Clint Salisbury: The RON Revelation–Why a Return to Normal Shouldn’t Mean a Return to the Status Quo
Clint Salisbury is Regional Manager with IDS, Salt Lake City, Utah. Since joining IDS in 2008, he has served as In-house Counsel and Director of Implementation Services.
Before 2020, “home is where the heart is” was a cute saying often seen cross-stitched on throw pillows, but for many people these days, home is where everything is. While many are looking forward to a return to the office, restaurants, air travel and more, there are some things that many would like to keep at home. One example is the ease in which many were able to complete their mortgage closing through the use of eClose technology and remote online notarization (RON).
Traditionally, a mortgage closing meant wet-signing so many documents that a hand cramp was inevitable. Additionally, the closing ceremony takes place in a settlement agent’s office, often requiring the borrower to take multiple hours off work and all parties to travel to a central location. With the introduction of hybrid eClose, borrowers are able to eSign some documents prior to the closing ceremony, saving both time and hands at the closing table, as well as avoiding signing mistakes. While hybrid eClose covers a multitude of scenarios, there is still a high probability that the borrower will end up in a settlement agent’s office at some point during the closing ceremony, but for a much shorter time.
With recent events leading to a massive increase in the use of RON, borrowers have seen they can close on their mortgage from the convenience of their kitchen table, and they’re wondering why that can’t always be the case. After all, if borrowers can get their work done from home, they expect their lender can as well. While lenders may be headed back to the office, the past year has shown they possess the capability to perform eClosings and utilize RON technology; the key in moving forward with this technology is to create integrations and a tech stack for ultimate optimization.
By integrating RON with existing document preparation and eClosing technology, lenders can increase efficiency in the loan process by allowing lenders to facilitate a complete digital closing through a single platform. Additionally, a single platform will only require parties to login once, rather than juggle several logins during the closing ceremony. Settlement agents will also benefit from a single login portal as well as a centralized workspace from which to generate, view, assign and eSign documents.
Notaries and borrowers are also able to meet remotely to complete the closing transaction by eSigning and eStamping closing documents, as permitted on a state-by-state basis. eClosing integrations have the added benefit of providing the lender the ability to pare down the closing process from fully digital to hybrid to fit the comfort level of the borrower. While nearly every state without RON legislation issued an emergency order or guidance in 2020, 33 states[1] currently have enacted permanent legislation. Additionally, the American Land Title Association and the Mortgage Bankers Association supported introduction of the Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act of 2020, which has been reintroduced in Congress to provide nationwide RON authorization. In 2021, MBA has also continued to work with ALTA to promote both state and federal RON legislation.
It’s often been said that the advancement of the fully digital mortgage is going to be driven by the needs of the borrower. And yet, borrowers have not been knocking down lenders’ doors insisting upon an eNote because the average borrower isn’t aware of its existence. When it comes to RON and eClosings, that is changing. In 2020, the need to remotely conduct a closing ceremony became a necessity, and RON became a general news topic. Home may not be where everything is for much longer, but as people continue to embrace the convenience of doing certain tasks from home, lenders should take note. Borrowers are going to start looking for lenders whose level of digital sophistication meets their needs, and lenders should be ready to rise to the occasion.
(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at msorohan@mba.org; or Michael Tucker, editorial manager, at mtucker@mba.org.)
