E-Closing(sm), Express Close, RealEC, Challenge Traditional Practices

New entries into the world of E-Commerce are challenging the way that the Real Estate industry has conducted business for years. President Clinton's recent State of the Union address urged the country to work toward bridging the" Digital Divide." While many of the internet based efforts to streamline our industry may amount to only a " flash in the pan," some will inevitably take hold and forever change how we do business.

E-Closing(sm) is one of the new ".com" businesses that may have a tremendous impact on the residential closing. E-Closing(sm), The First Internet Title Company(tm), offers three core services:

• 1. Internet-Assisted Remote Document Execution, ultimately using a national chain of quick print shops that allow 24/7 execution in hard-copy of home equity, automobile and certain insurance and investment documentation;
• 2. Brand-based/Affinity Program/Licensed use of our National Title & Closing Network, which uses three different platforms depending on customer size, two open and one proprietary, to serve large independent title companies, smaller underwriters, bar-related entities and lenders with streamlined in-sourced processes along with all traditional mortgage lenders, with a focus on internet lenders, second tier national accounts (including sub-prime) and large regional lenders;
• 3. Through strategic alliances with leading technology providers outside of the title industry, we will have available in test markets, the first self service closing through our subsidiary, Self-Closing(sm). This secure, virtually foolproof and most of all convenient method is currently under patent application and will revolutionize the title industry.

According to it's principals, E-Closing is creating a market within the financial services industry that keys in on the borrowers' ability to better communicate with the lenders on all levels. E-Closing believes that better informing the consumer will reduce the costs of every aspect of the real estate transaction. For Lenders that want to serve customers more efficiently and cost effectively, E- Closing strategically facilitates the streamlining and fat-cutting to save money.

Another company intends to offer a risk based alternative to title insurance. In addition to more traditional services such as credit reporting and property valuations, ExpressClose.com offers Lenders an alternative to the traditional title insurance policy called the Lenders Master Policy or "LMP."

The LMP is a new insurance product specifically designed to simplify and shorten the time required to close Refinance, Second Mortgage and Equity Loans. The LMP provides casualty insurance coverage indemnifying the Lender against casualty "Loss" sustained by the Lender caused or occasioned by an act or omission of the Borrower, whether fraudulent or not, or a servicer, including a failure to disclose a lien or mortgage position secured by Borrower's property causing a loss hereunder, whether such failure to disclose is intentional or unintentional and whether such defect is known or unknown. Through a Borrower Affidavit, approved Credit Report and a copy of Deed for Ownership Verification and Legal Description to subject property, the lien position is insured to be as determined at the time of loan underwriting.

When using the LMP, the lender's loan underwriting procedure remains unchanged (within the scope of its company policies) with four exceptions. The LMP is available for equity loans up to $100,000 and re-finance loans up to $500,000.

• 1. A "Lien Affidavit" must be signed by the borrower(s) and notarized. The Lien Affidavit is a sworn statement by the borrower attesting to all liens and encumbrances affecting the security property. The Lien Affidavit must include all known liens, encumbrances and liens listed on the credit bureau report.
• 2. The credit bureau report must be carefully reviewed for all mortgages, judgements and equity loans. All identified liens, mortgages and judgements must be listed on the Lien Affidavit and taken into consideration as part of your lien priority assessment.
• 3. Ownership of the property must be verified through the use of a recent tax receipt, warranty deed, on-line tax service or other means of ownership verification or vendor service. Legal descriptions are also obtained through the process. A copy of such proof of ownership must be maintained in your customer file.

ExpressClose will also attempt to deliver closing services through "a nationwide network of qualified notaries." Located in every major metropolitan area of the United States, ExpressClose.com's network of specialized notaries are highly trained in the closing process as well as completely conscious of the necessity to arrange the signing of documents quickly and effectively. When an order is placed with ExpressClose.com, a qualified notary within the geographic area of the borrower is immediately contacted to help assist with the closing. Typically, a notary is assigned to each particular order within 30 minutes of the request being placed with ExpressClose.com. A notary assigned to an order will coordinate the signing of closing documents with the borrower. Document signings take place at a time and location convenient to the borrower. The principals claim that, in general, when used in conjunction with all of ExpressClose.com's services, lenders can close on an equity loan within 1-2 days of having taken the original application.

A third "Dot.Com" business is attempting to provide a single "portal" or resource for a variety of services. RealEC, Inc. is a Delaware corporation formed in October 1998. RealEC, Inc. is a technology company that owns and operates the RealEC exchange. The company is owned by Santa Ana, California-based Micro General Coproration (OTC:MGEN) and Houston-based Stewart Title Company. In forming RealEC, Inc., the owners made significant technology contributions including their formerly proprietary systems, along with new network, software and hardware resources. Geared primarily toward Lenders, RealEC is a secure business-to-business electronic commerce exchange that allows lenders to order, status and receive real estate settlement services from a growing number of authorized Service Providers. When you use RealEC, you get real time answers through every step of the real estate settlement process 24 hours a day, seven days a week. From community banks to global lenders, to independent title companies to national underwriters, RealEC claims to be a scalable service that adapts to your needs however large or complex they may be.

These three new companies serve as an example of how quickly our business can and will change. These new businesses will both assist us and compete with us for a growing market using the internet as it's chosen place of commerce. The lesson to be learned is that those who fail to bridge the "Digital Divide" will be lost in the chasm that it leaves behind.