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National Mortgage Professional
Aug 14, 2008

Electronic closings: A virtual realityCourtney S. CasperUniform Electronic Transactions Act, Electronic Signatures in Global and National Commerce Act, electronic closing transaction, electronic loan closings As early as 1990, pioneers in our industry began developing the tools necessary for electronic loan closings. The passage of the Uniform Electronic Transactions Act (UETA) in 1999 and the Electronic Signatures in Global and National Commerce Act (ESIGN) in 2000 laid the legal framework for broader acceptance of e-documents. Today, as lenders and title companies refine their specific processes and software platforms, electronic closings are becoming more widespread. Although UETA and ESIGN were intended to promote uniformity in e-commerce, each state has its own particular regulations regarding loans and closings. Therefore, while some lenders are prepared to accept electronic loan documents nationwide (e-notes and e-mortgages in particular), title companies and/or closing agents may have to grapple with the obstacles arising from state and local laws. The benefits for the parties involved in the transaction have motivated industry leaders to push for the nationwide acceptance of e-closings. For lenders, title companies and closing agents, an e-closing streamlines the entire lending process. If performed properly, it may eliminate the need to print, scan and fax the reams of paper necessary to document the loan agreement. In addition, it shortens the time required for lenders to make loans available on the secondary market. From the buyer or borrower's perspective, an e-closing means less time, fewer documents to execute, and, in some cases, the capability to view the loan documents prior to closing and e-sign documents from home. Currently, there are several platforms through which an electronic closing transaction may occur. Under some programs, the buyer or borrower will be given a user ID and password prior to closing. The borrower and closing agent will meet and log on to the particular system being used together. The buyer may be asked to Click to Accept or to sign using a digital signature, which was either obtained prior to closing or is obtained through a tablet PC. Since each state has its own laws governing the conveyance and encumbrance of real property, it may still be necessary for the borrower to sign paper documents. In particular, many states recorder's offices do not have the capability to accept electronic deeds or other title instruments. With continued refinement of the process and encouragement from industry leaders, trade associations and national title insurance companies, e-closings will become more and more common. Perhaps someday we will truly just Click Here to close. Courtney S. Casper is a senior managing attorney for Morris|Hardwick|Schneider. She may be reached at (706) 367-8192 or e-mail [email protected]
Published
Aug 14, 2008
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