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By Chris Lodge
Real estate information manager
Talon Group NW Division
Ask About eRecordings
Digital document recording could have advantages for your title company and you
document recording is an essential
aspect of real estate. But clients can
overlook its importance.
New technologies are in place to
make sure that this process is more
streamlined and safer for brokers and
the title companies they use.
If you are not sure if your title company
uses electronic document recording, or
eRecording, it’s high time you asked.
Traditionally, companies involved in real
estate transactions would need to send
original hard copies of all documents to
the local county recorder’s office to be recorded. The documents were processed,
sent and then stored in file cabinets.
Although title companies can be efficient at this practice, eRecordings offer other benefits. Here’s how they work:
Your title company scans documents and
e-mails the document package. The eRecording company processes the document
and sends it to the county for recording.
Once the county has accepted the
document and recorded it — and not all
counties accept eRecordings — parties
are notified via e-mail.
Why should you care if a title company uses eRecordings? Because your
business relies heavily on referrals, and
customer service is critical to maintaining your client relationships. ERecording services can accelerate document
workflow, reduce courier expenses and
increase efficiency for your loans —
which allows brokers to provide better
customer service for borrower clients.
ERecordings also can provide some
security for brokers. For one, title companies aren’t relying on a courier to get
documents to the county. The originals
also never leave the office, so there
are fewer instances of documents being lost or misplaced en route. Security
software also can protect against tampered or stolen data.
Imagine you have a deal closing today
in escrow. Your clients have just finished
signing, and documents are on the way
to being recorded with the county. The
hard work on your part should be done.
County recorder’s offices have deadlines for same-day document arrival and
recording, however. A courier delay or an
escrow signing running late could affect
the recording date and closing.
ERecordings are still relatively new
nationwide, but they are expanding and
gaining acceptance rapidly. Although
eRecordings’ benefits are evident, they
do have room for growth.
The technology available for eRecordings is still in its infancy, though new elements are entering the picture. Electronic
signatures, for example, could get rid of
paper documents altogether. Theoretically, your clients could sign their documents from their own home. Imagine if
you could create a set of entirely paperless loan documents. The file could be
closed and funded with a digital paper
trail, rather than a losable file folder.
At the moment, clients often still
must sign hard copies in some instances, such as on the deed of trust.
Some lenders are accepting electronic
signatures for certain documents that
require client acknowledgement only.
The ceiling for this industry is high, and
it will be exciting to see how everything
unfolds in the near future.
As mentioned earlier, not all counties
accept eRecordings. Different states
and counties have different implementation processes, depending on
local rules. With the current state of
the economy, however, government offices are increasingly likely to embrace
any program that can cut costs while
streamlining production.
Look for counties that don’t accept
eRecordings to jump on the bandwagon once they see the cost benefits
of doing so. It won’t be long before
traditional and stressful recording
methods — and mountains of paper —
become obsolete. •
Chris Lodge is the real estate information
manager at the Talon Group NW Division, a
title-and-escrow company based in Bellevue,
Wash. He has been helping real estate professionals build and maintain clientele since
2002. Lodge educates clients on Internet and
social-media marketing, produces real estate
market statistics and analysis, and oversees
special projects. Follow him at www.talonblog.
com and e-mail him at clodge@talonnw.com.
loan transactions requiring title insurance to provide evidence of errors-and-omissions insurance coverage.
An established closing notary most
likely will have met all major title-company notary requirements and already be approved.
«NOTARY continued from page 32
Loan-document knowledge
Confidence helps close loans. When a
notary is confident and competent, it
gives borrowers assurance. And that
makes you look good.
Whether a loan transaction involves
a primary residence, investment property, commercial building or a line of
credit, an above-average understanding of loan documentation and specific
lender requirements is essential.
Certain loan transactions require
certain types of documentation to be
compliant. A good closing notary might
even notice when a document is missing from a loan package and ask about
it in advance. This can help minimize
closing delays.
Having knowledge also means knowing what not to do. For a notary to understand the paperwork is one thing.
To practice law without a license by
offering inappropriate legal advice at
the closing table when not properly licensed to do so is quite another. This
should never be expected or occur under any circumstances.
Regulatory know-how
An understanding of how the Truth in
Lending Act (TILA) regulates loan-document preparation and its execution
is important. A good closing notary
will keep current with changes to all
relevant regulations and how they apply to the signing of loan packages.
Nothing promotes borrower peace
of mind during a signing faster than
a notary who can provide a plain-speak explanation of terms and disclosures at the closing table. The
TILA disclosure, in particular, tends
to confuse many borrowers even
though they have seen it during initial
disclosures.
Every mortgage broker’s goal should
be to fund as many good loans as possible while providing exceptional customer service and offering ethical and
honest advice. Achieving success in
this regard, however, cannot be accomplished alone.
•••
A broker’s loan-making support system
includes many valuable contributors,
and a skilled closing notary is one of
them. Skilled notaries strive to get loan
documents signed properly the first
time, and they achieve that goal based
on their education and experience.
The best notaries also make a point
to meet borrowers on their terms and
willingly travel, as needed. •
The typically long wait for lender
approval, however, often causes
buyers to withdraw their purchase
offers. Short sales can reduce the
negative impact to distressed bor-
rowers’ credit. Lenders may re-
quire short-sellers to repay some
or all of the shortage. Short sales
require an attorney. Because of
the liability and tax issues pres-
ent, short sales should never be
done based solely on the advice of
a real estate agent.
deeds in lieu of foreclosure. 8. These
may be an option if borrowers are
leaving the house for other reasons.
Lenders, however, are reluctant to
accept such deeds if there is any
doubt about intervening liens. A
deed in lieu normally is treated as a
foreclosure in terms of its effect to
borrowers’ credit scores.
foreclosures. 9. This default option
offers some protections. Advisers
must be fully conversant in any
statutory anti-deficiency protec-
tions. Although only available in a
minority of states, these can pre-
vent borrowers from having any li-
ability beyond loss of the property
in foreclosure. From the time of bor-
rowers’ last payment, it generally
will be at least three to four months
before lenders start foreclosure, a
process with timeframes that vary
« OP TIONS continued from page 34
widely by state. Borrowers in foreclosure should set aside at least a
month’s worth of rent each month
to fund a rental when they leave,
and many borrowers can negotiate
a move-out payment — often called
“cash for keys” — when foreclosure
is complete.
litigation. 10. This can be a solution
when other avenues prove inadequate or when significant lender
errors or misconduct are discovered. Brokers can assist attorneys
by reviewing the origination file and
foreclosure documents for defects
that can delay or even defeat the
foreclosure.
Once borrowers’ situations are
evaluated professionally, some options will be eliminated. Borrowers
and their advisers must compare
the remaining options accurately to
determine the best fit based on the
borrowers’ personal and financial
plans. The final choice may be some
combination of the aforementioned
options.
Brokers can be valuable members of
borrowers’ advisory team. Know, however, that many states restrict charging
advance fees for foreclosure assistance. Brokers who don’t work in the
distressed-loan area should at least
maintain general knowledge and develop referral relationships with advisers who can help. •
