A local mortgage company, in cooperation with a Minneapolis software firm, has developed a mortgage application process that is virtually paperless and can be completed in little more than the time than it takes to make a pot of coffee.

Franklin Park-based Atlantis Financial Services Inc., which describes itself as a "mortgage and technology company," is behind ASAPmortgageonline.com, a Web site that can serve up a mortgage approval in 10 minutes or less.

Chief Executive Officer Dave Nearhoof said that the idea for the company arose from conversations he had with other mortgage banking executives two years ago. The conversations focused on a single question: "What would a paperless mortgage process look like?"

Imagining themselves 5 years into the future, they began envisioning the details of a paperless process, "designing it, developing it, shooting holes in it and redesigning it."

Conceptually working through a process for managing information is one thing. Engineering that process into software is another. That task fell to Edina, Minn.-based Dexma, a provider of software for banks and credit unions. By October, Dexma had developed a paperless mortgage package that gave Mr. Nearhoof and his friends the confidence to set up their own mortgage lending company based on the process. This meant not only using Dexma's software, but telling the vendors that they dealt with, from appraisers to title companies, that "if you want to work with us, you've got to adapt to us" in being willing to use a paperless process, Mr. Nearhoof said.

The company's Web site went live in January. A prospective home buyer visiting the site begins the mortgage application process by completing a questionnaire, just as she might in a lender's office on paper, providing information such as income, debts and assets. The software also asks what type of property is being purchased and for what price. Then it generates a list of mortgage products that might be suitable for the applicant -- a 30-year fixed loan, a 30-year adjustable rate loan, a 15-year fixed loan, etc.

After one of those is selected, the system then uses the magic of the Internet to connect with computerized systems in the offices of, for example, the U.S. Department of Housing and Urban Development, which will check the application for compliance with underwriting standards for HUD loans.

If the underwriter's system judges everything to be in order, it sends an approval notice back to Atlantis, and a notification message pops up in the applicant's Web browser, complete with an approval letter that she can print out -- or better yet, transmit electronically to her title company to start the closing process.

However, that degree of completion only happens about 50 percent of the time, Mr. Nearhoof said. Half of the mortgage applications received (they're coming in at the rate of about 10 per day), require some sort of human interaction from a customer service representative. Sometimes they need more information than the borrower has provided, or the borrower's credit doesn't meet the underwriting standards for the type of loan she is seeking.

But while the customer services representatives may help an applicant with completing the application or explain a nonapproval of an application, the system does not allow them to actually enter information for the customer.

"Whatever information is on that application, it came directly from you, the consumer," Mr. Nearhoof said. This "takes away a lot of temptation" for Atlantis employees to massage an application in order to gain mortgage approval "because it can't be done."

Mr. Nearhoof acknowledges that not everyone will be totally comfortable with a process that requires so little human interaction.

"There is a little bit of a tradeoff," he said. But the Web-based computerized system "doesn't take off, doesn't miss a day, doesn't have a bad day."

The ability to apply, and be approved for a mortgage online, has been a long time coming. Mortgage processing involves a lot of parties other than the lender: an appraiser, a title company, a mortgage insurer, a mortgage buyer, and more. Having all of those parties work together smoothly online has required voluntary cooperation among them as well as new legislation.

In 1999, the National Conference of Commissioner on Uniform State Laws drafted a piece of model legislation that states could adopt to give electronic signatures the same validity as "wet" signatures rendered in ink on paper.

That same year, the Mortgage Bankers Association, a Washington, D.C.-based trade group, established the Mortgage Industry Standards Maintenance Organization to guide industry members in developing voluntary standards for electronic commerce. In 2000, Congress made state legislation unnecessary by passing the Electronic Signatures in Global and National Commerce Act.

"By having everyone speak the same language in technological terms, everyone benefits," said Harry Gardner, the association's vice president for industry technology.

"It absolutely is a business imperative" that online mortgage processing will become the industry norm, Mr. Gardner said.

"Within 5 or 10 years all the supporting documents will be electronic and we really will have moved away from paper processing."

Mr. Gardner dismissed the idea that a paperless mortgage process would diminish or eliminate the human element.

"What you are doing is leveraging the ability to manage the documents electronically," he said, "You now can communicate even better with your borrower -- for example, by sending documents in advance so they're not surprised by a 2-inch pile of paper."