Paperless mortgage closing saves time and money

While “time is of the essence” often is a critical phrase in real estate transactions, it takes on different connotations for seniors and consumers with disabilities.

Some seniors simply cannot get up and race down to the local escrow office and sign on the dotted line. Often, trips take considerable preparation and a series of events that can swallow an entire afternoon.

And completing needed documents is not always about speed, it’s about the effort needed to physically sign each and every article needed for the package. That’s another reason why title companies and other document originators are so eager about new electronic products on the market that will reduce time, effort and cost to the consumer.

Darren Ross, director of electronic commerce for Stewart Information Services Corp., was instrumental in implementing an electronic notary system for paperless mortgage closings. The electronic notary component is just one part of eClosingRoom, a Web-based paperless closing process molded by Stewart Title. Instead of signing more than a dozen documents, consumers will be able to sign once on an electronic pad – similar to the signature pads used by home-improvement chains – and that signature will be duplicated on all documents. The concept takes “one size fits all” to “one signature fits all.”

“The idea is that one signature will be copied on to all documents needing that signature,” Ross said. “When you think about it, it could relieve a lot of anxiety and stress, especially for seniors.”

Stewart also has incorporated eClosingRoom with SureClose, a transaction management system aimed at real estate salespersons and brokers. The SureClose file becomes an online package for the agent so that the purchase and sale agreement, inspection report, title, credit and other steps can be tracked electronically. Buyers and sellers also could access their online deal and view pages appropriate to their side.

Digital signatures have been around for more than four years. The Electronic Signatures in Global and National Commerce Act went into effect Oct. 1, 2000 and gave electronically signed contracts the same legal weight as contracts written on paper and signed with a pen. Companies have been experimenting and polishing products ever since, in an attempt to provide absolute security and safeguard privacy.

According to Ross, the elimination or significant reduction of paper and paper-based processes enable real estate and title offices to save time and money associated with the physical preparation, handling, printing, storing and archiving, delivery, etc. of real estate closing and loan documents and packages.

“One of the best features of the eClosingRoom is its ability to allow the consumer to e-sign the non-notary-witnessed signature documents prior to the actual closing,” said Ross. “Signing the documents ahead of time reduces the amount of time spent at the closing and the number of documents required to be signed at the closing, saving the consumer time and ultimately increasing the title company’s capacity to handle more closings.”

Seattle-based DocuSign has taken the electronic signature service beyond real estate – to any business requiring a document with a legally binding signature – without the need for an electronic signing pad. The company said it now has more than 700 accounts, ranging from financial services, insurance, real estate, legal, settlement services and communications.

According to Tom Gonzer, DocuSign’s director of marketing, any individual or business can log on to www.docusign.com and establish an account. The sender then prints documents from any Windows application into a DocuSign Envelope, where contents are encrypted and stored on a secured server. The user is prompted how to insert “sign here” and “initial here” tabs at needed spots on each page. Recipients are then invited via email to authenticate and securely review documents, and then sign or initial where indicated.

Each user receives a unique and secure DocuSign Electronic Signature and then clicks to place this signature and initials where required.

“Consumers who simply want to have something signed can set up an account and probably pay less than a fax service,” Gonzer said. “It is a huge help to small businesses or investors sending offers to purchase just about anything.”

DocuSign emails all signers a printed or electronic copy of the completed documents, along with a Certificate of Signing, which outlines the evidence of the signature process. The service includes an “audit control” over the entire process, complete with “time stamping” for all steps and a transaction summary.

An online signature for all family papers? I can already feel the saved energy.

Tom Kelly’s new book, “How a Second Home Can Be Your Best Investment” (McGraw-Hill), written with John Tuccillo, former chief economist for the National Association of Realtors, is available in local bookstores.