Monday, February 23, 2009

Another reason to pursue eMortgage

The Monitor //, a monochrome CRT for the Apple IIImage via Wikipedia

For years now, mortgage technologists have been offering electronic mortgage technology, basically digital docs that Fannie Mae or Freddie Mac will accept in the place of paper documentation, to mortgage lenders who really weren't that interested. Originating eMortgages would involve changing the way lenders worked with closing agents and borrowers. It might be more confusing for borrowers, despite the fact that they use a similar keypad to buy just about anything from Home Depot, Best Buy, Wal-Mart or Staples. It might involve additional software or hardware that could be expensive or difficult to implement. Some of these excuses may have been actual reasons a few years ago, but they aren't today.

Today, eMortgage technology is affordable, easy to install, understood by closing agents and borrowers and readily accepted by secondary market investors, at least the ones that are still in the market. And here's another reason to go all-electronic now:

According to a story in the Honululu Advertiser, homeowners there are finding a handy way to stall the foreclosure process. They simply ask to see the original paper documentation.
"During the real estate frenzy of the past decade, mortgages were sold and resold, bundled into securities and peddled to investors. In many cases, the original note signed by the homeowner was lost, stored away in a distant warehouse or destroyed."
As the "victim" of possible foreclosure points out in the story:
"I'm going to hang on for dear life until they can prove to me it belongs to them," said Lovelace, a 50-year-old divorced mother who owns a $200,000 home in Zephyrhills, near Tampa. "I'll try everything I can because it's all I have left."
It's probably time now for lenders to get rid of the paper once and for all.
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1 comment:

Richard Stabile Bergen County Real Estate said...

That is very interesting. I have seen the e-mortgages done. I guess it could be a good defense in the mortgage has been sold and securitized and resold. I guess the homeowner stays as long as they can without paying the payments. If they hold on for 2 years in many cases or more, they can save up money to leave with.
I think this holding out is a common practice.