Wells Fargo & Co., the largest home lender, has endorsed electronic mortgages on a grander scale.
On Monday the San Francisco company began requiring its correspondents to use the MERS system to electronically register all their loans headed for sale to Wells.
The lender has not mandated that those loans be electronic notes, and it would not specify when it would be accepting such notes from correspondents on a large scale. But its said automating is the direction it is moving in and that the MERS mandate would make that transition much easier.
"Providing e-lending solutions is an effective way to gain efficiencies, cut costs, effectively manage compliance and enhance the customer experience," said Robin Hannah, the vice president of correspondent e-business at Wells Fargo's home mortgage unit. The company "is working on various e-lending capabilities to insure we are positioned appropriately when adoption becomes more prominent in the industry," she said.
Greg Smith, a vice president and the general manager at Xerox Corp.'s mortgage services unit in Alpharetta, Ga., called the mandate for Wells' correspondents to use MERS a big step.
"Because the mortgage industry continues to consolidate and the larger banks are carrying a larger share, this move by Wells will drive overall standardization," he said. "This is a strong signal from a large player that standardization will happen."
Merscorp, of Reston, Va., operates the MERS system.
Wells' correspondents also have an incentive to go further than using MERS.
Though Wells "doesn't foresee mandating the use of e-notes, adoption may be encouraged by including benefits we realize into our customer's pricing," Hannah said.
Along similar lines, Wells has approved yet another technology vendor, Data-Vision Inc. of Mishawaka, Ind., to generate electronic disclosures.
"Adoption of e-delivery and e-signatures is a great first step down the path to fully electronic mortgages," Hannah said.
The approval means correspondents that Wells has authorized to deliver electronic disclosures can now do so using Data-Vision's RemoteDocs Secure Electronic Delivery service. All told, correspondents can now choose from 14 different vendors. "We have a very diverse customer base that needs multiple options to meet their business needs," Hannah said.
To join the roster, a vendor must pass a rigorous inspection.
"Wells Fargo audits every vendor's technology and processes prior to granting authorization," Hannah said. "This audit is performed by a team of e-business experts and focuses on compliance and risk management. Based on the results of that audit, vendors may be asked to make changes and go through a second audit before they are approved."