Settleware ‘No Brainer’ blog

Thinking about adding secure and efficient e-Signatures to your current
workflow? Well, quite bluntly, not all vendors offering e-Sign solutions are
the same. Just this week we heard of a REALTOR® that ‘grabbed’ an tablet e-Sign
app off the Internet and actually used this tool on a real estate transaction. When asked about levels of security, tamper evident audit trails, non-repudiation and lenders, Fannie Mae, County Recorders acceptance, etc., blank stare – huh?

As electronic and digital signatures affixed to contracts and agreements continue to gain adoption, seems like everyone is now  jumping on the bandwagon. We also read where a Mortgage vendor,  now claiming expertise, is offering this solution for Free, huh? Same compliance questions – who has certified or willing to accept these as binding?

When it comes to Real Estate and Mortgages, our 30 year old domain experience has advanced our vision for a complete digital, electronic and paperless real estate and mortgage transaction over the Internet. Having collaborated with Industry experts and pioneers for complete ‘buy-in’ we now enjoy at least a 4-5 year head start  and provide the Industry’s  ‘Holy Grail’ - a pure electronic end-to-end solution – from opening to closing (and beyond).

In another example, the real estate promissory note is probably the highest liability document any consumer will ever sign (representing the asset and in some residential markets that could translate to a $ 10 million or more risk) yet many so called e-Signed experts have not even approached, no less been certified by, the required compliance agencies, huh?

Not all e-Sign vendors are alike – ask the questions.

After more than a decade of the passage of the e-Sign Act we’re pleased to announce that the Escrow/Settlement Industry is poised to adopt electronic signature technology into their paper intensive processes. In our recent Escrow Survey an overwhelming majority of respondents (67%) stated that they would be adding e-Signatures to their escrow workflow, contracts and agreements within the next 12 months.

Seems like the rapid acceptance and adoption of electronic signatures by real estate agents, buyers and sellers may be the primary cause for this recent change of priorities. Escrow officers and settlement/closing agents generally carry out the instructions from the principal parties and are not particularly known to be ‘early adopters’. Buyers/Sellers/Borrowers, who are becoming more comfortable with e-Signing upfront purchase and counter offers, instructions and agreements, will now be able to complete their transaction over the Internet (anytime, anyplace-even at the airport on their mobile phone) removing most, if not all, the friction associated with current paper-based processes. No paper, no faxing, no scanning, no expensive overnight FedEx or UPS shipping charges and most importantly, no more chasing down missing documents, pages or signatures!
Removing the stress for all parties, especially the overworked escrow officers and closing agents, will be very much appreciated!

It all started with a vision to ‘streamline the escrow process, both real and personal property’ and as we celebrate our 10th Anniversary I thought it might be a refresher to define the exact purpose of Escrow.  Escrow is sometimes known in other parts of the US as Closing, Settlement, etc and the information presented here was taken from a pamphlet prepared by the Escrow Institute of California to be handed out by escrow companies to their clients. We decided to present it pretty much as written because escrow companies very rarely get to explain what goes on in escrow in their own words. Usually your lender or Realtor explains the function of escrow to you:

Prepared by the Escrow Institute of California

Escrow: What is it?

Very simply defined, an escrow is a deposit of funds, a deed or other instrument by one party for the delivery to another party upon completion of a particular condition or event. The California Escrow Law: Section 17003 of the Financial Code: provides the legal definition.

Why Do I Need an Escrow?

Whether you are the buyer, seller, lender or borrower, you want the assurance that no funds or property will change hands until ALL of the instructions in the transaction have been followed. The escrow holder has the obligation to safeguard the funds and/or documents while they are in the possession of the escrow holder, and to disburse funds and/or convey title only when all provisions of the escrow have been complied with.

Escrow: How Does it Work?

The principals to the escrow: buyer, seller, lender, And borrower: cause escrow instructions, most usually in writing, to be created, signed and delivered to the escrow officer. If a broker is involved, he will normally provide the escrow officer with the information necessary for the preparation of your escrow instructions and documents.

The escrow officer will process the escrow, in accordance with the escrow instructions, and when all conditions required in the escrow can be met or achieved, the escrow will be “closed.” Each escrow, although following a similar pattern, will be different in some respects, as it deals with your property and the transaction at hand.

The duties of an escrow holder include; following the instructions given by the principals and parties to the transaction in a timely manner; handling the funds and/or documents in accordance with the instruction; paying all bills as authorized; responding to authorized requests from the principals; closing the escrow only when all terms funds in accordance with instructions and provide an accounting for same: the Closing or Settlement Statement.

Over the past several years we have provided electronic escrow and e=Closing services and will continue to assist moving the Industry towards a complete electronic and paperless Real Estate escrow transactions – from Opening through Closing. We applaud our ‘early adapters’ customers for sharing our vision!