The Future of Digital Closings With Marvin Stone
In this episode, Monica and her guest discuss another area of real estate that is adapting during this time of pandemic: the closing process. Many of the recent topics have focused on how to navigate the environment we’re in with social distancing. The online and mobile methods of closing that Marvin talks about today are ready to be put into the mainstream process. Be on the lookout for them and add them to your tool belt!
The closing situation has been shifting for a while, but COVID-19 has forced some changes in terms of where, when, and how closings are happening. Traditionally there have been two primary ways of closing: table closings and escrow closings. Over the past few years, it has gradually moved online. This allows agents, buyers, and sellers to review documents before it’s time to sign them.
Marvin shares the history of online closings; when it first started, there were only about three or four companies doing these transactions. RON (remote online notarization) transactions authenticate the identity of the buyer or seller and the notary. Because of the nuance of lender documents, hybrid transactions have been popular to accommodate signatures and other specifics. Many lenders have their own RON platforms.
With this global pandemic, people were forced to make changes in a short amount of time. The definition of “in-person” had to change so that things like notarization could be done on video instead of face-to-face. Another method is a PRON transaction (paper remote online notarization), which is like a mail-away closing, where they receive and sign the papers on video and send them back to the lender. Marvin shares some different specifics of how these scenarios could play out, especially if the parties are in two different states or one party isn’t technically savvy.
While some of the technical aspects of closing transactions are worked out online, the elements of support and celebration are missing when their REALTOR® can’t be there. Most of the remote platforms allow multiple people to be on, so the agent could “be” there remotely. The convenience of these different transactions (RON, PRON, RIN) will likely carry forward even after emergency orders are lifted.
The title/escrow industry is different all over the country, based on the local practice. RON and PRON have to adapt to the different laws of each state. As an agent, it is good to know what these laws are and what is available for an online closing.
These efforts have come from many different organizations to get new options in motion: NAR, MISMO, and ALTA. This trifecta working together helped to make sure processes were standardized, and all different perspectives and needs were considered and met. Everything is in place, and it’s time to start adopting some of these methods. There is also still the option to have your paper closing.
Marvin shares a quick explanation of title insurance, and why it’s good for clients. It primarily protects homeowners against financial loss, so they get what they pay for. It protects against the unknown. There are many things that are brought together by the title company, and it ends up being a very valuable service.
As an agent, check with your escrow or title professional to see what options are available to help your clients during these changing times. The more you know, the more power you have to help your buyers and sellers.
“It’s really come all the way from having to go somewhere, to now the transaction is sort of coming to you as the buyer, seller, or REALTOR®.” — Marvin
“That’s kind of the trifecta. When you look at MBA, NAR, and ALTA, that’s a lot of people really coming together to make it all work.” — Marvin
“We can keep doing the paper in-house closing as we want to, but we know that this option is available for the client who needs or wants, and we’ll jump in when we need to.” — Monica
About Marvin Stone
Senior Vice President, Business Integration / Innovation Council Leader
Acting as a strategic business partner focused on industry outreach to real estate, mortgage, and title agencies. Leading Stewart’s Innovation Council that is focused on discovering and leveraging technology solutions for strategic business outcomes. Actively involved in ALTA efforts to advance the industry, including the Best Practices Task Force, ALTA Registry Design Group, ALTA Fintech Workgroup, Closing Insight Advisory Board, Signing Professionals Workgroup, MISMO Fee Naming Group, MISMO eClosing workgroup and more. A frequent speaker at real estate, mortgage, and title events, having spoken at ALTA, National Settlement Services, state MBA events, and REALTOR® strategic planning events. I actively discuss and follow numerous innovation topics on Twitter with thought leaders from around the world on topics such as innovation, mortgage technology, real estate/proptech, Fintech, automation, robotics, artificial intelligence, Internet of Things, and more — Follow me on Twitter at Twitter.com/MarvinStone for daily updates.
Prior to joining Stewart, he served as chief information officer for a large, West Coast title agency, as well as holding customer-serving technology positions with other national underwriters. Previous to entering the title industry, Marvin was in a management role for a national mortgage lender.