Automation & Technology
eClosing, eMortgage, and eRecording: Your guide in a nutshell
eClosing, eMortgage, eRecording - Oh my!
If you find yourself scratching your head or having to do a quick Google search on the fly whenever you hear a new “e” term pop up in conversation, you’re not alone. Staying up-to-speed on all the latest digital mortgage terminology isn’t easy, but if the past two years have taught us anything, it’s that “e” is where we want to be.
This is especially true because the ability to do business and thrive remotely is no longer a goal for mortgage companies to work towards, it’s a necessary business plan for success in today’s marketplace. So, let’s break things down and get all caught up together on the latest “e” vocabulary that you should have in your back pocket. And don’t forget to bookmark this page so you can refer back to this article as a trusty cheat sheet.
What is an eClosing?
An eClosing takes place when one or more required closing documents are accessed, presented, signed, and submitted in a secure, electronic environment.
Within the broader scope of eClosing, we also have hybrid eClosings and full eClosings. A hybrid eClosing means that a portion of the closing process is completed electronically, while other components are completed physically, or with pen-to-paper. A full eClosing is when all the closing documents are signed, completed, and submitted electronically. In a full eClosing, there is no need for the borrower to meet in person with a notary and sign paper documents.
What’s important to note is that in specific cases and locations, though many closing documents can be digitally signed (eSigned), some still require traditional in-person signing. This is because local agencies and investors must also have the resources and technology in place to accept eSigned documents in order for a lender to complete a full eClosing.
What is an eMortgage?
An eMortgage is a mortgage loan where the closing documents, including the eNote, are digitally created, accessed, presented, executed, transferred, and stored electronically through an eClosing process. An eNote is an electronic version of a promissory note that details the loan terms. An eNote is securely stored in a digital vault that meets the requirements of eSignature laws, referred to as an eVault, or an electronic note vault.
What is an eRecording?
eRecording is the process of submitting documents for recording online, and having them reviewed and recorded by the county, who then returns the approved, recorded documents to the submitter electronically.
What are the key benefits of eClosings, eMortgages, and eRecordings?
In a nutshell, implementing a digital closing solution can lead to:
• Time and cost-savings for both the borrower and lender due to the elimination of paper and quicker turn times.
• An improved borrower experience due to a faster, more efficient, and convenient process.
• Better security and less risk for errors, so the chances of having to go back and make corrections are minimal.
We hope this article helped simplify and connect some of the “e” dots. Stay tuned for more informative articles like this in the future, and to learn more about what you can do to take your digital closing strategy from the planning stage to execution, reach out to an ICE Mortgage Technology expert today.