There's more evidence that the paperless mortgage, an idea that has been heralded and debated for at least the last 15 years, has a ways to go yet before reaching a 50% market penetration.
We reported a few weeks ago on a Mortgagebot study that said just 18% of banks are able to accept apps online currently.
Now there is a study out by Xerox that shows there are very few people who think there will be widespread adoption of the e-mortgage in the next two years (just 4%). Less than half think that adoption will grow to 50% of the market in the next three to four years.
However, the percentage on that last question did grow to 42% from 28% in the previous survey, meaning more industry respondents see it coming.
And there's no doubt it is coming. People research their mortgages online and often make an initial contact online even if the transaction takes place eventually in bricks and mortar. The online generation which is now starting to get mortgages of their own will demand one-click shopping for a loan (let us give them their illusion for now!). And the efficiencies of the process, along with the ecological greenness of the transaction, will be telling points.
Adoption will be quicker on the refi side than the purchase side. Who, having gone through the paper-full mortgage process of closing a loan, would not jump at the opportunity of closing a refi at their kitchen table, with perhaps a notary to verify a wet signature?
The question is: What is the holdup for a process that everyone knows is coming and wants to come?
Two things, we suspect. The first is human nature that can hold onto comforting old ways for long periods of time. Look at print newspapers and books, long postulated to perish, but which continue to perk along, if not thrive.
The second is the depression in the mortgage and real estate businesses over the last three years (four for real estate). That has caused such turbulence that many companies have battened down the hatches to survive rather than think and plan for the inevitable future.
"The industry does see us getting closer," according to Greg Smith, Xerox Mortgage Services vice president. But the mortgage process is so inherently bulky, with so many moving parts, that it has been unable to duplicate, so far, the rapid acceptance of technologies like ATMs or remote controls.
