The marketplace reality is that consumers expect a digital solution to improve their home buying experience. We must meet our customer needs and problem-solve a solution that allows real estate transactions to close electronically. A hybrid approach to e-Closing would allow the title and settlement industry to begin some form of e-Closings today while working with technology providers, Secretaries of State, county recorders and state legislatures to move the industry toward a full e-Closing in the near future. A few things to keep in mind:
- Title and settlement agents should be familiar with Fannie Mae’s “How to Implement eMortgages” and Freddie Mac’s “eMortgage Guide” as these are useful tools when preparing for lender requirements. The Federal Housing Administration (FHA) also accepts eSignatures on several FHA mortgage documents. Fannie Mae, Freddie Mac, mortgage lenders, and investors will all have different requirements that are not considered here. Our industry’s approach to e-closing will change as we learn of these requirements.
- While there are a number of challenges and risks to overcome on the way to a fully paperless eClosing, one of the perceived risks of e-Closing is that the technology is not safe and secure. Technology is now available for electronic signature that includes accuracy of signatures and advanced authentication levels including personal information based on public records. There are a number of technology pioneers in this area, all of whom are doing various types of e-Closing safely and securely.
- E-Closing in the real estate transaction is the future of everything, as technology is a big motivator to the next generation of underwriters and customers. Our customers are demanding choices and demanding to do business electronically. As title insurance underwriters and settlement agents, we risk becoming obsolete if we are not a part of this future. The tools exists today to improve the consumer’s experience in the real estate closing using a hybrid approach while the law evolves and the industry sorts through the challenges and risks which may prevent a full e-Closing today.
By digitizing the home buying process, we can deliver the products and services the way customers want it, enabling consumer choice and a better experience for homebuyers of all ages. So, it is time to consider a digital transformation to your real estate closing business. Get more in-depth on e-closing in “From Hybrid to E-Closing: Moving the Title & Settlement Industry toward a Paperless Real Estate Closing.”