eClosing and eSigning Real Estate Transactions
Real estate settlement is going digital to create a better closing experience while reducing risks for all parties. But this transformation must be carefully managed to avoid a negative impact on land ownership records and the mortgage finance engine driving our nation's economy and personal wealth. First American is leading this transformation and developing innovative and secure ways to improve the closing experience for our customers.
Hybrid eClosing: Many documents can be reviewed and esigned in advance of the closing, while some documents must be wet signed in person.
In-Person eClosing: All documents are signed in person with a notary and valid proof of identity.
Remote Online Notarization: All documents are eSigned and identity is verified with notary in a remote location.
Infographic Guide to eClosing and eSigning
View and share this infographic that highlights the benefits of eClosing, the different types of eSignatures and the different types of eClosings offered today.View the Infographic
State-by-State Guide to Remote Online Closing
Click on a state to view the current status of the law for RON.
- Law Passed
- Legislation Pending
- Legislation Proposed, Not Passed
- No Legislation
Remote Online Notarization (RON)
Remote Online Notary eClosings hold the promise of a better consumer experience and better risk management. The mortgage and settlement industries are advocating for well-crafted laws that will properly enable this technological solution.
Become an Online Notary
Select a state to learn more about the requirements to become an online notary.
Frequently Asked Questions (FAQs)
What is an eClosing?
While the industry has yet to settle on a standard definition for eClosing, an eClosing is generally any real estate closing event or process in which the buyer, seller, borrower, notary or others use an electronic signature (eSignature) to sign some or all of the closing documents.
Are there different types of eClosings?
There are three basic versions of eClosings. Each type is distinguished by which closing documents are electronically signed and the type of notarization used.
- Hybrid eClosing — In a typical hybrid eClosing, the lender's promissory note and any documents that require notarization (deed, mortgage, etc.) are signed with traditional wet ink on paper in the physical presence of a notary public. The rest of the closing documents, which do not need to be notarized, are digital and eSigned.
- In-Person eClosing (aka "Full" eClosing) — All documents are digital and eSigned. The lender's promissory note and any documents that require notarization (deed, mortgage, etc.) are eSigned, and the eSignature is executed in the physical presence of a notary public. The documents requiring notarization are eNotarized using a digital notary seal and the notary's eSignature. The rest of the closing documents, which do not need to be notarized, are digital and can be eSigned without a notary being physically present.
- Remote Online Notary (aka Remote eNotarization or Webcam Notary) eClosing — All closing documents are digital and eSigned, and the lender's promissory note and any documents that require notarization (deed, mortgage, etc.) are eSigned as part of an online video session between the notary public and the buyer/seller/borrower. In the online video session, the notary interacts with the consumer in real time while the consumer eSigns documents. The notary then eNotarizes the relevant documents using a digital notary seal and the notary's eSignature. The rest of the closing documents, which do not need to be notarized, are digital and can be eSigned without a notary being physically present.
What are the benefits of an eClosing?
eClosings can enhance the closing experience for all the parties involved while improving efficiency.
Consumers can benefit from increased convenience and more time to review documents before signing. eSigning also helps accelerate the final closing with shorter signing appointments.
Settlement agents can benefit from shorter signing appointments and increased efficiency with some documents being signed in advance of the signing appointment. eSigning can also improve quality control by ensuring that there are no missed signatures.
Lenders can benefit from reduced risk and operational errors as a result of missing signatures. eSigning also allows lenders to offer a more convenient closing experience for their borrowers.
How do eClosings affect underwriting risk?
For title insurance underwriters, eClosings have powerful potential. If deployed well, they can simultaneously reduce underwriting risk and improve the borrower/seller experience. For example, a well-designed eClosing process can give borrowers and sellers more time to review documents in advance of the closing, prevent "missed signatures" on documents at the closing, enable the efficient and accurate distribution of executed documents to the parties, create a seamless process for recording documents upon closing, and reduce post-closing "clean-up" work.
However, poorly deployed eClosings with weak processes can have exactly the opposite effect. This is especially true with regard to remote online notary closings because the buyer/seller/borrower is not in the same room as the notary public. this can make it difficult to detect serious problems like fraud, duress, elder abuse, and mental incapacity. These problems create substantial risk of claims unless stopped in advance. For this reason, it is important to use only eNotary processes that have been carefully designed to prevent these problems. The Mortgage Bankers Association (MBA) and the American Land Title Association (ALTA) have collaborated to create a model online notary law with strong safeguards to protect against these consumer harms. Laws and processes that lack these consumer safeguards present undue risk to title insurers and consumers alike.
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