E-Closings, Mail Away Closings, Virtual Closings, oh my!
Mail away closings, remote closings, virtual closings, e-closings…what's the difference? We're here to shed some light on what each option entails and what it means for you and your clients.
But first, a little backstory: North Carolina passed some legislation to allow for Remote Notarization in the beginning of the COVID pandemic. This allowed for notarizations to occur over video platform; where signors would sign physical documents, electronically send documents to the notary, and then receive notarized copies back from the notary via electronic means. You can read more about this here: https://www.sosnc.gov/imaging/dime/webportal/56488160.pdf.
Since then, that emergency legislation expired on December 31, 2021. This means that notarization must occur face to face. It's hard to say whether North Carolina will allow for Remote Online Notarization (RON) in the days to come. Prior to the pandemic, it was generally thought RON in NC was not likely anytime soon … and even during the pandemic, it was difficult to practically accomplish, as lenders and investors were hesitant to accept notarization under the emergency statute.
How does a remote/mail-away closing work?
Still, we have some excellent options to facilitate closings for buyers that are not physically here. Mail away closings, also called remote closings, allow clients the flexibility of signing and notarizing the settlement documents at a location outside the attorney's office. This is incredibly helpful for folks that have restrictive work schedules, family members with exceptional care needs, or relocation clients! In this case, there are 3 steps to complete the closing:
First, our office obtains the settlement documents from the lender several days in advance of the closing. We print and annotate the closing package with sticky flags to clearly mark signing/notarization portions and overnight the package to the buyers or prepare for pickup if there is a local courier. We include a return FedEx label and instructions in our package.
Next, the real estate agent or buyer arranges for a mobile notary to meet them at a specified location to sign settlement documents on the date of closing or arranges for the buyers to take the documents to their bank/USPS/FedEx store (which often have a notary on-site). It is important to note here that the buyers cannot pre- or post- date documents. Our office provides a secure virtual connection for the buyers throughout their closing time/date so the buyers can consult with our attorney and staff about the closing process and documents. This allows us to conduct the closing with the same thoroughness and explanation as a closing completed in person!
After the closing has been completed and documents have been executed/notarized, they are overnighted or delivered back to our office, and we record the deed and disburse the loan! In mail away cases that are not local (ie: another state), this step often happens the following day when we receive documents via FedEx.
To disburse the funds for a settlement, we must be in receipt of the original signed documents. This is non-negotiable. Due to lender policies, title insurance company policies, and personal liability policies, we must certify the condition of the original documents.
Then what is a virtual/e-closing?
A second type of closing is often called an e-closing, hybrid closing, or virtual closing. This closing often still takes place in the settlement agent's office. Many of the documents required by the lender for closing are sent to us or the buyer-client via an electronic portal for e-signature (ie: disclosures, loan applications, and amortization schedules). Then, the few documents that MUST be wet-signed and notarized (ie: the Deed of Trust, the Closing Disclosure, and any affidavits) are then signed with the attorney in-person and sent to the lender.
We hope that soon fully electronic mortgages will be more common in North Carolina. Certainly, we have been working with lenders and banks as the foundation is laid for closings that are more convenient and efficient for our clients.
Special Considerations
All closings that take place in a non-traditional location require plenty of planning and advance notice for all parties involved: lenders, attorneys, real estate agents, buyers, and sellers. The process requires additional preparation by the attorney's office to ensure documents are prepared and sent on time, and that buyers/agents have clear instructions to complete the documents appropriately, since a mistake can take several days and entirely new document sets to fix!
If you have more questions about out-of-office closings, please contact our office so we can help!
Happy closing!
