Title Companies Offering Digital Closings Spikes 228% Since 2019
July 6, 2021
The number of title and settlement companies offering digital closings increased 228% compared to 2019, according to ALTA’s 2021 Digital Closing Survey.
The survey of 300 title professionals showed that 46% offered digital closings in 2020 during the COVID-19 pandemic. Prior to the health crisis, a 2019 survey showed that 14% of companies offered digital closings two years ago.
“Since the onset of the pandemic, title and settlement professionals rapidly adapted their processes to meet the needs of their customers and to continue facilitating safe and secure closings,” said Diane Tomb, ALTA’s chief executive officer. “One of the title industry’s most important tools in this process has been remote online notarization.”
According to the survey, more than 5 percent of transactions were closed with some variation of RON and 35 percent of companies currently offer this type of technology to close deals. Due to this spike, the ALTA Registry was updated to identify title and settlement companies that can perform RON closings. There is no fee to get listed in the ALTA Registry.
While the pandemic helped drive demand for RON, 35 states have passed permanent laws authorizing its use to help pave the way for this closing option. Meanwhile at the federal level, the bipartisan Securing and Enabling Commerce Using Remote and Electronic Notarization Act (SECURE Notarization Act) has been reintroduced in the House and Senate. The bill would permit immediate nationwide use of RON, create national minimum standards for its use and provide certainty for the interstate recognition of RON.
Of those surveyed, 64% expect an increase in RON closings during 2021. Lender and consumer requests, along with access to RON providers and changes to state laws were the top factors that would most likely alter a company’s timeline to implement technology to conduct RON closings.
RON was used the most in transactions involving sellers only (40%) and cash deals (23%), followed by refinances (17%) and purchases (14%).
Of those who took the survey, 52% said closing times decreased utilizing RON due to the number of documents signed ahead of time, while 43% reported cost savings. Implementing RON technology comes with a cost, however. The average expense to implement RON—including software, equipment and training—was just under $30,000 per office, according to the survey.
Despite significant growth in digital closings, an overwhelming majority of business continues to be conducted with paper. According to the survey, nearly 85% of respondents reported that all their closings were paper based, while nearly 5% were fully digital.
“RON is a convenient alternative to traditional in-person notarization for all consumers, but it is especially beneficial to consumers who are unable to easily travel to access notarial services, serve in the military overseas or have time constraints,” Tomb said. “ALTA members are leading the way in providing digital closing options that serve today’s consumer.”
Contact ALTA at 202-296-3671 or [email protected].