The digital future of real estate closings – ClearTips
on a Wednesday At 4 pm in June 2017, I was in a small packed office in midtown Manhattan.
The crowded convention hall, with at least five more people who would recommend any fire marshal, stood at a high level of comedy with a generous collection of paperwork and cheap pens. As I felt near the end of the third hour and the ink of my seventh pen, I realized that the mortgage closing process might be somewhat ancient.
After closing my first house, it was inconceivable for me that every other expense of my life had gone digital, but the most important purchase I made was given hundreds of signatures and several handwritten checks. By comparison, I have been able to repay my student loan, which is comparable in magnitude to a down payment, specifically through an online portal.
How COVID-19 is Accelerating Digital Progress
The COVID-19 epidemic has changed almost every aspect of our lives. A possible silver lining for the real estate world could be an extortion with mortgage closing process. Technological advances like e-closing are accelerating this difficult process in the digital age. The US Census Bureau released the figures in July citing an increase in homeownership across the country as the epidemic increases demand for single-family property outside urban areas. This is confirmed by a significant spike in mortgage applications seen in the second quarter of 2020.
The first signs of digitization of the mortgage origination process were seen in mid-2010 when lenders began adopting digital disclosures. Despite the availability of technology, the market has been slow to fully embrace digital closing that enables complete loan packages to be electronically reviewed, recorded, signed and notarized. A true e-closing includes a digital promissory note (“eNote”), a virtual closing appointment, and electronic transfer and recording of documents by county, all of which can be remotely coordinated and executed by the parties involved. The market started gaining momentum in recent years, and we have seen a growth of over 450% in the number of e-mortgages from 2018 to 2019.