Title companies are pulling out all the stops to get deals closed during the COVID-19 pandemic. But they say the best way to close -- not just during the outbreak, but moving forward -- is electronically.
Specifically, title firms are backing what they call remote online notarization -- RON, for short.
Typically, closing documents are papers that must be signed in front of a notary public. Notaries ensure the signatures on documents are authentic, and that the signer knows what he or she is signing and does so voluntarily -- thus helping prevent fraud and forgeries.
Around the turn of the century, federal and state laws began authorizing the use of electronic signatures. But the states were slow to implement and approve the technology. It wasn’t until 2011 that Virginia became the first state to OK remote electronic notarization.
Two years ago, the National Association of Secretaries of State, a group of officials from all 50 states, the District of Columbia and U.S. territories, gave the movement a needed push by adopting nationwide standards for online notarization.
Meanwhile, at the federal level, a bipartisan federal bill to enact a consistent RON standard has been introduced, but has yet to gain any traction, according to Kobie Pruitt of the Mortgage Bankers Association. And that has implications of its own.
“The absence of a single federal law, along with state efforts to create emergency orders to permit loan closings, has created a mismatch of rules across the country for the use of remote online notarization,” says the MBA’s Rick Hill. This leaves befuddled investors like Fannie Mae and Freddie Mac to figure out what’s permissible on their own.
To date, according to NASS, 38 states have authorized some form of e-notarization, which they call REN, or remote e-notarization. But only 23 promote the practice, and perhaps half of those are still writing their rules and regulations.
Because of the coronavirus, though, several states have issued emergency orders temporarily permitting remote notarization. But until other states move forward, some title companies are doing all they can to make the closing as safe and easy as possible during the pandemic.
And make no mistake, title companies are busy -- though mostly with refinancings. “Business has been off the charts,” says Patrick Stone of WFG National Title. In the last 30 days, though, settlements with homebuyers have “dropped off significantly,” Stone says.
When there is an in-person closing, Stone says that WFG title agents are “making every effort to minimize personal contact.” Others are doing the same.
Those efforts include cleaning and sanitizing closing rooms, wearing gloves and masks, providing hand sanitizer, using only brand-new pens at each closing, and even putting up Plexiglas walls with holes at the bottom so papers can be pushed back and forth. They are also pursuing what Stone calls AVON, or audio-visual online notarization. But Stone would prefer to go full-bore with RON.
So would Allan Pollack of OpenClose, a loan-origination software company. “RON was never more important than today,” he says. “The old way of doing business has changed.”
Fidelity National Financial, the country’s largest title insurance company, is launching what it calls a “comprehensive digital closing experience” with a platform that brings buyers and sellers into the process prior to the actual closing. It uses digital signature technology that allows for certain documents to be signed in advance, in areas where RON is permitted.
Some closing outfits have become even more creative. Some are going to people’s residences to get the job done; others are performing curbside closings similar to the curbside pickups being offered by restaurants.
Cook & James is doing both. Prior to the crisis, the Georgia law firm was doing “at home” closings. “It doesn’t matter if it is at home, at your office or even at your favorite happy hour spot,” reads the firm’s website. “As long as we have access to a power outlet and a cell signal, we’re good to go.”
Now, it’s doing curbside settlements. Drive up to one of the firm’s two Atlanta-area offices and a masked and gloved attorney will bring the documents and a fresh pen to your car window. Clients wait in their cars while the masked agent goes back and forth from office to vehicle.
Another Georgia company uses two traffic lanes: one for buyers, the other for sellers. Others are closing deals while keeping a safe distance from clients on porches, patios and driveways.
NewDay USA, a major lender to veterans and servicemembers, now allows some documents to be signed electronically at home on the borrower’s computer. But the five most important documents are delivered to the front door by a notary. As long as you can be seen signing them, they are verified and notarized from a safe distance.
Notarize, a platform for digital notarizations -- which saw its business jump four-fold in March and has $23 billion in real estate transactions ordered for April, according to one report -- is trying to hire 1,000 notaries in Florida, Nevada, Texas and Virginia.
And in Chicago, Berkshire Hathaway HomeServices is using “Zero Touch” video signing to close sales through its affiliated title company.