Change is undeniably upon us. Whether you have noticed it or not, eClosings have become indispensable in 2020, and are hereafter likely becoming the de-facto standard for closing loans.
The numbers behind eClosings are hard to ignore. According to HousingWire, MERSCORP’s eRegistry is experiencing record growth in eNote registrations, including nearly 37,000 eNotes in June 2020 alone. That’s more than double the number of eNotes registered during the entire year of 2018—yes, more eNotes in June 2020 than in all of 2018!
There are several reasons why this is happening. Clearly, one of them involves the COVID-19 pandemic. With more people social distancing and working from home, digital transactions are taking priority in every industry, including ours. But there are other reasons, too.
As the industry has experienced, eClosings have countless benefits, including eliminating paper and shipping fees, reducing the likelihood of closing errors and providing a faster and easier signing experience for borrowers. Our own eClosing solutions have been found to reduce closing times by 30 to 70 percent.
Social Distancing and Advancement of RON legalization
Another factor influencing the increase in eClosings is the growing popularity of remote online notarizations (RONs), which involve a video conference between the notary and the borrower during which the notary witnesses and eNotarizes the borrower’s signature. RONs are getting a huge boost from the COVID-19 pandemic, enabling social distancing.
Before the pandemic, almost half of all U.S. states had made RONs a legal method of notarizing documents. Since then, around 20 more states have joined them, some passing emergency legislation allowing RONs to be used during the pandemic. Bipartisan federal legislation supporting RONs is in the works as well.
eClosing Options and Benefits
While 2020 may be the year of the eClosing, not all eClosings are the same—and it’s wise to know the difference. For example, a hybrid eClosing is one in which some documents are signed electronically while others are signed in ink in the presence of a notary, while a full eClosing occurs when all the closing documents, including the promissory note, are in a digital format and have been eSigned.
Hybrid eClosings are popular in states that require some documents to be signed in ink or notarized in person, but they still take less time than paper closings. A full eClosing takes even less time and effort, and results in shorter funding times and higher quality loans. The ultimate eClosing option is the RON eClosing, which is a full eClosing in which the borrower eSigns documents remotely over the Internet.
Choosing the Right Partner
While eClosings are more popular than ever, implementing them successfully depends on choosing the right partner. This is no time to settle for just any eClosing partner.
With many years of experience, eClosePlus has become a nationally recognized, trusted partner for Residential lenders and Settlement Agents nationwide. Plus, the company’s intuitive eClosing solutions are document- and platform-agnostic. This means eClosePlus can take any document from any system and auto-tag it in seconds, so clients don’t have to change platforms to utilize our solutions.
So much is evolving with eClosings, that it can be difficult to determine which strategy works best for your organization. However, speaking with an eClosing expert is always the best way to get started. If you have questions about eClosings, or you’d like to see what sets eClosePlus apart, drop us a note at [email protected]. We’d be happy to help.