E-commerce standards developed for mortgage processing look set to cut the industry's costs by $10 million and boost approval times by at least 40 per cent.
High demand and continued capital gain in the residential property market has forced the industry to extend e-commerce standards to bring settlement agents online to fast track settlements, according to a spokesman for LIXI, the Lending Industry XML Initiative.
LIXI, a nonprofit organisation made up of lending institutions' representatives, has e-readied the process of gaining finance and buying a home by developing Credit Application Language (CAL).
This allows information required for home loans to be standardised and transferred electronically.
Barry Thomas, LIXI director and convenor of the LIXI Vocabulary Working Group, said the settlement phase of property buying has been a bottleneck.
"Settlements can be made faster by automating the flow of information between buyer, broker, lender and agent while making it transparent to all parties," he said.
Prior to CAL, each bank and lender used its own unique, non-compatible systems.
This month, LIXI will launch CAL 1.3, extending the e-commerce standards to include solicitors and settlement agents.
Already CAL has been adopted by more than 22 LIXI members and a further 30 associates, including Commonwealth Bank of Australia, ING Bank, Westpac, ANZ, Adelaide Bank, Perpetual and Allette Systems.
Thomas said that while it was difficult to put an overall price tag on the project, it was important to note that staff provided by members of LIXI carried out work on the project. "There's no cost for the project in the normal sense," he said.
Input from lenders, solicitors and settlement agents included Gardens National Mortgage Services and Russell Kennedy Solicitors.
With CAL specifically designed for the Australian lending industry, to ensure that it adequately met with its standards and needs, Thomas said "it’s a wonderful thing that the industry is willing to create something for the good of all."