North Carolina institutes eClosing pilot
North Carolina Secretary of State Elaine Marshall wants the state to be a leader in eCommerce. It adopted the Uniform Electronic Transactions Act, the Uniform Real Property Electronic Recording Act and the Electronic Notarizations Act. All of this was to prepare for the day when the state could institute eClosings.
“We have been working diligently over the past 15 years to build the infrastructure to build electronic commerce,” Director of Electronic Notarization and Notary Enforcement Ozie Stallworth said. “We thought it was a prime time for North Carolina to step forward and lead in this space because we have the legal infrastructure in place to support a full end-to-end eClosing. We looked to our state’s lending institutions to see whether or not they understood and believed that the industry was headed down the road towards eClosings.”
Stallworth determined the financial institutions were eager to move forward. North State Bank Mortgage President J. Kenneth Sykes agreed and said the state’s efforts are cutting edge.
“We believe that eClosings will enhance the customer experience and provide a more secure method of mortgage loan closings,” Sykes said.
Invitations were set out to financial institutions, title agents and technology providers asking them to participate in the pilot. Together the participants began educating each other on what was possible, potential barriers and what the eClosing transaction would look like.
“What we are trying to accomplish through this pilot is the full end-to-end electronic process,” Stallworth said. “Not the hybrid version. We encourage all forms of electronic commerce, whether it’s hybrid or not, but this pilot is focused on incorporating in-person electronic notarization so that the entire process from start to finish can be completely electronic without any paper in the process at all.”
DocMagic Director of eServices Tim Anderson said this pilot is unique because it is one of the first to be officially sponsored by the state.
“This will be a full paperless eClosing, including eNotary and both title and lender documents,” Anderson said. “We not only see this as providing a better consumer education and experience, but for the lenders selling the loan to investors to eliminate the post-closing issues, and if you can do that, investors can fund the loan with certainty and avoid any post-closing trailing doc issues that may hold up funding the loan. Everyone wins.”
eOriginal General Manager of Digital Mortgage Simon Moir agreed. He said the pilot offers an opportunity to bring all the players together in one place to remove the barriers — both real and perceived.
Potential barriers include jurisdictions that aren’t eRecording or still keep all files on paper. Sykes said with any major change of format within the lending industry caution is expected. But Stallworth said there hasn’t been any push back so far.
“The active participants in the pilot are reaching out individually and collectively to various stakeholder groups such as the Realtor association and the State Bar, the Bar association, the bankers association and others, to make sure they are aware and informed of this transformative effort. It is important to have the input of all the stakeholders to ensure that eClosing in North Carolina will be a benefit to all in the state and to the consumers in particular.,” Stallworth said. “We anticipate hearing more of those voices.
“Secretary Marshall has long stressed the importance of making technological advances to ensure that those doing business in North Carolina would be able to compete at the highest levels in an increasingly global marketplace. This eClosing pilot program is the fruition of the many years of working to construct the statutory framework to support electronic commerce and will potentially be a model for other states to follow.”