Susan Graham is president and chief operating officer of
Financial Industry Computer Systems Inc. (FICS), a mortgage
software company specializing in cost-effective, in-house
mortgage loan origination, residential mortgage servicing
and commercial mortgage servicing software for mortgage
lenders, banks and credit unions. FICS’ software solutions
have been architected to take advantage of the Microsoft
Windows platforms using Microsoft .NE T Framework and provides customers the flexibility to choose an in-house solution
or cloud solution. Reach Graham at firstname.lastname@example.org
Going Green in the Mortgage Industry
Paperless processes and energy-efficiency save money and resources
By Susan Graham
Reduce, reuse and recycle. These are the key objectives for going green and making more environmentally friendly decisions. Reducing the use of paper may be the first
thing most people think of in a business setting. This
is never more accurate than in the mortgage industry,
which produces reams of paper for every loan.
Moving toward a paperless — or digital — loan process is, therefore, an important step when mortgage
companies decide to go green. Reducing the environmental impact of technology is another crucial step
for mortgage professionals, because computers and
servers use a lot of energy. Let’s take a look at both of
these methods for making mortgages greener.
By switching to paperless processing, mortgage professionals can reduce their environmental impact.
According to the U.S. Environmental Protection
Agency, the average office worker uses 10,000 sheets
of paper per year — the equivalent of a small tree. The
mortgage process is well-known for generating a lot
of paper, so a mortgage professional’s paper usage
probably far exceeds this national average.
With document imaging and electronic delivery
now widely available, hard copies of important documents and reports are needed less often for lenders,
servicers or borrowers. With consumers expecting
instant access to information, electronic documentation is a necessity for success in the mortgage business.
According to a 2015 survey, approximately 78 percent
of mortgage professionals have technology in place
for electronic delivery of disclosures or other documents to borrowers.
For those continuing to rely on paper processing in
2018, the time to go green is now, because electronic
documents provide numerous benefits not only for
originators and mortgage companies, but also for
today’s tech-savvy borrowers. Paperless processing
relies on a system that automatically generates electronic reports and documents, providing easy access
to them as needed. Using electronic documents saves
money, increases operational efficiency for lenders and
servicers, and provides the ideal solution for record-retention requirements.
In addition, paperless documentation saves money.
The average mortgage application is 500 pages long. If
a company’s procedures involve paper documentation
throughout the entire loan process and closing, the cost
per year and environmental impact add up quickly.
The cost of the actual paper only accounts for about
10 percent of the total lifecycle cost of using paper.
These costs include not only the price of paper and
printing supplies, but also the cost of distributing
physical documents. According to Pricewaterhouse-
Coopers, it costs $20 in labor alone to file a
document, $120 to locate a misfiled document, and
$220 to recreate the document if it can’t be located.
Electronic documentation eliminates those expenses.
Adopting electronic documentation also provides a
mechanism for extracting specific information for use in
other internal and external systems, such as automatic
underwriting, title searches and disclosure documents.
Furthermore, digital documents provide a more convenient and expedited method for delivering reports
and documents to everyone involved in the process,
from borrowers and processors to closing agents and
investors. Eliminating the need to send paper documentation also saves the cost associated with delivery —
whether via interoffice carriers or external carriers such
as UPS, FedEx or the U.S. Postal Service.
Beyond the time and cost savings electronic documentation can provide, eliminating paper files also
provides a more reliable method for record retention,
which can be of great use in today’s highly regulated
mortgage environment. Computer space is inexpensive, allowing more flexibility in retaining documentation, and eliminating the time and money spent on
shredding confidential paper reports and documents.
Changing borrower expectations
Beyond the operational benefits for mortgage companies and originators, eliminating paper-based processes also can significantly improve the borrower
experience. Today’s borrowers may perceive lengthy
paper documents as wasteful and even annoying.
In 2017, buyers who were 36-years-old and younger
(millennials and Gen Yers) were the largest share of
homebuyers, at 34 percent. Most millennials expect
immediate access to information anytime, anywhere.
They also recognize and appreciate the positive
impact that electronic communication has on the environment. Millennials want the option to opt out of
paper statements and documents in favor of electronic versions.
In fact, many borrowers are interested in complet-ing their mortgage applications online. Two-thirds of
homeowners say they would be willing to complete
a loan application online. A 2016 Zillow report found
that more than half of all homebuyers applied for
their final mortgage using an online loan application.
Millennials were the most likely generation to use an
online mortgage application, at 56 percent.
Electronic mortgage application processes provide
immediate access to loan information, increasing
borrower satisfaction. Furthermore, electronic documents provide borrowers, originators, lenders and
servicers with a much more convenient method of
filing and accessing important documents and records.
Beyond reducing paper, mortgage companies should
look at their energy use when deciding to go green.
Climate change, or global warming, is caused, in part,
by burning fossil fuels and producing carbon dioxide,
a greenhouse gas that stores heat. Electricity production is the largest source of greenhouse gas emissions
Read more about saving energy
and going green at:
Cost of managing paper: sctsm.in/InformIT
Paperless return on investment:
Computer electricity use: sctsm.in/BrightHub
12 Ways to Save Server Energy:
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