The Future of Real Estate Closings - The Pen Will No Longer Be Mightier

By Kosta Ligris, Esq. @kligris

The real estate title and settlement process has resisted change and deployment of technology for years. But are we experiencing the "beginning of the end" of the real estate closing as we've known it? If you ask our friends in North Carolina, which successfully conducted its first ever "eClosing" in May 2017 the answer is clearly yes!

Aside from the reduction in paperwork, electronic closings stand to provide tremendous convenience and value to consumers. The Consumer Financial Protection Bureau ("CFPB") ran a study which

found that electronic mortgage closings can benefit the consumer. “While technology alone will not address all consumer concerns in the closing process, our study showed that eClosings do offer the potential to make the process less complex,” said CFPB Director Richard Cordray. “We expect this pilot project and its findings to help inform further innovation that will be a win-win for consumers and industry alike.”

Electronic closings will likely provide consumers with more time to review paperwork (such as lengthy loan documents), reduce the need to travel to a law firm, county registry or title company, and provide an audit trail for all the stakeholders including the consumers, lenders, insurers and regulators.

Even Fannie Mae is now accepting electronically executed promissory notes for mortgage transactions (subject to its terms and guidelines). The reality is that as electronic signature platforms continue to develop, the future of electronic closings as mainstream is imminent.

There will of course be critics, concerned with remote notarization, fraud, and cyber-crimes. But the concept and argument that "we've always done it this way" will not be upheld. As Millennials start to enter the housing market, the future is clear that Millennials hold massive buying power and are changing the housing market. They are used to conducting business on-line and via mobile apps (banking, transferring money, communicating, etc.) - the housing and mortgage industry will need to adapt for them as well. The time is now for the mortgage and title industry to prepare for the future in which the mouse and app will be mightier than the sword.

Originally published   on July 19, 2017

https://www.linkedin.com/pulse/future-real-estate-closings-pen-longer-mightier-kosta-ligris

A member of the REBA Title Insurance and National Affairs Section, Kosta Ligris is the founder, CEO and Managing Partner of Ligris + Associates, P.C.. His practice concentrates on residential and commercial real estate transactions; he represents buyers, sellers, and developers in the acquisition, sale and development of residential and commercial real estate. Kosta also serves in a general counsel capacity for certain investors and developers by providing guidance on various legal matters and coordinating representation with other lawyers and law firms.  Kosta can be contacted by email at kligris@ligris.com. 

RIGHT CHURCH, WRONG PEW

Paul F. Alphen, Esquire

Two recent decisions remind us all of the importance of properly determining the nature of the underlying applicable law.

In Colbea Enterprises, LLC v. Framingham Zoning Bd. of Appeals, No. 16 MISC 000345 HPS, 2016 WL 6658781, at 1 (Mass. Land Ct. Nov. 9, 2016), the plaintiff/landowner applied to the Zoning Board of Appeals for a variance from provisions of the Town’s Sign Bylaw. The variance request was

denied. The Plaintiff filed an appeal in the Land Court.  The Sign Bylaw is found within the Town’s (about to become a City) General Bylaws, not within the Zoning Bylaw. After a complex analysis, the Land Court determined that the matter did not involve “Land Use”, and therefore the Land Court lacked jurisdiction over the matter.

In a second case, Jeune v. Bd. ofAppeal of Malden, No. 15-P-1657, 2017 WL 2729582, at 1(Mass. App. Ct. June 26, 2017), in 2014 the building inspector issued a “correction order” regarding work in the basement of a home performed without a permit. The order alleged that the work was in violation of the local zoning ordinance and the State Building Code. The Plaintiff/homeowner filed an  appeal with the Malden Board of Appeals arguing, in part, that the work pre-dated his  purchase of the property. The Board of Appeals denied the relief. The Plaintiff filed an appeal with the Superior Court, the Court seemed to “misunderstand” the basis for jurisdiction and ultimately decided that the parties agreed (notwithstanding the record) that the case concerned a building code violation, not a zoning violation. Based upon insufficient evidence, the Superior Court ruled in favor of the Plaintiff. The City appealed. The Appeals Court ruled that because the case concerned “enforcement of the building code, the Superior Court lacked jurisdiction on the matter”. The Appeals Court remanded the case for a new entry of judgment dismissing the Plaintiff’s complaint.

Land use law is not as simple as it appears.

A former REBA president, Paul Alphen currently serves on the association’s executive committee and co-chairs the long-range planning committee.  He is a partner in the Westford firm of Alphen & Santos, P.C. and concentrates in residential and commercial real estate development, land use regulation, administrative law, real estate transactional practice and title examination .As entertaining as he finds the practice of law, Paul enjoys numerous hobbies, including messing around with his power boats and fulfilling his bucket list of visiting every Major League ballpark.  Paul can be contacted atpalphen@alphensantos.com.

Introducing REBA’s Model Trust for a Two-Unit Condominium (May, 2, 2016 Audio)

Click here for the written materials (PDF)

Form 63: Condominium Declaration of Trust for a Two-Unit Condominium  can be accessed by REBA Members in the Standards & Forms Area of reba.net: 
http://www.reba.net/standards-forms/forms/

Information about the REBA Condominium Law and Practice Section can be found by Clicking Here.

TRID: Dialogue on Current Compliance Issues (Audio and Written Materials May 2, 2016)

Click here for the written materials (PDF)

The TRID Rider referenced in the written materials can be accessed by REBA Members at: http://www.reba.net/member-section/cfpb-resource-page/

Free ALTA Resources:

http://alta.org/cfpb/

Title Topics: TRID Electronic Collaboration
https://www.youtube.com/watch?v=QTfow3ZGSY4&feature=youtu.be

Title Topics: 5 Key Areas to Prime Your Operation for the New Closing Process
https://www.youtube.com/watch?v=Rze5WuhBz0A&feature=youtu.be

Advising Clients in a Changing Landscape: New Challenges of Residential Mortgage Underwriting

Advising Clients in a Changing Landscape:

New Challenges of Residential Mortgage Underwriting (Audio)

Shant Banosian, Brian L. Lynch, Christine J. Miele

The CFPB has utterly changed residential real estate transactions, not only with the TRID Rule for closing attorneys, but with the Ability to Repay Rule and the Qualified Mortgage (“QM”) Guidelines rules for our lender clients. Join our panel of mortgage broker underwriters for a roadmap to these new federally mandated protocols which have been in effect now since January. Any lawyer who represents buyers – or sellers – in residential transactions should attend this program.

REBA Paralegal Series: Policy Endorsements

James S. Jurgens, Senior Title Counsel at CATIC, and Brenda Wilson, In-house Agency Advisor at CATIC, review and discuss some of the common endorsements requested for residential and commercial transactions, when the same are applicable, and the requirements for issuing the same. 

While there has been an explosion in the number of endorsements now available promulgated by the American Land Title Association (ALTA), those frequently requested is a shorter list.  

Chief Justice Judith C. Cutler Discusses Land Court Rule 14