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When a house is bought with a mortgage, it’s a crucial step to make sure everything is done properly as there are many documents to be signed.
COVID pandemic now has changed the stack of papers into electronic said Pat Kinsel, the founder, and CEO of Notarize, an app that facilitates electronic notarization when he spoke to Bankrate about why a notary is still so important in the home buying process and how it is changing.
In a real estate transaction, during the closing everything has to come together, right from the documents, to the money, and the people.
A transaction happens only when people notarize and sign documents to transfer property and assign debt.
To prevent fraud the documents are required to be notarized. A signed record and creates confidence in the transfer of the property.
Since historically notarizations have been required to be done on paper it’s the hindrance to a digital closing process.
Where you need to go to a title office, and to ship original copies of documents.
As people need actual possession of the original copies of documents, the electronic copies also possess the same authority, and they can be sent to people instantly.
In 2012 the CFPB did a study and said that there were two primary reasons why electronic mortgage and real estate closings dint materialize.
The primary reason being the lack of access to digital notarizations. As there were not electronic notaries, and even there were, they were not online so you had to go in person and sign on a tablet.
The next hitch was the lack of paper trails.
Before the pandemic tons and tons of time and money were spent getting legal clarity.
About 23 or 24 states had passed laws to accept electronic notarization even prior to COVID Fannie Mae allowed people to do online closings but they had to get prior permission to do that. The pandemic helped clarify the legal questions.
Now when you’re trying to buy your home you do not have to drive into an office but just do it online, so the work gets done faster and more efficiently.
Reference Source: Bankrate
