Paper-Free Mortgages: The Wave of the Future?

In recent years, many lending options, such as personal loans, car loans, and payday loans, have become much more accessible. Streamlined application processes available via the Internet have made getting a loan and having the money in hand much faster. Mortgage loans may soon become paper-free on a broad scale as well, with innovative technologies smoothing the way.

It has become quite common to perform a broad range of financial transactions via the computer. Legislative changes, such as the 1999 Uniform Electronic Transactions Act (UETA) and the 2000 Electronic Signatures in Global and National Commerce Act (ESIGN), made more complex types of business possible to do with the quickness and convenience offered by the Internet, moving beyond the simple sorts of transactions associated with making on-line purchases and paying bills.

Among those more complex business matters that became able to be handled completely by computer were loans of various types. Because of the financial and legal complexities involved in mortgages, however, paper free mortgage lending has lagged behind in making use of the technologies that have made other business and finance transactions so streamlined today. One aspect that has slowed the adoption of more convenient and modern means of mortgage lending is that many mortgage regulations fall into the jurisdiction of the individual states and their local governments.

That is now well on its way to changing. Major lenders are beginning to make the shift to offering on-line mortgage lending opportunities and many states are beginning to adjust their mortgage regulations and record recording systems to accommodate this method of making housing loans. Arizona, for example, was the first state to allow the recording of real estate records electronically, by enacting the Uniform Real Property Electronic Recording Act (URPERA), which went into effect on January 1, 2006.

Fannie Mae, brought into being in 1938, by then President Franklin D. Roosevelt, for the purpose of making home mortgages more accessible to the average American, has played an important role in helping electronic mortgages evolve. A 2006 brochure offers an "executive overview" that provides detailed information about transitioning to electronic mortgages, titled Getting Started with eMortgages. Electronic mortgages are, indeed, the wave of the future, and can be expected to become a much more common means of managing the mortgage process.

While today, many parts of the mortgage process are being commonly performed on-line, the start to finish paper free mortgage is not yet available throughout the nation. However, software programs and other technologies are rapidly appearing, specifically designed to work with the complexities of the mortgage agreement, while ensuring the security of financial data. Some industry analysts predict that the paper-free mortgage will be a common part of the lending industry within the next 5 years. This is a positive development that will help to make the process faster and more convenient, one that borrowers and lenders alike will appreciate.