Pavaso, Residential Mortgage Complete First E-closing in North Carolina
October 4, 2016
The long-awaited and oft-discussed residential mortgage e-closing has become a reality in North Carolina. Residential Mortgage Corp. and real estate technology provider Pavaso have enabled a North Carolina resident to complete the first residential e-closing in state history.
Under the supervision of partner Susan Benoit of the Hutchens Law Firm, homebuyer Jacqueline Vaz finalized the “wet signing” on Sept. 30 by physically affixing her signature to a small number of documents specifically required by their investor. The remainder of documents requiring signature were finalized electronically.
Vaz admitted that, as a first-time homebuyer, she was a bit anxious leading up to the closing, “I had asked a lot of my friends and colleagues what to expect. I heard horror stories about how long the closing would be and how intimidating it was to sit with so many papers to sift through and be expected to sign within an hour or so.”
Fortunately, the reality of the experience was anything but a horror story. “It gave me a high level of comfort to be able to read through all of my closing documents prior to coming to the closing table. I was also happy to be able to do it in the comfort of my own home. I had time to sit and read everything before my closing date, which took the pressure and stress away from the process,” she said.
The otherwise traditional home closing was made historical by Residential Mortgage’s use of the Pavaso Digital Close solution. Through Digital Close, the buyer received the closing package three days before closing. This provided Vaz with the time to review documents online to understand them and ask questions prior to closing. At the closing table, she was able to digitally sign all documents, with exception of the few documents by state law and investor requirements that required a “wet” signature. Each wet-signed document was automatically barcoded when printed from Pavaso’s system so that, upon the physical signing of the required documents, the forms could be digitally scanned and imported back into the system. From there, the Pavaso system would automatically sort, file and store the pertinent information electronically.
“Today’s closing is further proof that the age of the digital closing isn’t imminent—it’s here,” said Nancy Pratt, vice president of partner relations and government affairs for Pavaso. “This is what we would call a ‘hybrid closing.’ North Carolina supports a fully digital closing, allowing for e-notarization and e-recording, but a hybrid closing is necessary since many investors still require a physical, rather than digital, signature for certain closing documents.”
Pratt noted that e-closed loans have already been sold on the secondary market and that the process is growing. “We’ve been working with Residential Mortgage Corp for years to make the eClosing a reality—this is a visionary organization driven to do anything within its power to improve the consumer experience,” she said. “However, early on, an inability to sell the loans upstream to investors was a significant challenge. With Wells Fargo now stepping forward to buy hybrid loans closed on Pavaso, we’ve been able to make a seven year dream come true.”
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