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The demise of South Florida-based Mortgage.com late last year has left a yawning gap in a partnership that generated what probably was the nation’s first paperless mortgage. An alliance of technology, mortgage and title insurance companies, with the help of the Broward County Records Division, completed an online mortgage closing last summer in Weston, near Fort Lauderdale. It was the first of two such deals the group has handled since, with Mortgage.com as the lender. But Mortgage.com closed its doors in late October and the paperless-mortgage group has yet to sign another lender. That could change by March, said Norwood Gay, general counsel of Attorneys’ Title Fund in Orlando, one of the state’s largest title insurers. The Fund, as it’s known, is a member of the alliance that also includes eOriginal Inc., a Baltimore company that makes software for electronic documents; NewVision Systems Corp. of Stamford, Conn., a software vendor that helped retool Broward’s recording system; Broward title agency Enterprise Title; and mortgage servicer Irwin Mortgage Corp. of Indianapolis. Also involved is Fannie Mae, one of the two federally chartered corporations that buys mortgage loans from lenders and sells them to investors, along with Freddie Mac. The Florida group has a preliminary commitment from several large national lenders, Gay said, that could become more formal in February or March. He declined to name the companies. Susan Penn, communications director for eOriginal, said the alliance is talking to the top lenders nationwide but that no contracts have been signed. The alliance initially focused on Florida because the state was one of the first to adopt a law addressing the issue. Florida’s Uniform Electronic Transaction Act took effect July 1. The Florida group’s first paperless deal was followed closely by a mortgage transaction in Utah done through another alliance. The federal Electronic Signatures in Global and National Commerce Act became effective nationwide in October, allowing existing players to expand the search for more partners. EOriginal, in fact, announced a five-year agreement Monday with Houston-based Stewart Title Co. for nationwide electronic mortgage closing services. Though the Texas company is not formally part of the Florida alliance, “we will probably become involved,” said Darren Ross, director of electronic commerce for Stewart Title. The agreement with Stewart Title points to the growing recognition that electronic mortgage closings are the way business is headed, said Larry Lewis, Mortgage.com’s former senior vice president for e-mortgages who handled the company’s participation in the alliance. Still, “there hasn’t been an industry consensus” about the specifics of the electronic process, said Lewis, who now is president of HomeSource Capital Mortgage Co. in Jupiter. That’s likely one reason why the Florida alliance has yet to sign another lender, he added. Electronic mortgages are “considered the Holy Grail, but no one is sure how to get it,” Lewis said. Fannie Mae, which purchased the Weston mortgage loan; and Freddie Mac, which purchased an electronic loan in Utah, both have issued preliminary guidelines for electronic mortgages. Formal versions of those regulations are pending, said Gay, who is assisting in the review of Freddie Mac’s guidelines for the American Land Title Association in Washington, D.C. “That has to be in place for the system to work nationwide,” he said.

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