Advocates for eliminating paper-intensive commercial loan closings and migrating to eMortgages believe that all parties involved will benefit from the changes - lenders, borrowers, investors and mortgage-industry service providers. Improvements in operational efficiencies are being touted as the main drivers, meaning lower costs, more liquidity and higher profitability

Changing an entire industry is never easy. Especially when you are trying to convince lenders the deal is legal even if they haven't touched the physical promissory note and mortgage or checked the ink on both documents to see if they are original documents.

But even greater than overcoming the industry's hesitancy about not being able to rely on physical documents they can lock away in a filing cabinet, is the reluctance companies have about changing underlying business processes. And moving to eMortgages would create a need to change because the paperless concept encompasses a variety of activities such as:

• Assembling loan documents

• Obtaining the borrower's consent

• Recording

• Post-closing storage

• Sale of loans

According to James Cooke, an attorney for Ballard Spahr Andrews & Ingersoll, and the co-chair of MISMO's Commercial eMortgage Workgroup, there are several key components to an eMortgage that all must work in tandem.

• ESignatures -

  The legal acceptance of alternatives to the 'wet ink' signature.

• ERecording -

  Incorporating electronic records within the existing paper system in place for the official public records at state and local jurisdictions.

• eVaulting and eRegistry -

  Establishing a single nationwide eRegistry as a method for registering the location and holder of the single authoritative copy of the promissory note, which is the most important document besides the recorded mortgage in a commercial loan.

• ESecurity -

  Sufficient technology to prevent tampering or unauthorized changes to executed documents.