Academic journal article ABA Banking Journal

VANs vs. the Internet: May the Best Man Win

Academic journal article ABA Banking Journal

VANs vs. the Internet: May the Best Man Win

Article excerpt

In the mortgage banking industry, speed is more than good, speed is an absolute requirement

In the quest to improve efficiencies, mortgage bankers continue to implement technology that can speed-up the historically cumbersome and lengthy mortgage process. Forget faxes, telephone calls, and the U.S. Postal Service.

Instead, mortgage bankers increasingly rely on data communications networks to send and receive data to credit bureaus, mortgage insurance companies, Fannie Mae and Freddie Mac, and to consumers themselves.

This ability to electronically transmit data using a data communications network is critical to streamlining the mortgage process.

There are two vehicles for transmitting mortgage data: Value Added Networks (VANs) and the Internet. Each offers its advantages and each has its pitfalls. In a nutshell, VANs are expensive yet secure while the Internet is cheap but remains a security concern--whether the problems are real or perceived--for many lenders.

Your own private Internet

Think of a VAN as a private Internet. Unlike the public Internet, which is available to anyone with a computer, only subscribers have access to a VAN. For years, the mortgage banking industry has been using VANs to transmit information between mortgage lenders and their trading partners. The transmissions include data on originators, title companies, credit bureaus, appraisers and servicers.

Using a VAN, trading partners can transmit over the data network everything from e-mails to the loans themselves. …

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