of receipt, examination, fee calculation, payment and endorsement of recording information and the return of recorded electronic documents that were submitted for recording in a county's land records office.
A true electronic mortgage is a totally paperless transaction from end to end. It begins with origination through post closing and on into the secondary market, including electronic registration of notes and deeds.
Among the 3,142 individual county jurisdictions in the United States, just a handful has the ability to electronically record and store documents that would be part of a paperless package. Only a few states passed enabling legislation establishing standards for electronic recordation. Many more counties need to come online, agree on an acceptable technology to use, purchase equipment, have enabling legislation, and training, Secured Funding says.
While Fannie Mae has been in the forefront of e-mortgages, the secondary market has shown a reluctance to purchase closed loans without original paper documents. Brokers, who originate most home-equity loans, are also out of the loop right now.
Acceptance of Automated Valuation Models (AVMs) as a substitute for live appraisals has been varied, and appraisers are facing increased pressure on profits.
"Most projections suggest that by 2010 the e-age will be closer to reality as lenders and originators and counties complete the necessary capital additions, regulations become clearer and the need to improve margins continues," Secured Funding says. "Technology will be essential to future success in the industry. If you don't know how to use it, your business may not survive."
I predict in 2010, I'll still be mailing in my bills, if I still have any.
