A look at how originators can digitize
By SAM GARCIA
11/2/2001

Many documents, including mortgage documents, were destroyed forever as a result of the attacks on September 11th. Cantor Fitzgerald -- which plays a significant role in the trading of mortgage-backed securities -- housed approximately 1,000 people and the documents in their possession at the World Trade Center (WTC). ABN-AMRO North America, Inc. -- whose holdings include Standard Federal Bank, Interfirst Wholesale Mortgage Lending and LaSalle Home Mortgage -- was also a tenant at the WTC.

Nearly a month after the attacks, the Los Angeles Times (Times) reported that attorneys at a Brooklyn law firm got a call from a woman in Sheepshead Bay, nearly 15 miles from the WTC. The Times said that on the tail of an eastward breeze, pieces of paper had come wafting down from the sky and into her backyard. Reportedly among the soggy and torn papers were mortgage agreements about to be signed. According to the Times, the lawyers hung up the phone and called a messenger service.

The borrowers in that mortgage transaction were luckier than others.

While recent events -- including anthrax scares -- are likely increase the rate at which e-lending moves, estimates from industry players don't project a dramatic increase in electronic mortgage closings over the next twelve months. However, much of today's existing technology offers the ability to 'Digitize' simple activities that mortgage originators currently perform using paper.

Some originators are successfully able to operate 100% on paper, and this article is not for them. But for those who seek to reduce paper and insure against the loss of printed information, take note.

While many of the suggestions that follow are impractical using an outdated 100 Megahertz computer with 100 megabytes of storage, today's powerful 1+ Gigahertz processors with standard storage exceeding 10 Gigabytes enable a more digital life.

Backup
Learn about your computer's file structure. Windows 98 explorer (not Window's Internet Explorer) -- which can be accessed by right-clicking the 'Start' button and selecting 'Explore' -- is a simple and efficient way to manage computer files. Once users understand their file structure, they can determine which ones should be backed-up. Stores like Best Buy and Circuit City usually offer a number of file backup options including Iomega's Zip & JAZ drives. Once the backup process is learned, it is a good idea to store a copy of the backup at another physical location.

Loan Applications
Most originators already have the ability to generate digital loan applications from loan origination software programs by companies such as Ellie Mae and Calyx. For those with up-to-date websites provided by companies like LionInc.com, their customers can complete the application online. By saving versions of the file periodically, a snapshot can be viewed at multiple points in the past. This is normally accomplished by printing out an application, which will not change as information is updated. By having the original handwritten app, one printed out for submission to the underwriter, and a final application at closing, anyone involved in the process can see what the applicant's situation looked like at different points during the process.

The written and printed apps (except the final) can be eliminated by saving the loan processing file with a date. For instance, Instead of saving a file as 'JohnDoe', the file could be saved one time as 'JohnDoe110201' and saved one week later as 'JohnDoe110901'. By only making changes to the 'JohnDoe' file, the others provide a snapshot at earlier points.

If the application is faxed to the applicant from the loan origination software program directly, then the task of printing the document falls on the applicant, not the originator.

Fax
Fax documents plague most loan originators. Whether it is income documents, loan applications or rate sheets, there is always some document is keeping an originator's fax machines busy.

Wholesale marketplace websites like those provided by LionInc.com help reduce the need for printed rate sheets by posting live rates from multiple lenders. However, a report published last December indicated that 82% of the respondents still check their fax machines first for rates.

With such a reliance on faxes, originators can consider online fax services such as eFax.com. In eFax's case, users obtain a fax account which includes a unique telephone number. Anything faxed to that number is then emailed to the user. The user can save the email fax as a file on computer and/or forward it to another individual to view. All of this is done with no printed documents.

Digital Documents
Scanning programs have often been included in simple office fax machines for years. Hewlett Packard's OfficeJet is one example of this type of machine. By utilizing a scanner, users are able to save digital copies of various incoming documents such as tax returns, pay stubs and divorce decrees to the customer's computer file folder. In addition, the scanned document can be faxed directly from the computer to another user, or the file itself can be emailed or copied to a floppy disc.

Changing routines -- such as changing from paper to digital files -- can be a daunting task. However, the benefit of less paper and better organization offers an attractive incentive for mortgage originators.

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