Mortgage processing in Canada will soon take the electronic form with the Canadian Bar Association’s deal with service provider Emergis. Ontario and British Columbia will be first to deploy.
The Canadian Bar Association has entered into a preferred supplier agreement with Emergis to make the mortgage application process a lot less painstaking.
The service, called Assyst Real Estate, electronically links lenders and lawyers. Once the lender approves a mortgage loan, instructions are sent to the lawyer or notary (depending on the province) on what must be done to close the mortgage. This is a fairly long process involving multiple forms to be signed by the client, which are typically sent back and forth several times.
Using the electronic service, the lender sends a file to Emergis as soon as the mortgage is approved, and that information is sent through Emergis to the lawyer.
“We present a summary of the mortgage instructions that contains all the financial data,” said Pierre Bisson, vice-president of Assyst Real Estate with Emergis Inc. The lawyer receives the information on the Web through a secure portal, and whenever a status or an event is confirmed, the lender is informed electronically.
“We eliminate the paper between the lawyer and the lender, so when the lawyer receives the information electronically, he can start working on the file,” said Bisson.
The banks want a seamless way of providing instructions and receiving reports when they’re advancing mortgage money to clients, said John Hoyles, CEO of the Canadian Bar Association.
“The difficulty for them is that there are many different report styles,” he said. “With this kind of program, it will all be the same, [and] it can all be done online.”
After selecting Emergis in an RFP process, the CBA negotiated an arrangement to provide this service to its members at a reduced cost. However, this does not mean every lawyer that practices real estate law is required to use the service – it’s up to them.
Lawyers tend to be quite conservative, said Hoyles, and some people embrace new approaches more than others. “But the reality is, if you’ve got a high-volume real estate practice it would be helpful,” he said.
The manual method involves going to the bank with a requisition letter for the funds. “If you look at the real estate fees charged by lawyers, they’ve virtually been unchanged for 20 years,” he said.
“If you can lessen the steps in the process and your cost to do the transaction, then it makes business sense to have something that’s as simple as possible.”
The CBA provides a link on its Web site to Emergis, and will be working with the vendor to provide seminars for members as it rolls out the service in each province.
While the process is paperless between the lawyer and the lender, the purchaser still needs to sign the documents. Lawyers, however, use a digital signature through the use of a certification authority.
Emergis has operated in Quebec for the past five years and some 80 per cent of notaries in the province use the service, according to Emergis.
The vendor has an agreement in place with the Royal Bank of Canada and Desjardins Bank in Quebec. It recently signed an agreement with Laurentian Bank, and the service should be operational this fall in Quebec.
“The agreement that we have with the Canadian Bar Association enables us to have better coverage with the lawyers because the CBA represents all the lawyers across Canada,” said Bisson.
Emergis is currently rolling out the service in B.C. and Ontario, while the Western provinces are expected to be onboard by the end of this year and the Maritimes in 2008.
In some cases the mortgage process involves 16 to 20 different forms, and those forms can be quite different from one province to another, so Emergis is integrating the service with the provinces while providing a common interface for lawyers and lenders.
It’s also in discussions with other financial institutions to expand the service.