The 'Digital Divide'.(MORTECH study on mortgage firms)(Brief Article)(Statistical Data Included)

The annual MORTECH study recently uncovered a growing "digital divide" between firms in the mortgage industry. Increasingly, "haves" are moving ahead with digital mortgage docs while "have nots" continue to rely on paper documentation. And that's not the only technology trend that could have a huge impact on loan servicing.

The MORTECH study found that lenders spent an estimated $2.7 billion on technology in 2001, with the largest 18% of the 360 lenders in the study accounting for two-thirds of those technology expenditures. What this seems to portend is a bifurcation between lenders that are technology savvy and lenders that use traditional loan processing procedures.

The largest servicers have almost universally invested heavily in technology. In fact, MORTECH author Jeff Lebowitz told MSN's sister paper, National Mortgage News, that large lenders are developing "an insurmountable lead" over smaller competitors when it comes to technology investment. But just because most large servicers are among the leaders does not mean that this divide will not affect them.

Increasingly, lenders may find that their business partners are not as technologically adept as they are. Especially for lenders that buy loans originated by smaller lenders, the technology constraints of technology laggards will affect the way they do ...