Navy Takes App on Test Cruise

Think about the scope of systems needed to run the worlds largest credit union. Now add the complexity created by the fact that many of that institutions 2.2 million members can be away from home for months at a time. Its a combination that demands all manner of electronic banking, including electronic mortgages.

So it shouldnt come as a surprise that the Navy Federal Credit Union has been piloting an electronic-mortgage-closing application created by Fannie Mae eBusiness. The application, which lets members not only apply for loans but also close them online using electronic signatures, saves members hundreds of dollars in the cost of applying for a mortgage, estimated Johnna Cooper, associate vice president at the Navy FCU, in Vienna, Va.

The Navy FCU, said Cooper, had been looking for an online mortgage application it could deploy since June 2000, when President Clinton signed the so-called e-Sign bill making digital signatures legal. Then, in November 2000, Fannie Mae eBusiness asked the Navy FCU to take part in a pilot test of its eMortgage program.

Making the process digital would allow mortgage-lending institutions—from which Fannie Mae purchases loans—to get out from under the mountain of paperwork that typically accompanies a mortgage closing. Often, some 20 documents must be signed. But in an electronic closing, there is a single long document that can be signed by a single "click signature."

"When we go to the closing table, the attorney shows the member the document, and the borrower clicks on it. The document is signed and given a date and time stamp," said Cooper. "This saves $200 to $300 on each loan. We will give back most of that to the member."

Another application created by Fannie Mae eBusiness and already in production at the Navy FCU is Electronic Recording. When a mortgage loan is paid off, the lien on the mortgage is electronically released by the county recorder. Thus far, 4,500 liens have been released electronically in Fairfax County, Va., alone, said Cooper.

The eMortgage applications are among some 40 Web-based systems built by Fannie Mae eBusiness since the unit was created in June 2000 to accelerate the delivery of Web-based applications to Fannie Mae customers, said the units president, Michael Williams, in Washington. Williams has 500 developers working on those applications, many of which are successors to earlier-generation client/server applications. Williams estimated that, taken together, the applications can wring up to $1,500 from the cost of a mortgage.

Members of the Navy FCU that are at sea already are doing much of their banking electronically from anywhere in the world. Although the Fannie Mae eBusiness mortgage-closing application is not yet available on Navy ships, it soon will be, said the Navy FCUs Cooper. When it is, it will go a long way toward making Navy personnel feel at home anywhere in the world.