May 16, 2020
To Our Valued Clients, Longtime Friends, & Colleagues,
We hope that this note finds you and your family safe and healthy.
It has been several weeks since our last update and we see that as an indication that in the real estate world at least, things have stabilized considerably. Since mid to late March, we have gone from wondering if our business would be permitted to function, to operating on just about all cylinders.
While each day we come closer to returning to our normal level of closing efficiency, like many of our colleagues and competitors, it has certainly been a challenge. However, we are happy to report that despite slower turn times for a few weeks when things were very uncertain, for all intents and purposes, working with Kriss Law/Atlantic today is very close to business as usual.
In navigating around the many roadblocks that we have encountered in the past couple of months, a handful of the same issues and specific questions have come up over and over again. We would like to take this opportunity to address these items with the hope of providing some clarity to our Realtor and lender partners. While lengthy, we ask that you read the text below in its entirety as we believe that being knowledgeable on these points will make you more of an asset to your clients:
Out of all of the questions related to closings and COVID-19, this is the area where the most confusion seems to exists. While all of us would love to be able to conduct closings 100% electronically, the reality is that in most states, and especially on the east coast where our corporate headquarters is located, full E-Closings are not permitted and the portions that can be completed online make transactions more complicated and cumbersome than necessary.
As it is the most stringent in the country, we will use the temporary E-Notarization Order in Massachusetts as an example.
The Massachusetts Order requires buyers/borrowers to wet sign documents on a live Zoom (or similar platform) conference, while sitting in the Commonwealth, with a Massachusetts attorney who also must physically be within the borders of the State. Once the original wet signed documents are returned to the law firm/title company, the same attorney must video conference with the clients a second time while stamping said documents.
A standard lender closing package is approximately 200 pages and must be printed using a mix of legal and letter sized paper. We have found that over 95% of our clientele does not have the ability to print at this volume and with differing sizing.
Even in the cases where clients have the requisite printing capabilities and have attempted to print at home, many errors resulting in the need for the closing to be re-consumated have occurred.
If the clients are unable to print, this leaves the option of sending the documents to the consumer via overnight courier. Unfortunately, and as to be expected in the current climate, most lenders are not able to send the package in time for the law firm or title company to properly prepare the documents and get them out to the customer the day before the scheduled signing. If the customer is not in possession of the documents on the day specified for the closing, a dating issue arises and the closing has to be rescheduled.
As you can see, the temporary Orders in States like Massachusetts, while in the right spirit, present significant logistical challenges.
Since the beginning of the outbreak, in jurisdictions where RON (Remote Online Notarization) ability is limited, we at Kriss Law/Atlantic have conducted thousands of closings in a safe and successful manner with very limited use of E-Notarization. As detailed in several of our earlier updates, we have procedures in place that protect the consumer and our representatives alike and will gladly provide those guidelines once again upon request.
While the E-Notarization Orders in States like Massachusetts, Connecticut and New Jersey make transactions in which buyer/borrower is obtaining mortgage financing more difficult, clients can benefit from applying the limited E-Notarization when involved in other types of transactions.
In scenarios where a small number of documents need to be printed, like when a consumer is buying a property with cash, selling, or needs a Power of Attorney notarized, the temporary Orders are very useful.
Finally, in cases where there is known COVID-19 exposure, a borrower has tested positive for the virus, or other extenuating circumstances are involved, we have invoked the use of the temporary Orders. In these scenarios, our representative has often dropped the documents at the client's home, reviewed the package via video conference from his or her car nearby, and picked up the documents outside once signed.
With all of this said, in states where more complete RON's are allowed, we are conducting settlements in that manner with great success. In the states primarily on the east coast where minimal E-Notarization is permitted, we hope we have made it clear that we are and will continue to get transactions closed effectively with or without the use of an online component.
As we understand that if you are not dealing with the intricacies of RON's versus minimal E-Notarization on a daily basis it can be very confusing, feel free to reach out to us for further clarification at any time.
- GAP INSURANCE
Especially in jurisdictions where it is not used normally, we are running into a great deal of confusion regarding the application of GAP insurance.
As we have gone into the coverage in depth in past updates, here we will simply reiterate that a transaction closed using GAP insurance has the exact same effect as if the documents were signed and then immediately recorded. As soon as the documents are signed, the funds can be fully disbursed and the transaction is complete.
We are running into many instances where real estate brokerages are holding commissions on files that closed using GAP insurance as their normal office policy is to release funds only upon recording. This is causing undue stress and delays.
Regardless of your industry role, if you are unsure of the effect and/or use of GAP insurance, please reach out to us with questions. It is an extremely valuable tool during the pandemic.
- TITLE/MUNICIPAL CLOSURES
With rates hitting historic lows of late and many areas experiencing strong spring home buying markets, we at Kriss Law/Atlantic want all of our clients to feel confident that we have found solutions to nearly every closure that could possibly effect the ability to conduct a real estate closing.
Whether it be making an appointment for our representative to visit a land records office with highly limited access, working with our great title insurer partners to come up with solutions that have even included closing without a new title, or using GAP insurance to get your clients into their new home regardless of circumstance, we have gotten 99.9% of transactions closed during the pandemic and will continue to do so.
If you or a colleague has a scenario where a file is on hold due to a closure, please feel free to let us know and we will gladly pass on any knowledge we have regarding the best way to get the transaction to the finish line.
- MORTGAGE PAYOFFS
With closing volume so high right now and many institutions dealing with employees in quarantine or sick, it is not a surprise that obtaining mortgage payoffs from some lenders has become more difficult. With that said, taking a few steps up front can help avoid issues come closing time:
Most title entities, our firm included, send a sheet requesting payoff information when a new file is opened. Realtors, when you are representing a seller, make sure that your client fills out that sheet and returns it immediately.
Lenders, when ordering title, make sure all requisite information is included so that payoff can be ordered ASAP. This information includes borrower(s) authorization and 1003.
While these actions should avoid issues in obtaining a payoff, some lenders are so inundated that don't be surprised, at least for the time being, if your title partner asks for your clients to contact the bank should things need to be expedited.
- REALTOR CE PROGRAM
We have been receiving a great number of inquiries related to our Realtor continuing education program. While we briefly put a hold on classes to focus our energies on operating in the pandemic, we are thrilled to announce that starting in the next couple of weeks, we will be offering several live, online courses. If you are an agent anywhere across the country and would like to be kept abreast of upcoming opportunities to earn credits toward your license renewal with us, please send a note to email@example.com and you will be added to our mailing list.
Keep an eye out for CE invitations hitting your inbox very soon!
As we hope we have made clear above, for those of you who have relied on Kriss Law/Atlantic as your title provider for many years, we continue to be here for you during this trying time. We'll do our best to continue to safely close your transactions, pass on any updated industry information as it arises, and be available to talk you through any of the many business intricacies we are all dealing with currently.
As we have since the pandemic's outset, we urge you to follow all suggested health best practices during this time and make the most informed decisions possible.
For specific Corona-related questions or issues, please feel free to contact us at firstname.lastname@example.org. In addition, please consult our website and social media feeds often for industry updates related to the outbreak.
We appreciate your continued patience during this time. This will pass and life will be back to normal before you know it. Until then, we'll get through it together.
Stay safe and stay home!!