Mortgages Are Bad for the Environment. Here’s What Can You Do About It.

Just how much paperwork is consumed annually by Americans buying homes may come as a bit of a surprise.

It’s no secret that the mortgage process is paper intensive. But exactly how much paperwork Americans buying homes consume annually may come as a surprise.

A report from the mortgage education website FreeandClear revealed that about 2.2 billion sheets of paper are used each year in this country for mortgages. That translates into 264,000 trees felled to print mortgage documentation. Beyond wood usage, “paper production involves considerable energy and water consumption, and generates significant greenhouse gas emissions and waste,” noted the report.

The company’s report is based in part on data from a 2016 Federal Reserve Bulletin, which said an average of 7.8 million mortgages are processed each year in this country. When that figure is multiplied by the approximately 280 sheets of paper FreeandClear said are used in an individual mortgage, you arrive at 2.2 billion.

To further quantify the environmental impact of this paper usage, FreeandClear tapped Environmental Paper Network, a nonprofit focused on issues surrounding paper production and consumption.

EPN used its “paper calculator” to determine the number of trees required for a year’s worth of mortgage paperwork. Their estimate of 264,000 is based on a calculation involving the total reams of paper required for 2.2 billion sheets of paper and the specific tonnage of trees necessary to produce those reams.

So what can be done about the paper intensive mortgage process?

Florida-based Digital Risk LLC is developing products to allow more of the process to be conducted via digital technology. Over the next several years, there will likely be a shift to greater usage of paper-free technology like e-signatures and the ability to review documents online or on your phone, said Digital Risk vice president Leo Loomie.

“A lot of strides have been made within the last year to move away from the historically paper intensive process,” said Loomie. “The technology is already there. It really just comes down to adoption.”

Here are some actions you can take to help reduce the amount of paper used when buying a home.

Do Your Research 

Though it only represents a small fraction of the process, many mortgage lenders have already switched to online loan applications.

“These lenders are beginning to make the transition to a paperless system,” said Tim Milauskas, a loan originator at First Home Mortgage in Maryland. “In many cases, borrowers can now create a secure online portal and upload their documentation directly to the lender rather than print out documents and hand-deliver them.”

Capstone Direct Mortgage Financing, in Thousand Oaks, California, is one such example. Over the past several years, the company has made a concerted effort to use less paper.

“We offer the ability to take your application online, save a pre-approval online and upload all of your paperwork to our (electronic document) system,” said Capstone founder Mike Wise. “We are trying to minimize any paper we use in our office and what we get from the borrower.”

Also on the horizon, said Milauskas, are automated systems that allow lenders to go directly to third parties to obtain financial information required from the borrower. One example includes lenders being able to access an applicant’s bank statements directly from the bank, rather than the applicant providing copies. (Here’s what you need to get a home loan fully approved, including your credit score. You can see where your credit stands for free on Credit.com.)

Ask Questions When Shopping Around

As you’re hunting around for the best mortgage rate and for the lender that best fits your needs, you can also obtain information about how technologically advanced a lender may be.

“Say to them, ‘I want this to be a streamlined, paperless process, do you offer that?’ ” said Loomie. “Ask them, ‘If it’s not entirely paperless, is it mostly paperless?’ ”

Many lenders and brokers allow loan applications to be completed electronically, but the vast majority of the paperwork associated with a mortgage comes at the closing, where wet signatures are still the standard. (Here’s how to plan for closing costs.)

Don’t Ignore Surveys 

Surveys represent an opportunity to weigh in on the mortgage process and effect change.

“A lot of folks look at surveys and say it’s not worth my time,” said Loomie. “I can say unequivocally that’s not the case, particularly in the mortgage industry. The surveys are very influential. Both large and small financial institutions put a lot of weight on the customer experience, they read your responses and deeply analyze and track customer feedback.”

In other words, use the survey to tell the mortgage industry you’d like it to use less paper.

