By SingleSource | February 23, 2021
Among the many challenges faced during the COVID-19 pandemic in the mortgage industry, from the surface it seems origination title and settlement has remained unscathed, given the high volumes of purchase and refinance transactions. However, over the course of 2020 and the start of 2021, we have seen a variety of issues arise while adjusting to this new normal.
From a never-ending stream of county courthouse closures to a new need for socially distanced closings, and the rising demand for a true digital mortgage experience, we have seen it all. We would like to uncover several of these challenges and review the steps we have and are continuing to take to navigate these unprecedented times.
The Elusive Electronic Closing and the New Era of the Digital Mortgage
It is inevitable that electronic real estate closings will one day replace the traditional ink closing as the norm in real estate transactions. During these unprecedented times of COVID-19 and social distancing, the change could be sooner rather than later. Over the past year, many states have approved the use of electronic notarizations to help support social distancing in closing real estate transactions.
This elusive ‘digital mortgage’ is on everyone’s mind, yet there are still a variety of misconceptions surrounding this buzzword, so it is important to discuss the options in further detail. There is no universal definition for a digital mortgage, in fact there are several types of eClosings available, with varying degrees of digital involvement.
One of the biggest misconceptions in the industry regarding providing a digital mortgage experience, is that lenders must rely on the title closing company to make this decision. However, these alternative processes are in fact lender driven. As mortgage lenders approve the use of electronic closing options, SingleSource as a national title company, is prepared to be a valued partner through this process.
Types of eClosings:
- Hybrid eClosing: All parties appear in person to eSign and eNotarize some digital documents, and wet sign and notarize other paper documents.
- IPEN – In Person Electronic Notarization: All closing documents are electronically signed in the physical presence of the notary and witnesses.
- RIN – Remote Ink Notarization: Borrowers appear before a notary by means of two-way, audio video communication, where the notary observes the wet ink signing of documents. Once signed, the documents are returned to the notary for wet ink signature by the notary.
- RON – Remote Online Notarization: All closing documents are electronically signed and notarized using two-way audio-video technology over the internet. The parties do not need to be in the same location. The following are underwriter requirements/restrictions for RON closings:
- Property must be a 1-4 family residential unit.
- Loan amount must not exceed 1 Million Dollars.
- You must confirm in advance of closing that the recording office will accept a RON notarized document.
- An underwriter RON approved electronic closing platform must be used.
County Courthouse Closures across the U.S.
While the world continues to adjust to the ever-changing global pandemic, we are seeing title issues that historically have not occurred outside of regional natural disasters, and even then, the access restriction to a County Clerk or Recorders Office is minimal.
In this new age of COVID-19 restrictions recording office closures have been frequent, and more importantly, long-lasting. Some recording offices have even gone so far as to only allow a limited window per day for abstractors to access physical records, and typically on a first come first serve basis. So how do we service our clients while managing title searches?
The solution: Communication
Communication is the backbone of good customer service and in handling delays that have a ripple effect through the entire process, both for our lenders and for the title and settlement company. While we cannot stop the restrictions from flowing in, we can give ourselves a helping hand by mastering effective two-way communication.
This communication at a bare minimum is relaying to the client what closures we are encountering in each county and what orders are affected, outlining specifics and potential reopening timelines. Taking this one step further, the communication must then extend to our vendor partners, the abstractors, where we can truly make a difference for the client.
Real estate title companies must work closely with their abstractors to maximize what title searches can be returned, sometimes in bulk. One way to do this is to establish the service level timeline, giving your abstractor a clear understanding of which orders to prioritize, based on client need, and how to escalate a rush effectively. Then ask your abstractor to return a plan of their own for how they will facilitate your title search needs. Your abstractor should be just as proactive as you are in creating a solution.
Another alternative is to make sure you have a well-defined and smooth vendor onboarding process to partner with new abstractors in the affected county. While you may only have one vendor in a county that has to adhere to a window of time granted by the recorder’s office, you can hedge your bets by recruiting additional abstractors in that county and other surrounding counties to maximize the number of orders worked in the allotted time set forth. All in all, having a strong vendor network of abstractors, title notary signing agents, and closing agents dispersed across all locations is now more important than ever.
The Rise of Technology and Customization in Title Services
As we continue to navigate working in a global pandemic, SingleSource has developed alternative solutions to the traditional title and settlement processes. From online abstracting to curbside closings – SingleSource Title and Closing looks quite different from the pre-pandemic days.
Through market research and vendor panel surveys we have continued to offer non-traditional closing processes – upon lender approval. If the lender permits a new process we will provide a compliant non-traditional solution. As a national title company, several of SingleSource’s innovative title closing solutions from 2020 include – curbside closings, county closure updates to our clients, increased online abstracting, hybrid eClosings, and in a few instances full eSigning. We are excited to continue adapting and customizing alternative solutions for our clients, to keep safety at the top of mind for their customers and our vendor partners during these times.