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
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.
