Settleware ‘No Brainer’ blog

OK- What is so significant that we should celebrate June 30, 2010? Glad you asked. For the smart, wise guys yes, it is 30 days from today, Memorial Day. We are celebrating today because it is the 10th Anniversary of President Clintons passage of the e-Sign Act. Coincidentally, it is also the day by which Home Buyers must close their purchase in order to claim the federal Home Buyer credit of up to $8,000.
So what’s the connection? Actually, I couldn’t think of a better time to launch our first newsletter or a better time to extol the benefits of e-Signing to potential Home Buyers/Sellers, real estate/mortgage professionals and escrow/settlement closing agents. For those of you that have your contracts in place by the required April, 30, 2010 you will probably be most interested but a lesson can be learned by all. As you may know, I have been licensed real estate professional on both coasts for over 30 years as well as spending almost 10 years on the escrow/closing side of the business. I, as all seasoned real estate/mortgage and escrow/settlement professionals, have seen our fair share of missteps that can happen on the road to closing. It is not uncommon for some type of delay to pop up at the last minute causing the closing date to change or the deal falling out all together.
“Okay- I get that but, again, what is this have to do with e-Signatures and June 30th tax credit?” I’ll explain-more than 50% of all delayed closings are due to the fact that most paperwork is not complete-missing signatures, initials, document/pages, etc-starting to get the picture? The essence of the US e-Sign Act is that by affixing an electronic signature to a contract will have the same effect and legal standing as a ‘wet-signed’ original. So, your Home buyer is trying to close by June 30th and completes all the required paperwork, signatures et al and submits to closing agent. The real estate checks in with closing agent to find out about the closing only to discover that the escrow officer either did not receive the paperwork, it is not completed, initials are missing on page 17 or perhaps the entire set of documents were misplaced or misfiled. Regardless, you know the drill, “sorry but until we have the required compliant docs in place we can’t close-but good news we can try to close before the July 4th holiday.” “Oh No” says the Buyer “but I will lose my $8,000 tax credit.” (You know I can’t print what they actually said) Of course, it could be even worse if the Seller turns around and says “ Too bad you missed your closing date, we will be keeping your deposit and selling it to the back-up offer at a much higher price”-eeks!!
A long drawn out scenario ( but all too real) to highlight how the simple usage of secure workflow enhanced by e-Signatures would have prevented if only the agents, lenders and closing agents were on board with and abiding to the spirit of the e-Sign Act. The compliance, transparency and intelligence around the electronic documents would have prevented this serious damage/injury if all the above named ‘professionals’ kept up with ‘relevant’ technological advances.
When you send a consumer/signer documents through our secure platform ALL mandatory fields (signatures, initials, etc) would be required BEFORE a allowing a person to sign and return docs to the Submitter. A friendly reminder is displayed informing Signer that they ‘forgot’ to enter their initials on page 17. Buyer never needs to panic to have these docs signed, find a fax machine or scanner or worst yet, to have to run to some expensive overnight carrier by 5 pm so Submitter will receive next day in time for closing. Signers can easily sign their compliant docs in real-time , from anywhere-even on their mobile phone as they are trying to board the airplane-and Submitter will have legally binding docs in less than 5 minutes.
Ten years ago we said “wouldn’t it be terrific if we could remove all the ‘friction’ and most of the stress out this type of transaction?” Today, we have collaborated in Industry experts and Pioneers and been certified by County Recorders, Secretaries of State, Fannie Mae, MERS e-Registry, Wells Fargo, FHA, etc.
So why aren’t all the real estate/mortgage and closing agents on board? Good question – I bet your Buyer is looking for the answer as well!
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