Raleigh –These days the traditional, almost ceremonial way of doing a real estate closing with a home buyer gripping a pen to sign countless sheets of paper in a blur with the lawyer and notary public hovering to stamp and seal the growing stack is coming to its own “closing.”
Many buyers, particularly younger ones, are insisting that the process be streamlined into a much easier and faster electronic closing, often called an “eClosing” in banking industry terms. There are many advantages to all parties—buyer, seller, and lender—when the process can be completed quickly in an eClosing.
The only thing keeping most of the mortgage and real estate world from migrating to eClosings even faster is that the paper-free process is so new. Some traditional lenders worry that there are not enough solid, universally followed rules in place to make giving up the pen and paper acceptable to their bank officers.
Enter the NC Secretary of State’s Office, which has just published “North Carolina Electronic Mortgage Closing 101—A White Paper”. This “paper”, found on the Secretary of State’s website, is likely the first exhaustive “how to” guide in the country on how to conduct eClosings.
“North Carolina Electronic Mortgage Closing 101” contains sections outlining the many benefits to all parties of conducting closings electronically. It contains guidance on how stakeholders can convert their current paper-based processes to digital ones. It also gives the legal framework for the electronic process, including the importance of in-person electronic notarization.
“As North Carolina’s lead agency tasked with promoting electronic commerce,” Secretary of State Elaine Marshall said Wednesday, “we found a significant point of hesitation for most banks was not the process—which is very secure. Instead, their hesitation was based on the lack of written industry and government guidelines detailing how they should conduct an eClosing.”
To increase mortgage industry comfort in doing eClosings, Secretary Marshall and her Notary Public and Electronic Commerce staff organized an Electronic Mortgage Closing Advisory Committee consisting of members from banks, title companies, government and others who have a stake in moving the paperbound closing process into the digital age.
Together, they wrote the white paper that now appears on the Secretary of State’s website at www.sosnc.gov.
“As best as we can tell this is the first complete white paper on electronic closings in the nation,” Marshall said. “No other state has ever published anything like this to provide information, answers, and guidance to the industry.”
Marshall pointed out that electronic closings are legal and happening every day in North Carolina, especially from several technology-based mortgage companies. “It is here and being done right now,” she added. “We are just trying to get all the industry players into the eClosing game and using the same standards, rules and practices.”
She stressed that the guide is provided free to everyone on the website, including electronic commerce regulators for other states. “We want everyone to know that they can take this how-to road map and use it—whether they are a company or another government regulator,” Marshall said.
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