An electronic mortgage process could shave 30 days off of the average 52 days it takes to close a loan and save the industry an average of about $1,100 per mortgage, or roughly $1 billion a year, according to estimates from a team put together by Fannie Mae.

The team has come up with three ideas to make the entire loan process, starting with the consumer, digital:

  • Borrower financial passports: online employment and financial profiles that borrowers can share with lenders without the hassle and delays involved in providing paper documents;
  • Loan file service: electronically bring together all of the data from the origination and closing of the loan into one repository, saving time, money, and effort; and
  • National mortgage registry and clearinghouse: enhancements to a decade-old system, the MERS eRegistry, that keeps digital records on electronic promissory notes for real property.

Only about 25,000 mortgages had electronic promissory notes in 2013 — roughly 1 percent of all U.S. mortgages originated last year, according to Michael Cafferky, product development manager at Fannie Mae.

But the team said electronic mortgages could become prevalent in as little as two or three years.

The Consumer Financial Protection Bureau (CFPB) recently released guidelines for a pilot project designed to evaluate whether electronic closings can help consumers navigate the mortgage process better.


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