Commercial and residential mortgage lenders who neglect to embrace the benefits of—and growing trend towards electronic filing and e-recording of mortgage-related real property documents—could encounter significant problems over time, including rising transaction costs, workflow inefficiencies, and dissatisfied borrowers. That’s according to Wolters Kluwer Compliance Solutions, writing in a new thought leadership piece.
“Electronic recordings are not the way of the future; they are the way of the present,” writesSandra Langford, Senior Product Manager, Wolters Kluwer Compliance Solutions, in her recently published article, “The Paperless Revolution Will Not Be Televised: Electronic Recording of Real Property Documents is Now,” in the Commercial Lending Edition of Scotsman Guide. “For real property documentation, the efficiency, security, and overall convenience of electronic documents make it the most logical option for lenders.”
Of the 3,865 county-level recording jurisdictions in the United States today, she notes that most have begun accepting some form of electronic e-recording—and a handful now only accept e-recordings rather than manual, paper-based recordings.
“Lenders are taking notice of the increasing prevalence of electronic recordings and filings for mortgages, Uniform Commercial Code, and other transactions,” says Steve Meirink, Executive Vice President and General Manager for Wolters Kluwer Compliance Solutions. “This trend mirrors the larger growth of electronic, digitally based platforms for banking transactions of all types, from originations and closings to servicing and securitizations. Lenders are increasingly embracing the benefits of speed, convenience, auditability and security that digital platforms bring to banking, much to the delight of their customers.”
The onset of COVID-19 in 2020 abruptly shut down county offices and dramatically slowed down the efficiency of the U.S. Postal Service and courier services for weeks. Paperwork deemed “complete” may in fact have been delayed in the mail or in receiving offices closed due to the pandemic, jeopardizing filings. Langford notes that under normal conditions, recording and filing delays of even a few days can cause serious issues for lenders and their customers: “Several weeks of delay—or months—can cause a transaction to completely fall apart,” she writes.
Compare that experience, she notes, when organizations move to a secured e-recording method. “(Electronically) imaged documents, lined up in a queue, waiting for their turn: they are organized and there is virtually no chance for them to go missing. There is no elevated risk of security—in fact, the security is stronger on most online platforms than in the lobby of many county recorders,” she remarks.
Scotsman Guide has covered U.S. financial news, trends, and developments for more than 25 years, and hundreds of thousands of mortgage professionals rely on its insights to make profitable business decisions.
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