In 2020, the combination of record-high demand for mortgage refinancing and social distancing requirements led to renewed interest in remote online notarization and other virtual closing solutions.
To conduct virtual closings, lenders can either work with their title provider and that provider’s signing agent panel or opt for a closed platform with its own signing agents. There are numerous benefits to closing with a title provider and their signing agent panel.
1. Leveraging existing relationships. Every lender has unique processes. By the time the lender is ready to close, they already have a relationship with the title provider’s client service team, who is familiar with the lender’s workflows. This working knowledge sets a strong foundation for successful closings.
2. Efficiency gains. The mortgage origination process is increasingly complicated. Adding an additional provider into the mix that is only responsible for one step in the process brings unnecessary friction into the closing workflow.
3. Risk reduction: As the transaction insurer, the title provider has a vested interest in closing and disbursing the loan. Where allowed by law, the provider issues a closing protection letter, and the closing agent stands accountable for following the closing instructions. If the lender has cause to file a claim against the letter, the title provider is responsible for paying that claim.
Lenders face more risk when they use a third-party provider, which may not be in a position to pay out a claim or even to issue a closing protection letter. Having the title company complete the closing protects the lender from this potential liability and can provide a more seamless experience for their borrowers.
Additionally, many underwriters have specific remote closing requirements that must be met for them to insure a loan. When lenders use a third-party provider to close, they could jeopardize the insurability of the transaction.
4. Mortgage industry expertise: Many online notarization platforms are not specific to the real estate industry, so they may lack the expertise to smoothly complete mortgage closings. When lenders close with a title provider, they can proceed confidently, knowing that their signing agent panel understands the mortgage industry and will close the loan correctly and with a high degree of quality.
5. Scalability and capacity: The best title providers have a large network of dedicated signing agents, licensed in remote online notarization, which allows them to scale with their clients. When demand increases, these providers will have trained and experienced signing agents ready to help them keep up.
6. Flexibility: Many online closing platforms require a lead time for scheduling and/or document upload. These added days can develop into delayed closings. A title provider is more likely to be able to accommodate expedited closings, which helps lenders remain nimble and meet their borrowers’ needs. This flexibility is essential during month-end crunch and in high-volume markets, as lenders are experiencing today.
7. Specialized technology and infrastructure: Because title providers are focused solely on the mortgage experience, they make ongoing, sizable investments into developing and implementing technology to provide the best title and closing experience possible. For example, lenders can benefit from working with a title provider that offers real-time, digital scheduling for closings. This technology provides consumers and loan officers with increased convenience and transparency. It improves lenders’ processes by eliminating phone tag and scheduling delays. Instead, the user can access signing agents’ real time availability, select an appointment date and time and receive instant confirmation. This adds to the lender’s credibility as a partner focused on customer satisfaction. To learn more about virtual closings, visit https://www.svclnk.com/exos/virtual-close/.