COVID-19 and Social Distancing Protocols Affect Mortgage Industry
COVID-19 and social distancing protocols are presenting new challenges for us all. The real estate and mortgage industry is no exception. These challenges are impacting lenders, borrowers, and service providers, such as title agents and closing attorneys, for purchase and refinance transactions alike.
One challenge presented is the execution of closing documentation. This includes transfer and mortgage documents. Most in the industry are trying to maintain their closing schedule and are beginning to close transactions using alternatives to in-person closings. Some are using electronic signature technology for execution of all closing documentation, and others are electing a hybrid approach where most documents are electronically signed and only a handful of documents, such as deeds and security instruments, are mailed out to the consumer for a wet signature.
This will prove more difficult, however, in the case of documents needing notarization and a borrower’s ability to access a notary in the immediate future.
The next hurdle in the process is recording of deeds and security instruments, as many county offices begin to limit access or completely close down for a period of time, or indefinitely.
Many counties across the country are equipped to accept electronic recording of documents, and there are technology solutions that will enable the industry to take advantage of this service immediately. This is true for either electronically signed or wet signed and scanned documents. For those localities that accept electronic recordings, even in the case of a closed government office, the electronically recorded document will be date and time stamped.
The gap period between recording and public posting will grow until the government offices re-open and staff has time to post all electronically recorded documents during the closure, but the recordings will be valid. Not all counties across the country accept electronic recording, however, so the industry will likely face immediate disruptions in business in those areas.
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This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.