Electronic processes are poised to make homebuying easier on the wallet — and on trees.
When Charles Schaffner of West Haven, Utah, closed on a home recently, he didn't leave with a giant stack of paperwork. Instead, he left with a CD containing electronic versions of all closing documents.The closing took less than 20 minutes, and yet Schaffner knew exactly what he was signing; he'd reviewed all of the documents at home the night before.
Schaffner got his loan through Mountain America Credit Union, which is one of the first banks in the country to roll out an electronic-closing option. Encompassing home contracts, closings and loans, electronic processes are saving time and money. (Bing: Paperless real-estate transactions)
Schaffner says his experience with electronic closing was a far cry from previous closings.
"In the five closings that I've been involved in in the past, people are just telling you the short version of what (the documents) are, you sign off, and you go on to the next one and you don't have any knowledge or recollection of what it was about," Schaffner says.
This time, Schaffner didn't sign a single piece of paper. He signed his name once on a signature pad, then applied that signature electronically in every place it was needed. No hand cramping or shoddy, hurried signatures.
"This was a very pleasant change," he says. "It was interesting using new technology."
MACU's e-closing product is called QuickClose, and it uses eClosingRoom technology from PropertyInfo, a division of Stewart Title Co. Stewart's business-development director, Nancy Pratt, says e-closing is being embraced by consumers, who are already comfortable with signing a signature pad when they make purchases at stores.
She also says older buyers aren't intimidated by the technology. In fact, they appreciate being able to sign once and be done.
"So many people say they are uncomfortable with the way their signature looks after signing it 80 times," she says.
Benefits of e-closings
Of course, a good-looking signature isn't the only perk of an e-closing. The process saves time, money — and reams of paper. According to data from Stewart, 460 pieces of paper are used in the typical pen-and-ink closing.
Lenders save money because they save time. In the paper world, an escrow company employee is responsible for shipping loan documents in a specific order to the lender and investor. The documents usually number between 70 and 100. The "shipper" may be busy, and the loan may sit for days before documents are sent. With e-closing, the file is shipped within minutes of closing.
The lender may eventually pass savings on to you. "Eventually you'll see those lenders that do business this way have a little better pricing," Pratt says.
Then there's security.
Paul Anselmo, CEO of SigniaDocs, another provider of technology that allows for a paperless mortgage process, says the method ensures compliance with new mortgage regulations. An electronic, tamper-proof seal means there is never a question of who signed what when.
"The electronic version can track what was disclosed, use a date and time stamp and authenticate the IP address used," he says. "It would eliminate the finger-pointing you have going on now. The paper files are such a mess."
Pratt says it's also easy to misplace a piece of paper, which could delay any step of the process. "Many times, a title company has to go back to a borrower and ask (the borrower) to re-execute a document after the fact," she says. "That goes away in the electronic world."
