The closing process is rapidly changing. For closing agents, adopting eSign and eNotary technology is becoming more common. You may be currently using a hybrid form of closing where some signatures are gathered via pen and paper and others are digitally signed.
With the approval of remote online notarization gaining velocity across the United States, it won’t be long until all closings are conducted on remote devices with not a piece of paper in sight. But how do you know when it’s the right time to begin implementing this technology in your current process? How do you evaluate the tools that are offered?
Listen to my interview with Danielle Kaiser of NATIC now to learn more about what you should consider before making the move to digital closings.
The Benefits of Introducing More Technology into your Title Operations
Making a change to integrate eClosing Solutions in your process now, however small, has several immediate positives:
- It saves time.
- It improves quality control.
- It creates an opportunity for better consumer education.
- The closing experience is improved for all parties involved.
Save Time and Improve Quality Control
Danielle highlights how this new process can improve the customer experience and helps with quality control for title agents and lenders, “I think it can provide the signer with overall better experience. You don’t have that overwhelming stack of a hundred papers that you’re looking at, and for the title companies and lenders involved it can help cut down on mistakes. You’re not going to miss signing a page. You’re not going to miss signing an initial. The system, the platform that you’re using isn’t going to let you finish everything until all the dates and initials are complete.”
This is a huge time saver. By working with a software that tracks the required signatures and initials, you or someone else on your team will never have to waste time going back to a party to get a missed signature. This makes every closing you do more efficient.
Create Better Consumer Education Before the Closing
Many consumers don’t understand all of the documents they are signing. By using a platform that will allow them to review and sign documents before the closing that doesn’t require notarization, agents are creating opportunities to remove the stress and pressure that can come at the closing table.
Some people may feel uneasy asking questions they think they should know the answer to when sitting at a large table surrounded by real estate professionals. Signing some papers at home and getting questions answered one-on-one over the phone or over email with the title agent is far less intimidating, especially for a first-time buyer.
A Better Closing Experience for Everyone
Time is a precious commodity for everyone. Because some questions and documents will be signed beforehand, the day of the closing will be less painful and time-consuming for everyone when digital solutions are applied.
For lenders, the process of underwriting and originating loans is quicker. It’s easier to transfer consumer data collected to and from title agents when creating required closing documents.
Working in a comprehensive eClosing platform also means storing and transferring borrower documents like eNotes is seamless and secure, the servicing and selling of loans as well.
For the buyer, they’ll spend less time sitting at a table mulling over papers. They’ll receive the keys to a new house and begin the exciting process of turning it into their home sooner.
How RON Laws are Removing Legal and Psychological Barriers to Digital Closings
When it comes to digital closings, the remote piece is one of many tools. Some digital closings can be performed in-person if that’s the preference of your clients and your staff. More importantly, the legislation helps to solidify digital closings as an acceptable alternative to traditional or hybrid closings.
“Having that acceptance and having it written into a state’s law makes more people comfortable that this is an actual option that’s legal and something they can actually use in their work process. So even if they don’t start using the remote piece of it… having a digital experience in person is more acceptable too.” – Danielle Kaiser, NATIC
While there aren’t many states left that prohibit enotarization outright, some states are silent about it or they don’t have specific legislation allowing it. Danielle notes that thanks to the many professionals who are comfortable asserting that electronic notarization is permissible due to federal regulations like the Uniform Electronic Transactions Act (UETA).
However, as more states are passing RON laws, they are adding the enotary enablement piece to remove any doubt. These RON laws take away that barrier to use an electronic notarization in either in-person on remote closings, so even if your company or law firm isn’t ready to implement a remote online notarization, there is an opportunity to take advantage of an in-person digital closing process.
Steps to Moving to a Digital Closing
Danielle suggests getting comfortable with a hybrid process before you move to remote or fully digital closings. If you’re concerned about whether your state will allow eNotarization, you can at the very least take advantage of eSignature technology.
- Start with a hybrid closing, so you get used to the technology. Make small and manageable introductions to new devices, software, and processes.
- Understand your vendor options by testing out some of the current eSign platforms.
- Ask your lenders about their process and preferences (if any) for digital closing software. In order to move forward with a digital closing, your lender partners will need to have their own technology solutions for managing eNotes. Some may still require certain documents like deeds to get a wet signature.
- Receive approval from your underwriters. In addition to understanding where lenders land within the digital closing process, title agents and agent attorneys will also have to wait for the green light from their underwriters concerning which documents can be eSigned or eNotarized despite whatever state laws say.
- Get your employees comfortable with the eSigning and eNotarization process now, so when fully digital closings are finally approved you can lead the market in your state.
- Once you and your team are familiar with the eNotarziation process in-person, you can train your team on the technology and process for remote online notarization.
The switch won’t be instantaneous. Danielle’s recommended strategy takes a more “slow and steady wins the race” approach.
Important Things to Consider Before Your First Digital Closing
- Examine your E&O coverage to see if your current policy has coverage for any type of transaction you do. Danielle explains that while most policies will cover a process utilizing eSignature or even eNotarization, many don’t cover for the remote process. Many are now providing endorsements to add this coverage, so reach out to your provider before beginning.
- Be cognizant of how you handle private data to ensure compliance with federal and state laws.
Resources to Help Your Title Company or Law Firm
In my conversation with Danielle, she mentioned several helpful resources available to NATIC agents and some upcoming boot camps. Here’s the Knowlege Base link for NATIC Agents.
Learn more about the upcoming Bootcamps on Digital Closing with ALTA and MBA. The next one is scheduled for December 11-12th in Scottsdale, AZ.
Learn More about Digital Closings at ALTA ONE with Danielle Kaiser of NATIC
Even if your state is one of the silent ones on electronic signatures or has yet to introduce a remote online notarization bill, Danielle says this is still the best time to educate yourself on the digital process.
The number of states changing their laws to accommodate the demand for digital closings is increasingly rapidly. Since 2011, 23 states have passed RON laws and many more have introduced bills.
The latest states to pass remote online notarization laws include Florida, Arizona, Maryland, and many more.
The changes are coming fast. If you’re planning to be at ALTA ONE in Austin, Texas this year, it’s worth getting your specific questions answered by an expert like Danielle at her Engagement Lab: Everything You Wanted to Know About Digital Closings But Were Afraid to Ask.
Are you unsure of what to look for in a vendor? Wondering how to get buy-in from your team or boss to make the move to digital closings? Bring any questions about digital closings with you to ALTA ONE and get them answered by Danielle!
Still want more title tech talk? Get your digital fix at ALTA ONE with these sessions.