Creating collaborative networks is the key to going paperless in the mortgage industry

Judson Phillips, director of product marketing, Advectis Inc.

As published in Scotsman Guide's Residential Edition, September 2005.

Today’s mortgage process is collaborative and paper-saturated. The variety of communication methods (e-mail, fax and overnight express) has helped create a tremendous paper burden. This shows through higher loan-processing and paper costs, greater inefficiencies, poor service and longer turnaround times. The fact is, the paper volume has become staggering as the industry has grown. Paper remains the main medium for communication among all mortgage participants, from originators to servicers.

There is a move toward making the loan process less paper-intensive and at the same time, offering access to documents to all mortgage-industry participants. One way to cross the gap between today’s mortgage industry and tomorrow’s paperless utopia is with a collaborative network. This network can improve the loan process, save money and offer a true paperless platform for document-sharing and workflow.

What is a collaborative network?
Soon, a mortgage-industry data standard will be as much a part of doing business as the Internet has become. For business partners to use those standards in the most efficient manner, a collaborative network has to foster effective interaction and ultimately provide the industry with the bridge to SmartDocs and e-mortgages.

A collaborative network provides an on-demand, Web-based service that enables all participants in the mortgage process to electronically capture, submit, organize, underwrite, audit, share and archive loan documents. It is integration-ready, offers better data transfers and uses extensible markup language (XML).

Collaboration among mortgage-industry players occurs in many forms, including simple shipment of documents, two-way paper exchanges, connecting paper to electronic systems and providing access to paper documents. To dramatically improve today’s paper-based process, the documents must not only be converted into electronic forms, but they also must allow the industry to communicate and share electronically in a way that mirrors how the industry works.

What ‘going paperless’ means
A lot has been written about “going paperless” in the mortgage industry, with much of it focused on an idealistic definition. For some, the phrase means that no piece of paper is ever used by any participant in any step of the process. This definition is flawed, however.

Going paperless does not mean that paper is absent from the entire process. Rather, it means that paper use is dramatically reduced (or eliminated) at the point of entry into any part of the mortgage-loan-processing cycle.

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