What is an e-closing?
An e-closing, sometimes called an online closing or remote closing, as a real estate settlement process that is conducted electronically instead of face to face.
With the use of dedicated software specifically designed around the e-closing process, clients and attorneys log into an online portal where documents are review, identification is validated, and documents are signed; all with full legal effect.
Right now the closing process is face to face but full of paper and not very efficient. The day before a closing, figures are finalized by sending a Closing Disclosure back and forth multiple times until it is balanced, then documents have to be drafted by the bank, sent to the attorney for modification, then the package of 60 to 100 pages has to be printed. When the client and attorney finally meet, the documents have to be reviewed with the client; documents they have never seen before. If any changes have to be made, more time is wasted scanning and e-mailing documents. Once signed, the document have to be scanned back in and e-mailed to the lender for funding authorization. After the closing, the original documents have to be FedEx’ed back to the lender within 48 hours.
With e-closings, there is no waiting to share documents. They are available for review on the portal ahead of time. Any changes that have to be made can be made live and seen by all parties instantaneously. When signed, the documents with signatures are instantly visible to the lender for review. When complete, the lender already has the documents and nothing needs to be FedEx’ed back to them.
Plus, the client can conduct the closing from home, from the office, even on vacation. They can buy investment properties remotely, or close on a property before relocating across the country.
But how can e-closing work? Don’t documents have to be notarized? What about information security?
The key to e-closings is Remote Online Notarization, or RON. Once the State of Connecticut passes the bill the Secretary of State will pass regulations for remote online notarization, allowing notarization of mortgages and deeds electronically.
Remote Online Notarization is just as secure as e-mailing and scanning documents, and in some ways even more so. The software logs IP addresses, takes time stamps as well as screenshots during key moments, and handle ID verification.
GLouzgal Law PLLC prepares for E-closings in Connecticut
We are preparing for the e-closing process that is sure to come to Connecticut very soon. We are compiling and testing the necessary software and hardware, getting training, and developing specialized systems for the e-closing process.