Quicken Launches All E-Mortgages

A well-known name takes another try at creating the paperless real estate transaction.

May 1, 2002

Two years ago, digital, or e-, signatures were being praised as the final step needed to create the paperless real estate transaction. But the lack of a set national standard for electronic signatures in the Electronic Signatures in Global and National Commerce Act (see Tech Watch July 2000 ) stalled the innovation’s widespread adoption in many industries. Now it looks like digital signatures may finally be taking a first step toward becoming the norm in real estate transactions.

Quicken Loans is about to test the viability of electronic signatures with a new service that lets its mortgage customers fill out, “sign,” and submit mortgage applications from their Web browser. Once it’s up and running, probably within in a month of the publication of this column, this service could finally signal the practical application of a technology that could revolutionize the future of real estate. Digital signatures would allow salespeople, lenders, title companies, and clients to transfer, alter, and sign offers and counteroffers, contracts, loan applications, and all the other documents relating to a real estate transaction online.

Because the federal act stipulated only that an e-signature be a sound, symbol, or process that could be audited, Quicken Loans investigated a range of solutions and adopted a “process signature” option using the Approve It Web server developed by Silanis Technology. “Quicken installs our software on its server behind a firewall,” explains Andrea Simmons, financial industry marketing manager for Silanis Technology. The software tracks what the applicant does throughout the application process. Then all this information becomes embedded in the document, with the recorded process of the application serving as the digital “signature.”

Pre-approved Quicken Loan customers access the mortgage application process by logging on to the company’s secure, password-protected site with their previously created user ID. To create the process signature, Approve It records everything applicants do online while completing their mortgage application: what documents they see, how long they spend with each, when they click to accept the terms, and when they finally click on a “submit” button to endorse the document and submit the application. This log of activity, combined with the completed application, serves as a legally binding document.

Throughout this process, applicants are repeatedly reminded they are creating a legal document and presented with all disclosures required by law. Users can cancel their application any time before submission; they may also stop at any point, print documents for review, and return later to complete their mortgage application. On-screen tutorials that demonstrate the process will also be available at the company’s Web site. The site also lets applicants track the status of their loans online.

“We were looking for a solution that would make the mortgage application process as painless as possible for our customers,” explains Kevin McCallum, systems architect for Quicken Loans. “We wanted something entirely Web-based that our customers could use in their own browsers without the need to download anything.” He notes that in the past some companies offered mortgage applications as PDFs, but customers had problems downloading them. The goal now is to deliver an online application process that is more user friendly.

McCallum expects that the use of online mortgage applications with e-signatures will eliminate three days to a week from the application process. In the past, customers could get pre-approved for a mortgage online, but were still required to submit signed paper documents to complete the their applications. Consumers could download and print those documents themselves, or the company would overnight the actual application for them to complete and sign. But applicants often found other sources of funds during the lag between pre-approval and receiving the application.

“Now, if they’re pre-approved, they’ll be able to fill out, sign, and submit their mortgage application from their Web browser right away. And as soon we have that application, we can go to work,” says McCallum.

By streamlining the application process, lenders can reduce their costs and make it easier for pre-approved customers to get their loans. This, in turn, means buyers will be able to close sooner and the real estate salesperson will receive a commission sooner, McCallum adds. Eventually Quicken’s system may also include features that enable real estate associates to track all other activities related to the transaction, including the status of all documents, according to McCallum.

To lenders and some real estate professionals, the time and productivity savings offered by digital signatures make them an easy choice. Yet, ultimately, the near-term future of digital signatures depends on whether or not consumers embrace the idea.

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