If there’s one thing the digital mortgage saves, it’s time. It’s why some of the biggest players in real estate are closing entirely online: Loans are serviced sooner; realtors are paid sooner; signers get their keys sooner; everyone is happier sooner.
The ability to electronically record (eRecord) real property documents makes or breaks the digital mortgage process, but you can’t eRecord without a little help from your mortgage friends.
Here’s everything you need to know about eRecording real estate documents.
What is eRecording?
To eRecord a document is to submit it for digital record-keeping. By law, these documents hold the same legal merit as a paper document.
For real estate closings to be eRecorded, the mortgage packet needs to be digital from the start. That means before a title agent can conduct fully online closings, we must first onboard your lender and sync their Notarize account to their eVault.
If your underwriter will then insure the transaction and the county recorder will accept the electronic closing package, you’ll be well on your way to closing online.
Which counties accept eRecorded documents?
According to the Property Records Industry Association (PRIA), as of March 1, 2020, only half the recording jurisdictions in the United States accept eRecorded documents. However, 90% of Americans live in counties that accept eRecordings.
Additionally, Simplifile – one of the leading eRecording service providers – maintains a list of its eRecording counties in a list here.
We recommend that you confirm by calling or emailing your county recorder directly, for the sake of a smooth closing process. That’s because not all recording jurisdictions accept eRecorded documents, and they are not required to.
While remote online notarization (RON) is entirely legal, we often see two hurdles on the path to eRecording acceptance.
A need for infrastructure
Sometimes, the reason an electronic document is rejected by a recipient is because there’s no infrastructure in place to store, manage, or catalog those documents. It’s why we so often stress that you should check with your document’s recipient before going through an online notarization.
The county recorder has the right to determine the value of adding an eRecording system based on the available technology, needs of the marketplace, and financial resources. There are national standards that encourage this adoption, but it is not mandatory.
A need for education
Electronically recording documents isn’t a new concept, but that doesn’t mean everyone is up to speed. You may find success with one individual, but hit a wall with another person at the exact same county recorder’s office.
We at Notarize pride ourselves on providing helpful resources to help demystify online notarization, like our Complete Guide to Remote Online Notarization.
The exception: papering out
If you are closing on a property in a county that only records paper documents, papering-out might be a viable option. Papering-out allows you to complete all the closing documents electronically before printing out the electronic record and submitting it as a certified paper printout.
Ten states currently have laws in effect that allow for the papering-out of real estate documents: Florida, Idaho, Kentucky, Minnesota, Montana, North Dakota, Ohio, Oklahoma, Tennessee and Texas. Three additional states will go live in 2020: Iowa (effective date of July 1, 2020), Maryland, and Washington (both with an effective date of October 1, 2020).
Each state has its own requirements for recording a paper printout of an electronic document. Each state’s rules specify:
- Who must supervise the printing out of the electronic document? For example, whether it must be a notary, attorney, escrow officer, or someone else;
- What kind of certification must be attached? For example, whether it is called a “Declaration of Authenticity” or a “Copy Certification; and
- The specific language and or contents of the certification.
Generally, any papering out process involves three steps:
- The right person in your office (usually a notary) will supervise the printing of the electronic document to be recorded. This printout should be the entire document, including any notarizations applied to the document by an electronic or remote notary.
- The notary would then attach his or her own Certificate stating that the printout is a true and accurate printout.
- The paper document with the new “Certification” is then submitted for recording.
Please refer to your individual state’s rules around papering out for the appropriate context.
What if eRecording isn’t an option?
If you can’t record for any reason, but your lender partner has a relationship with Notarize, you can complete Hybrid closings to make your in-person closings run faster and smoother.
Our hybrid closings allow you to capture some of the digital efficiencies like eSignatures on some documents while maintaining the in-person notarial session. With this option, most of the closing documents can be electronically signed by borrowers at their convenience.
The closing agent will only need to witness and notarize a handful of documents at the closing table, such as the Note.
Hybrid closings are available in all 50 states because the most important element of the home closing – the notarial act – is still done in person.
You can find more information about Hybrid closings on our Support page.