ClosingGuard, a year-old online mortgage closing and document company, has tapped a Countrywide Credit Industries Inc. executive to bring the companys technology to the market.
Greg Jacobson has joined the Kew Gardens, N.Y., start-up after two years as chief operating officer of Countrywide Warehouse Lending, a business he started and ran for Countrywide Home Loans. Mr. Jacobson, 37, founded and ran two mortgage companies before joining Countrywide of Calabasas, Calif.
In his new role, he will help market the ClosingGuard Internet platform, which attempts to automate mortgage closings by connecting all the players. ClosingGuard officials say the platform will give anyone involved in the process lenders, title agents, attorneys, the borrower, and even the seller of the property access to an Internet file to check the status of the closing.
The ClosingGuard platform is designed to open up a real estate transaction so that all the parties involved can see whats going on, Mr. Jacobson said. That way, everybody knows where everybody stands.
For example, documents that are now transferred by fax or overnight delivery services can be shared simply by telling the parties to go online and look at them, he said.
Company officials say the platform automates a function that is currently done manually.
We think thats what the Internet is all about: equal access for all, Mr. Jacobson said. No matter who you are, no matter what kind of company you are, you can get access to this thing.
The platform also keeps records of all the transactions. Once the mortgage companies and the title agents put in the information, it can be exported and sent off to other data bases, Mr. Jacobson said. That way, records that banks and lenders are required by law to save can be sent by ClosingGuard on a CD-ROM.
The data collection can also help detect fraud by checking to make sure the property hasnt been flipped or that the borrowers Social Security number is valid, he said.
The company plans initially to target lenders and title agents, who Mr. Jacobson said are the essential players in closings.
Company officials said they have not yet determined exactly how or to whom fees will be charged but are confident that lenders and title agents will save money and would be willing to pay per-transaction fees.
ClosingGuard officials also said they predict and hope that consumers will demand access to closings. Today many borrowers are left in the dark until closing day, the officials said.
Why would you go down to the title company not knowing what youre going to see? asked Mr. Jacobson. Why would you want to try to read a 25-page fax when you can go online?
But for now the company says it will focus on lenders and title agents. This month ClosingGuard started a pilot program in which Lenders Services, a Pittsburgh collateral assessment company, is to use the platform for several hundred closings in the next three months.
ClosingGuard is funded by venture capital firms, though officials declined to disclose the backers. Mr. Jacobson said the company is bringing in revenue and has targeted a date for profitability, but he refused to reveal it.
Coming a little late to the Internet party may be an advantage for ClosingGuard, Mr. Jacobson said, because the company can learn from the mistakes of the first movers in the technology sector, many of whom are hurting badly or out of business all together.
Mr. Jacobson said he would not want to be an originator on the Internet because it is very difficult to get someone to pick a lender off a list.
I wouldnt want to compete against Countrywide in that environment. But we like the business of being a business-to-business service provider.