“You can say, ‘If I knew how much paper was going to be used, I would have gone to a different lender,’” said Loomie. “And that sort of thing can be done throughout the process. Ask questions all along the way. Say, ‘Hey, why did you make me fax this when I know there are institutions that allow me to directly integrate this information online?’ The customer feedback will drive the adoption. They known being green is very important to customers.”

Lobby for Change

Customer service surveys are not the only place to voice your opinion. Reach out to officials at all levels — brokers, banks, regulators, elected officials and more, said Kim Porter of Environmental Paper Network.

“One of the positives about FreeandClear making this known is a greater awareness among people who want to see less waste,” Porter said. “People can start talking to companies and elected officials, and they can use their dollars wisely, choosing to work with companies who are advocating for less wasteful practices.”

Image: Weekend Images Inc. 

The post Mortgages Are Bad for the Environment. Here’s What Can You Do About It. appeared first on Credit.com.

The Back-to-School Item That’s Becoming Less Popular

back_to_school_gadgets

Tablet sales have been shrinking for some time, but there’s fresh evidence that the market for the devices is in distress: Shoppers spending big on back-to-school gadgets expect to buy more external hard drives than new tablets, according to a new survey. And even while spending on back-to-school tech is expected to surge, spending on tablets for school is falling.

Back-to-school is the second-most important season for gadget sellers behind the end-of-year holidays. The survey, by the Consumer Technology Association, found that consumers expect to spend $18.5 billion this year on calculators, laptops, and other gadgets, outpacing last year by 6.2%.

Practicality seems to be the driving factor behind the most-desired gadgets, with 71% of consumers saying they will buy portable memory, and 55% saying they will buy a calculator.

Overall, the optimism bodes well for tech makers and sellers, the CTA says.

“Early back-to-school promotions are building interest and momentum for the second-largest shopping event of the year,” said Steve Koenig, senior director of market research for CTA, in a prepared statement. “Deals on the tech items for back-to-school including 2-1 laptops, Bluetooth speakers, headphones, tablets and more are creating excitement among consumers. This consumer enthusiasm also bodes well for tech sales across the second half of the year.”

On the other hand, while 44% say they’ll buy a new laptop, only half that number, 22%, will buy a tablet.

Here’s the CTA’s list of top 10 gadgets that back-to-school shoppers expect to buy.

  1. Portable memory (71%)
  2. Basic calculator (55%)
  3. Headphones (52%)
  4. Scientific/graphing calculator (51%)
  5. Carrying or protective case (48%)
  6. Laptop (44%)
  7. Software for computer (39%)
  8. External hard drive (23%)
  9. Tablet (22%)
  10. Product subscription service (22%)

The poor tablet results square with sales figures from market researcher IDC, which has reported tablets falling out of favor for more than a year. In its latest research, IDC said that tablet shipments fell 12% compared to the same quarter last year. Only tablets that mimic laptops — sometimes called detachables — saw growth, but those still represent a small portion of the tablet market.

“The market has spoken as consumers and enterprises seek more productive form factors and operating systems — it’s the reason we’re seeing continued growth in detachables,” Jitesh Ubrani, senior research analyst with IDC, said in a report.

In the end, tablets have struggled to find a place as a third gadget in consumers’ lives, alongside personal computers and mobile phones. In addition, larger phones that can do almost everything tablets can have squeezed out tablets. Also, when tablet sales first started to slump back in 2015, Apple CEO Tim Cook explained that upgrade cycles for tablets had been longer than expected, and definitely longer than cell phones. Consumers who bought one tablet didn’t see the need to upgrade.

Still overall, both Synchrony Financial and the Consumer Technology Association predict brisk tech sales this August. Synchrony, which predicted an overall sales increase of 2.7%-3.7%, said spending on tech will rival spending on new clothes.

Remember, if you’re looking to buy new gadgets this school year, it’s important to stay on budget. High credit card balances and other debts can damage your credit. To see how your debts and spending habits are affecting your finances, you can view your free credit report summary, updated each month, on Credit.com. And, if you’ve already overspent, you can read this guide for tips on getting out of debt.

Image: Massimo Merlini

The post The Back-to-School Item That’s Becoming Less Popular appeared first on Credit.com.