The Mortgage Bankers Association of America enters its 88th year facing an interesting mix of challenges and opportunities.

Technology promises to streamline business practices and offers a whole new way to reach customers. At the same time, providing affordable housing continues to be a chief objective.

New technologies are dramatically changing the way real estate finance companies do business.

In October, for example, the very first all-electronic mortgage was completed. In fact, the whole real estate transaction - from listing to closing - now can be done online.

Consumers are just beginning to embrace this technology. As an industry, we can help them understand and use these tools, which can provide borrowers with the three C's: convenience, competitive prices, and choice.

The pace of change is more rapid than before, and there is uncertainty about what technology, namely the Internet, will do to the mortgage business. While it took radio 38 years to garner 50 million listeners and television 13 years to acquire 50 million viewers, the World Wide Web grew from zero to 50 million users in just four years.

The Internet research firm International Data Group Inc. predicts there will be 210 million U.S. Internet users by 2004.

That sounds overwhelming, but the industry must see the Internet for what it really is: a lower-cost origination channel for established lenders and an easy entry platform for new competitors.

It's also a "process enabler," a tool that lets lenders serve their customers better. And that's the key. Mortgage companies must take advantage of it to make the borrowing process simple, fast, and otherwise customer-friendly.

Simply put, lenders need to figure out how to use the Internet to implement a customer-first strategy.

Thanks to a robust economy and low unemployment, more families have more wealth than ever before. But that wealth - combined with income growth and a rise in the population - has led to increased demand for housing and, in turn, higher prices both for homes and monthly rates on rental units.

In many regions, certain segments of the population are finding it harder and harder to find a decent, affordable home. While the homeownership rate in the United States overall has reached a record high of about 67%, the rate for people under 35 years of age has dropped since 1979. And rates for rental units are going through the roof in many areas.

It has been estimated that 1.5 million to 1.7 million new housing units will be needed each year. The number of low-income rental units has been falling by almost half a million yearly. Housing for the elderly also will become a big issue; the 65-and-older population will rise an estimated 16% in the next 10 years.

These 21st-century challenges point to the need for the public and private sectors to work together to strengthen our communities by meeting our housing needs.

We will work to ensure that housing programs are protected and improved. We will redouble our efforts to provide consumers with information and counseling. And we will work with mayors, community leaders, and planners to build and rebuild communities in the smartest possible ways.

Mr. Woodward is chairman of Bank of America Mortgage and the newly installed president of the Mortgage Bankers Association of America.

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