Home Topics Real Estate From cold to closed: How can seamless closing be ensured?

From cold to closed: How can seamless closing be ensured?

In this third and final installment in the series on digital transactions, we’ll move beyond search and demo to the signing and closing process. Here are the main types of digital signatures (and their benefits).

From online demonstrations to purely digital signatures and deals, the digital transaction has blossomed to the full. Throughout the month Inman explores the companies and technologies that are driving this new world of digital transactions.

This article is the second in a three-part series that delves deeply into digital transactions.

No other part of the transaction process may have had to go virtual earlier than the signature process. With the advent of electronic signatures and remote online authentication in recent years, options have emerged.

In some states, for some lenders, and for most processing providers, digital signatures are a reality. This is a result of patchwork-level legislation and the resource-intensive introduction of new technology by lenders.

Although there are numerous variations, there are basically two main types of digital signatures in 2021: hybrid personal e-closing or “hybrids” and remote online notary’s offices or “RON”. Both are briefly described below:

1. Hybrid E-Closing (Hybrids)

For full electronic closings, as the name suggests, every single aspect of the transaction must be electronic. Only a few lenders, settlement agents and county clerks are able to fulfill this high order together.

Like links in a chain, each piece must be present. Hybrid electronic locks are simply a legal way of manipulating most documents electronically while “papering” those documents that require wet-ink signature or personal authentication.

2. Remote online authentication (RON)

Both the seller and buy side of the closing process can be completed using RON platforms which ensure proper authentication, security and privacy throughout the signature process. Most vendors offer both the specially designed technology platform and a group of certified notaries to facilitate signing on behalf of the lender and the settlement agent.

While everyone agrees that fully digital signatures are the ultimate digital destination, some state laws and most lender technologies are still in the works. If remote online authentication and electronic notes (“e-notes”) are not available, wet signature and personal authentication are still required.

Fortunately, tech-forward notary firms can now enable hybrid electronic locks that allow one or more signers to jot down the documents that do not need to be notarized. This leaves only a few documents that have to be wet signed by the consumer and stamped by the notary. While the hybrid e-closing is not entirely digital, it gives the consumer more time to understand the paperwork and less time in front of the notary.

If your state doesn’t allow remote online authentication or your lender isn’t ready for e-notes, a personal signature will be required. However, this can be minimized if the lender allows a so-called “Skinny” or “Express” package in a hybrid signature.

As Mark Fleming Jr., President of Signature closer recently said, “We believe that hybrid signings are the next logical step for companies considering a digital transaction strategy. These signatures will serve as a gateway for completely removed online signatures in the future as the barriers to entry are addressed and removed across the country. “

Today’s consumer expects a number of ways that brokers must work with mortgage and escrow providers who offer the full range of allowable digital signature options.

The abstract

Seasoned agents know that seamless closures are the final piece of the puzzle to get positive reviews and heartfelt recommendations. That’s why the closing experience is so important, whether it’s in person or online. To get the best digital graduation experience available in your state, do the following:

  • E-signature: Make sure your mortgage lending and fiduciary experts have the ability to pre-provide documents for electronic signature, if allowed.
  • RON closures: Find out if remote online legalization is available in your state, and if so, which mortgage lenders and title companies have implemented online closures. In states where RON is now legal, this signature method can be used to sign sellers on almost any transaction.
  • Hybrid e locks: Make sure your industrial partners can enable hybrid electronic locks that are available to some extent in all states. With hybrid closures, anything can be electronically signed except for documents that require either a wet ink signature or traditional authentication.

Continuation of your digital transaction journey

The digital transaction experience that is made available to consumers is evolving and in this way offers more freedom of time and place. Today’s technology offers a great digital experience, from searching to viewing to signing.

Agents need to study how key players and new disruptors are working to improve the customer experience. In addition, agents need to research and evaluate new tools to meet the increasing demands of consumers for a seamless digital transaction.

Marvin Stone is senior vice president of business integration for the Stewart Title Guarantee Company. Connect with him on Twitter.


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