Digital Closing Resources in a Changing World
We break down a complicated process by describing the five main components of the Digital Closing Process.
Remote Online Notarization (RON) started making headlines several years ago but was slow to catch on because, frankly, it didn’t really seem necessary. Then, we could all gather in the closing office and sign with paper and pen, and the technology was new and a little scary. It was like a “big black box.” Few understood how the technology worked, and most approached RON as a convenience for the few people who perhaps couldn’t easily get to the closing office. Articles were written, webinars were presented, legislation moved forward piecemeal, but since RON was considered only a “nice to have” option, there was no widespread incentive to embrace it. It would be understood and adopted over time.
Well, “TIMES” HAVE CHANGED!
We are NOW in the midst of a national pandemic. States are issuing “shelter in place” orders; the federal government is urging people to stay at home; and we’re afraid of getting too close to one another lest we expose ourselves or someone else to the COVID-19 virus. The nation is at home and unable to conduct business as usual.
The real estate, title, and financial industries are a cornerstone of our economy. Our businesses are essential to our country’s entire system of trade, exchange, and consumption of resources. So how do we continue with our business without the need for physical contact? In states where we can, one way is to turn to RON, which enables us to conduct closings remotely. Consumers can go online and execute documents electronically while the closer and notary are located elsewhere.
Many states have recognized RON’s potential as a solution and enacted legislation. There is currently extensive, ongoing efforts to legalize RON across the nation through federal legislation. However, legalizing RON is not enough because RON requires the efforts of many stakeholders to be successful. We all have to work together and be “on the same page.” Do you know what happens before or after you do your part in the Digital Closing Process?
Alliant National’s new Components of a Digital Closing series was created to give people a common understanding of both in-person electronic closings and remote digital closings facilitated by RON. We produced this series of handbooks to demystify the process – eliminate that “black box” – and provide readers with the “big picture” of how it all works. There are a lot of moving pieces and a lot of players who must come together (hence the “eCollaboration” component of the series) to create the infrastructure needed for the successful adoption and implementation of Digital Closings. Our series of handbooks shows how the Digital Closing Process works from beginning to end.
To break down a complicated process, we’ve described five main components of the Digital Closing Process in these series of articles as:
- eSign = electronic signing or electronic signature
- eNotary = electronic notary or electronic notarization
- eRecording = electronic recording
- eVault/eNote = electronic vault and electronic note (respectively)
- eCollaboration = electronic collaboration
It all begins with eSign and expands from there. The advent of recognizing an electronic signature as legally enforceable led to electronic notarization – after all, an electronic notary (and the principals and witnesses) must be able to electronically sign documents. Then, that electronically executed and notarized digital deed, mortgage or deed of trust must be recorded in the public records, so electronic recording (or the acceptance of “papering out” as discussed in the article on eRecording) must be available, or all is for naught! And what about the electronic note? Well, there is a system set up to facilitate the creation, transfer and sale of eNotes through the use of an electronic vault.
Within each article, we explain what the component is or does; we discuss its history or describe its legal evolution; we provide links to other articles or resources on the subject; and we provide a technological overview.
The current health crisis presents many challenges for our industry, but it also represents a unique opportunity to implement technologies that will ultimately make the real estate transaction safer and more efficient than it has been in the past.
It is our hope that you will find Alliant National’s Components of a Digital Closing series be a comprehensive, ready reference as the industry transitions toward the digital closing environment.