Over the past few weeks the real estate industry has adapted swiftly to limitations and roadblocks spurred by COVID-19. The typical coordination required to complete a closing has amplified tenfold and now more than ever, the industry is relying on strong partnerships and communication to keep the market moving.
Qualia’s Director of Business Development, Max Lamb, joined Proglogix’s Digital Content Manager, Amanda Farrell on a PropLogix Town Hall Webinar to discuss how title & escrow businesses can work with their county recorder offices, lenders, and underwriters during this unprecedented time.
Adapting to county recorder office limitations
Last week the US Department of Homeland Security updated its guidelines on “essential businesses” during the COVID-19 outbreak to include county recorder offices. “Now it’s up to the states and local governments to make a decision about whether to reopen their county recorder offices,” Lamb noted.
In many cases, county recorder offices are reopening; however, there are still some severe cases where county recorders have completely shut down and not reopened. Lamb delivered a few tips for managing closings when offices are completely shut down:
- Stay up to date with your county recorder office’s changes. “Things are changing by the hour,” Lamb noted. Businesses can stay up-to-date by using ALTA’s county closing tracker or visiting their county recorder’s website directly. Additionally, county recorder offices are responding quickly to the need for e-recording, so Lamb encourages title & escrow businesses to check in frequently with their county recorder offices on e-recording availability.
- Put together a letter with your state land title association. Use the letter as an opportunity to emphasize the importance of the county recorder and the fact that your request is not a personal need but a collective need.
- Set expectations with your clients. When a county recorder office is closed, closings will be impacted not just from the inability to record, but also sometimes from an inability to perform title searches. Additionally, in cases where county recorder offices are accepting e-recording, there may be delays depending on how quickly the counties are getting through e-recording backlogs.
- Consider leveraging a title plant. In instances where title searches are impacted by county recorder office closures, Lamb recommends that title & escrow businesses look into title plants. “If they have good coverage in the counties you work in, title plants can be a good tool to get title searches you would typically receive from the recorder’s office,” he noted.
Working with underwriters to develop county recorder closure contingency plans
During these uncertain times, underwriter relationships are more important than ever. Underwriters are developing workarounds and focusing on the most severe cases when county recorder offices are not accepting recordings at all. According to Lamb, underwriters have been issuing gap indemnification agreements, using emergency COVID-19 affidavits for sellers, or adding exceptions to policies as temporary solutions.
Lamb noted that some lenders have concerns with gap indemnification agreements, affidavits, and exceptions and many are not accepting these measures. “If a lender is concerned about an action you’re taking, definitely loop your underwriter into the conversation and work with them to find a solution with your lender,” he said.
Working with lenders to accelerate Remote Online Notarization (RON) eClosings
Lamb noted that the industry is currently “rallying around RON” in response to COVID-19; however, lender adoption is still quite low. Many lenders have not yet made the technology push necessary for RON eClosings—specifically the tools needed for eNotes.
While eNote adoption has been slow among lenders over the past few years, there are a few indicators that the process will speed up in the months ahead as guidelines and regulations shift to promote RON. Recently, the GSEs announced modifications to single family selling guides which include relaxed requirements for RON. Fannie Mae provided a list of more than 40 states where lenders may sell loans closed with RON.
“If you’re ready to go with RON, ask your lender if they can provide eNotes and if they have a particular RON platform they like to use,” Lamb suggested as a first step. If the answer is no, Lamb suggested title & escrow businesses offer to provide the RON platform for eNote signage and help their lenders look into eNote solutions.
Working with lenders who cannot move forward with RON eClosings during COVID-19
If RON eClosings are not an option for the foreseeable future, there are still ways to minimize in-person contact during closings. Lamb recommended a few solutions including:
- Sign seller-side documents through the title or escrow company’s RON platform. While the buyer-side documents may not be able to be remotely signed and notarized, this allows sellers to avoid the in-person signing.
- Complete non-notarized buyer documents with an e-signature tool. This allows parties to sign documents ahead of the closing and reduce the number of documents that need signing in-person.
- Use core software tools to collect information (to reduce in-person information collection). Qualia users can use Qualia Connect to interact digitally with all transaction parties and collect information ahead of closing. This enables title companies to confirm personal information ahead of the closing. Qualia users can also use eSign by Qualia to sign all non-notarized documents prior to closing. Lastly, on most title software, users can export documents and import them into their RON system.
Lamb noted that although many lenders may not currently be adopting RON capabilities, they may soon change their course in response to COVID-19. “Remember to keep lenders up to date on capabilities that you have so when their policies change with the current market dynamics they think of you,” he said.
Overall, Lamb and Farrell agreed that now is the time for real estate transaction parties to leverage their strong relationships and be in constant communication with one another. “This is a time when land title association memberships and relationships with peers and colleagues really come in handy,” Lamb noted. “A lot of things are being handled on a case-by-case basis, so it’s ok to not have all the answers and to ask for help.”
To hear more from Lamb and Farrell about county recorder office closures, RON, and other ways COVID-19 is impacting real estate transactions, stream the webinar now by clicking below.