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Digital Closings in an Amazon World:
The Title Professional’s Guide to Implementation

By Danielle L. Kaiser, Esq.

How often do you order something from Amazon? Weekly, daily, hourly? Are you more likely to order something from a department store’s website, or drive to the department store and look for the item in person? Do you use a delivery service for your grocery shopping? Do the answers to these questions today match your answers from 2019?

The disruption that Amazon began in the retail world is spilling into more industries. Consumers are discovering the convenience of digital options in many facets of their daily lives. While most people hope to return to the normalcy of a pre-COVID world, some things will never be the same again. Consumers have discovered the digital options and flexibility influenced by a socially distanced world.

The digital world’s fast and convenient access to all types of transactions has not left the title industry untouched. Digital real estate transactions are becoming a standard practice as consumers expect more digital options.

An Industry Prime for Change

The title insurance industry had shown its creativity in 2020 and 2021 as people dealt with an ever-changing set of circumstances due to the COVID-19 crisis. Our industry quickly pivoted to offer a variety of closing options to accommodate closings, while protecting the people involved in the transaction. We saw curbside closings, drive-thru closings and closings with plexiglass pop up seemingly overnight. While the industry worked to find solutions to conduct closings in different ways, many title agents looked for a completely new process.

According to the American Land Title Association’s 2021 Digital Closing Survey, the number of title agents offering digital closings in 2020 increased 228 percent compared to 2019.

Digital closing options have been around since 2000, when the federal E-SIGN Act became law; however, it took a global pandemic to push a wider adoption. As the title industry flexed its strength as an essential service provider, title agents everywhere looked for ways to be efficient as the number of refinance and resale transactions rose.

The Digital Closing Survey proves that many title agents looked to digital closing options as a new solution for their businesses in 2020. A digital closing encompasses many types of electronic transactions:

  • An in-person, electronic notarization (IPEN) transaction, where all documents are electronically signed at the closing;
  • A remote online notarization (RON) transaction, where electronic documents are signed via a remote platform; The signer and the notary are not in the same physical location; and
  • A hybrid transaction that encompasses a variety of electronic and paper documents which are signed at or before the closing.
Benefits for Lenders and Consumers

As title and settlement agents have begun to embrace many types of digital closings, we find the options for consumers are growing rapidly. Consumers are looking for a better closing experience that is streamlined and convenient. The digital options that are being implemented in the title industry save consumers time and increase transparency.

There are also several benefits for lenders in digital closings. Lenders can provide an improved consumer experience while obtaining operational efficiencies. Electronic documents lead to better quality data with fewer errors. Lenders can quickly deliver loans to the secondary market, bringing money in the door faster than ever.

Title agents embracing digital closings are finding the potential to increase their market share while offering more options to their consumers. They are reducing their closing times and reducing the number of document errors.

Going Digital: A Practical Guide for Title Professionals

To learn the platforms and begin to integrate the technology into your workflow, it is simplest to start with seller-side documents or cash deals. Another tip for getting started is designating one team member to be the primary point of contact, and for him or her to become the digital expert for the office. This digital expert can assist other team members and be available for troubleshooting with customers. There is a learning curve to implementing digital closing technology. It is important to find a provider that meets your technology and support needs for setting up a digital workflow.

An alternative strategy is to work with a third-party remote online notary vendor. There are several RON vendors with their own staff of remote notaries available for use in your transaction. This can be a very simple way to test the waters with digital closings and offer more options to your customers.

As you begin to integrate digital options into your workflow, be sure to reach out to your errors-and-omissions (E&O) insurance carrier to verify that you have the same coverages for digital transactions as traditional, pen-and-paper closings. As digital closings – particularly those conducted with RON – are becoming more common, many carriers often add an endorsement to your policy for coverage for remote and/or digital closings.

As your office becomes more comfortable with digital closings, you can find lender partners who are ready for the digital transition as well. The list of lenders with digital capabilities continues to steadily grow. You can access the list of lenders here.

NATIC/Doma insures hybrid and IPEN transactions in all our jurisdictions. We are also insuring RON transactions in more than 30 jurisdictions. This list continues to grow as more and more states are enacting RON legislation. You can always contact our underwriting team at NATIC/Doma for specific state requirements and additional guidance at [email protected].

Danielle L. Kaiser is Vice President, Deputy Chief Underwriting Counsel for Doma.