Data Facts Lending Solutions Blog

The Advantages of E-Closings

by Jennifer Hamby

Sep 18, 2015 8:00:00 AM

e-signature

E-Signatures simplify and expedite transactions, making it easier, faster, and cheaper for buyers, sellers and borrowers to conduct business. What used to take days and weeks can now be accomplished in as little as 15 minutes.  The The E-Sign Act  was passed in 2000, so why has it taken so long for our industry to see the benefits for buyers, sellers, and borrowers?

Advantages of E-Closings

More Time to Review
All the parties involved in the transaction will see the documentation well before closing, so there will be plenty of time to review, ask questions and understand what you're signing.
Faster & More Efficient
Lenders can fund loans faster and catch and correct errors, such as a misspelled names, instantly. There will be no need for rush deliveries and courier services to get the revised documents signed, re-signed and delivered. As a result, the closing times and the costs involved are substantially reduced.
Eliminates Paperwork
Paperwork that sellers, buyers, and borrowers often receive at closing will be available electronically. You will be able to easily store, access and review these documents at your leisure, and will also be able to email these documents to another party to review.
Integrates Information
Borrowers can click on a link in the e-closing portal to learn more about their mortgage loan or the interest rate without the need to contact the lender. You can also see what stage your loan process is in as well. You will have the ability to review disclosure documents more easily by using tools to understand the mortgage and real estate terms mentioned within these documents.
Greater Protection
Lenders will have easy access to a trail of dated and time-stamped disclosures. They will be able to show when borrowers viewed and e-signed specific documents, while safeguarding them from the liability and costs of data and disclosure errors.
Eliminates Storage
Buyers, sellers and borrowers can receive their documents on a CD or Flash Drive. This reduces the chances of a document being separated from the pack or lost through the passage of time. In addition, lenders and real estate companies will be able to digitally store these documents safely, without the need to pay for expensive storage space in an office or warehouse. 

In 2014, the CFPB began a study that aligned with the  Know Before You Owe initiative to monitor the advantages and benefits of electronic closings and how the early review would impact the consumer’s overall closing process experience.  The results are in, and in general they found that e-closings provided  better consumer understanding, a more efficient process, and an overall greater feeling of empowerment,  than closings with traditional paper documents.

 “While technology alone will not address all consumer concerns in the closing process, our study showed that eClosings do offer the potential to make the process less complex,” said CFPB Director Richard Cordray.  “We expect this pilot project and its findings to help inform further innovation that will be a win-win for consumers and industry alike.”

Check here for the full CFPB study results

Topics: Mortgage compliance, CFPB, Mortgage Lending, TRID, Know Before You Owe, E-Closing, E-Signatures

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