Creating an entirely electronic mortgage approval process is "progressing quickly but we're not there yet," Alltel's Doug Foster says.

Right now, consumers can find a mortgage, lock in a rate and fill out an application form electronically. Lenders, for their part, have the ability to get "instantaneous information" to make a credit evaluation of the borrower.

Using software models developed by Fannie Mae and Freddie Mac, which buy the bulk of mortgages from lenders, banks and mortgage companies can score the credit application, which will give them an indicator of whether the loan is likely to go through. At that point, some lenders can make a decision to lend the money, Foster said.

The next step is appraising the property electronically. More than 60 percent of the counties in the United States store home sales data on a computer, Foster said. Several companies currently collect this information and are developing programs to compare properties with similar characteristics, resulting in an appraised value for homes they've never seen. He noted, however, that there are still many instances where a human appraisal firm must inspect the house or at least drive by to verify its condition.

In addition to the appraisal, Foster said that most title companies now do their searches electronically and send their reports to the lender via e-mail.

The two main stumbling blocks to completely automated loan processing are accepting digital signatures, which would obviate the need for closing the loan in person, and verifying employment and income, Foster said. Electronic signatures are not widely accepted at this point and employers and banks are reluctant to open up their electronic databases for searches.