This article is part of our educational series on the five key factors that determine how digital your mortgage closings can be, known as e-Eligibility.
For more information, download the full eBook or get your free e-Eligibility assessment to determine how digitized each loan in your portfolio can be.
Most lenders know they must digitize mortgage closings. But digitizing closings isn’t simple. Besides complying with ambiguous local regulations and sifting through conflicting and fragmented data, lenders need to be aware of e-Eligibility, or the factors that enable, restrict, and influence the extent to which a loan may be closed digitally.
Here, we’ll cover recording, one of the five factors of e-Eligibility. Recording refers to whether the local county recorder’s office will accept eSigned and eNotarized closing documents for recording. For example, if a county land recorder’s office does not accept eSigned or eNotarized closing documents, a mortgage closing automatically falls within the spectrum of either a wet or hybrid transaction.
If any of the recordable closing documents will be eSigned, the corresponding county land recorder’s office needs to permit the use of electronic recording (eRecording), or have provisions to accept representations of eSigned and eNotarized documents for recording (commonly referred to as paper-out recording).
As of March 2021, 2,217 counties support the use of eRecording, representing more than 85% of the US population. This is great news for lenders and borrowers, and we anticipate more counties will accept eRecording in the coming months and years. However, it is still a critical component when it comes to assessing the digitization of your loan closing: Failure to understand your county land recording requirements can lead to costly delays during the closing process.
The chart below gives lenders a detailed framework for what to consider when assessing County Land Recording.
DEFINITION OF COUNTY LAND RECORDING:
PRIMARY STAKEHOLDERS:
OBJECTS:
SYSTEMS:
MORTGAGE CYCLE:
DECISION POWER:
BOONS:
DRAGS:
SOURCES OF VARIABILITY:
PROCESS:
CONSIDERATIONS:
There is spectrum as to the extent to which a county might record eSigned and eNotarized closing documents:
Check out our other blog posts to learn more about each of the five R’s of e-Eligibility: