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Tuesday 16th of September 2008
November 19, 2007

Yorkshire launches the paperless mortgage


by Gill Montia
”Yorkshire

Yorkshire Building Society is introducing the paperless mortgage and will be providing its entire mortgage application process online.

To date, online application systems have still involved hard copies because of the problems of proof of identity and the paper-and-ink, or “wet”, signature that is required to show that the borrower agrees to the terms and conditions of the loan.

The Yorkshire has been using a system whereby customers have to download and print out a 15-page application form, sign it and put it in the post with proof of identification.

However, new developments in software mean that instead of providing a “wet” signature customer click an “I accept” box which is a valid declaration that the customer has undertaken the terms and conditions of the mortgage.

The building society will confirm the customer’s identity using Experian, the credit reference agency.

In cases where Experian does not hold sufficient information on the applicant evidence of identification will still have to be posted, although Yorkshire believes that no more than 25% of customers will fall into this category.

Until next year, when an online payment facility will be set up, mortgage arrangement fees that have not been added to the loan will have to be paid by debit card over the telephone.

While other mortgage lenders are expected to follow the Yorkshire’s lead, concerns have been raised that borrowers may not understand the binding nature of clicking the “I accept” box.

In addition, there is a danger that borrowers will not give the same attention to the small print as they would if they were providing a signature.

Amongst other lenders, Nationwide expects to continue to provide a variety of methods for mortgage applications: online, by telephone, or by visiting a branch.

Halifax, the UK’s largest mortgage lender, has confirmed that it is maintaining a “watching brief” when it comes to online applications.

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Story link: Yorkshire launches the paperless mortgage


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