Cloud-based software systems are designed to make processes, workflow and information retrieval more efficient, streamlined and simply more expeditious. But how has this technology affected the mortgage and title industries? Electronic management of mortgage application/processing and real estate settlement invokes impressions of a totally paperless chain of events. In reality, are e-mortgages and e-closings 100 percent digital? Read on as we explore key points associated with these processes.
With e-mortgages, all phases of loan processing occur digitally. Loan documents are drawn up, executed, transferred and maintained electronically. (Though, a “wet” signature is still needed for many mortgage products.) E-mortgages are beneficial in a number of ways. Errors are minimized and shipping costs (for document delivery) are reduced. Companies are able to decrease their carbon footprint, and enable a faster, more efficient transaction overall. Fannie Mae® offers excellent insight and information regarding this topic on their eMortgages page.
The term “e-closing” leads many to assume the property buyer does not need to be present for the closing. And this may be the case, for those utilizing and embracing cloud-based closing software. While “wet” signatures are still required on mortgage documents, some companies are using e-notarization to verify signatures. Notaries bear witness to the signing of documents through Skype or FaceTime, allowing for a completely remote real estate closing.
The Future of Real Estate Transactions
As with changes to any process in most every industry, complete transformation to a totally digital mortgage and closing process for all transactions is likely far off in the future. Many parties, both mortgage/title professionals and buyers/sellers alike, may continue to prefer doing business face-to-face, or at the very least with a hybrid model that includes partial electronic processing. Others, especially those purchasing homes out-of-state or involved in out-of-area transactions, may find e-mortgages and e-closings more efficient for their needs.
In any case, the industry will likely continue to see a forward push to streamline and expedite real estate sales for a more efficacious process and experience for all.