Magazine article Mortgage Banking

The Ticket to eMortgages

Magazine article Mortgage Banking

The Ticket to eMortgages

Article excerpt

The mortgage banking and healthcare industries have much in common. First, the landscape is mostly paper. Second, both industries are having difficulty fully adopting and implementing electronic records.

In both industries, implementing the secure exchange of documents and data between multiple parties has been one hurdle to attaining 100 percent electronic records. The fidelity of the data and the electronic document must be maintained; that is, there cannot be any alteration or loss of integrity. And both industries have the requirement for electronic signatures on many of the documents and the need for long-term retention.

Meanwhile, the airline industry, in warp speed, has flown to electronic tickets (e-tickets). You might ask how does an e-ticket compare with an electronic document in a medical record or in a loan file?

The e-ticket is simply an electronic record of the traveler's airline reservation, just as the paper ticket was. A ticket contains information such as the time, date and place of the flight, airport, seat assignment, payment details and the travel class. Paper tickets and electronic tickets contain the same information, just in different forms.

An e-ticket is an electronic record, just as a loan file is an electronic record. So why is adoption of electronic mortgages (eMort-gages) not taking flight? Is there a lesson to be learned from the airline industry and e-tickets?

It's not that the airlines are a newer industry and therefore able to utilize technology more efficiently. The first airline tickets date back to the 1920s. Each airline used a different ticket with varying information. and there was no consistency in form. The need for standardization, as airline transit grew and spanned the world, was recognized by the airline industry. In 1930, the International Air Transport Association (IATA) developed the first standard for the hand-written ticket. The standard was used by industry into the early 1970s.

With an increasing use of computers in the 1980s, IATA developed a standard electronic form that could be used across all airlines that included a magnetic stripe on the back. The magnetic stripe stored all of the travel information electronically on the ticket itself and enabled its use as the boarding pass.

There is some dispute as to whether Southwest Airlines or ValueJet was the first to offer electronic tickets in the early to mid-1990s, but by the summer of 1999. the industry reported that half of all tickets sold were e-tickets. In 2008, IATA bid farewell to the paper ticket as the industry had converted to 100 percent electronic ticketing.

One critical aspect of an e-ticket is that it contains an official and unique ticket number. This standardized number includes the airline's three-digit code, a 10-digit record number and sometimes a check digit.

A check digit is a single number computed from the other numbers in the ticket number. Check digits are generally used to capture human transcription errors. It provides a mechanism to electronically recompute the number entered and validate mistyping of the number. The ticket number links an electronic record to the boarding pass, to the payment information, to the itinerary and to other passenger information such as a frequent-flyer account with the airline. …

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