Money from a New Jersey or California bank may soon finance mortgages for Washington area home buyers under the Mount Vernon Mortgage Co.'s "Mortgage Master" plan, which links the firm's computer to capital markets.
Mount Vernon Mortgage, a subsidiary of Mount Vernon Realty Co., is one of 50 real estate brokers in the country offering this service through an arrangement with First Boston Capital Group. First Boston, an investment brokerage company, recently established a new system, Shelternet, that may quietly revolutionize the way the real estate industry does business.
Shelternet gives real estate brokers computer access to mortgage money available through First Boston, thus bypassing the traditional mortgage bankers and S&Ls.
After a loan application of a potential home buyer is entered, the computer tabulates the underwriting and rejects or accepts the loan instantaneously, according to John Maco, director of sales for First Boston.
The real estate brokers each paid $16,000 to obtain the necessary computer and software and will be charged $100 an hour for computer time from First Boston. In return, they keep the origination fees and points, money that usually goes to the lender.
The "revolutionary" aspect of the arrangement, Maco said, is the time-saving for all concerned. Typically, a home loan is completed in about two months. Using this system, the average closing time is between three and three- and-a-half weeks, Maco said. With interest rates changing so rapidly in the last few years, cutting completion time in half could be a real asset for the home buyer, he said.
First Boston has been testing this system in several cities, including Atlanta and Minneapolis, in the past year. The brokerage plans to have a total of 150 real estate brokers participating in Shelternet by April 1984.