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The Shifts in Digital Closings

digital lendingThe real estate industry has been talking about fully digital closings for years. Many believe it’s a necessity to satisfy the evolving demands and expectations of today’s clients. People now shop online for loans and may have a hybrid live/digital closing, in which some parts of the transaction are digital but in most cases, documents are still signed with a physical pen in front of an in-person notary.

There have been numerous obstacles blocking progress towards a full digital closing including disparate systems across parts of the closing that could not integrate with each other, industry readiness and a wide variety of once well-crafted regulations that now underrepresent what modern technology can support and serve.

For real estate professionals, it can be confusing to change existing, older processes that have been relied on for years, no matter how much frustration they continue to cause. However, consumer expectations and technical literacy are driving change and it’s key that professionals prepare for the shift. The industry will quickly go from the change to digital closings being an option, to it being a necessity to remain competitive with your peers.

Technology innovation that would enable a fully digital closing is accelerating unlike any time in the past few decades. The regulations that would allow fully digital closings are not all there yet, but there are many aspects of the closing process that are in fact ready to go online. Even in states where pen and ink are still required, for instance, it is not too soon to prepare for the inevitable shift to how closings will work in the not so distant future. There are two key things that you can do today to prepare:

  • Evaluate the software you use: This is one of the most important decisions that you as a lender or title agent can make for your business. Your software should increase business opportunity, decrease roadblocks and communication inefficiencies, and prepare your company for fully digital closings.
  • Work with title companies that are forward thinking: You need to be able to place orders quickly with your title company and efficiently collaborate. You want the capability to send an approved loan application to your title company without having to make any phone calls. While the technology is imperative, it is equally important to work with a title company that maintains a commitment to premier customer experience. Using a system like Encompass facilitates both finding title companies and using one origination software to place a title order.

Our current reality is a hybrid electronic and physical closing world but we are quickly moving toward an electronic one. Consumer technology is leading the change and more companies are realizing this and making the investment in better client experiences through technology. Taking this step will not only prepare you for the future but is now necessary for sustainable success.

Once you have made the investment in technology and change management, the regulations must also be in place. You can stay up to do date on these changes by reading industry publications such as MReport and following your state’s legislative process.

While fully digital closings are going to happen at some point in the future, the changes you make to your business today can help you both be prepared for that change as well as improve the customer experience along the way.

About Author: Charlotte Brown

As the head of product expansion and compliance for Qualia, Charlotte Brown is responsible for regionalizing the company's title and closing software platform nationwide for various regulatory and practice environments. During the past year, Brown has led efforts to expand Qualia’s service offering from three states to nationwide, across more than half a dozen underwriters. She has built a team that has helped accelerate her efforts to add thousands of region-specific documents and has been pivotal in enabling Qualia to support title companies working on anywhere from two to 2,000 closings per month.

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