Title insurance is boring, but Allied Title & Escrow is here to decode the jargon and make it (somewhat) more interesting. This biweekly feature will explore the mundane (but very necessary!) world of title insurance while sharing interesting stories of two friends’ entrepreneurial careers.
We wanted to keep those interested in real estate updated on how the virus has affected our industry, so here is an update on all 3 states in this area.
Following recent updates regarding state shutdowns, we wanted to keep everybody informed on the effect of the mandates in each jurisdiction. Financial institutions, including banks and title companies have been deemed essential so we will continue to be able to close transactions for the foreseeable future. While we will be able to continue to conduct settlements there will certainly be challenges and changes in our policies and procedures moving forward.
In usual circumstances, to allow for eRecording, the title agent must physically scan and index documentation via a technology portal to the Clerk, and someone physically located at the Clerk’s office must be there to accept, Quality Control, and input the data into the Official Records.
It appears that in almost all local jurisdictions that the Clerk’s offices will continue to accept e-recordings even if the employees are forced to work remotely. Our title insurance underwriter has agreed to continue covering the “gap” periods from closing through recording, in the event recordings are delayed due to shutdowns.
In other good news, under Dodd Frank, “title/settlement services” are considered part of the “Financial Services” sector, making title insurance agencies “essential businesses” to remain functional in case of shutdowns/quarantines.
Regardless of this allowance, the significant challenge of physically CLOSING the transactions remains (meeting with clients face-to-face in a confined room to sign documents, touch paper, pens and potentially infect staff, agents, lenders, etc.). We are quickly adapting to the ever-changing environment by limiting closing time, parties allowed to attend closing, and we are able to send notaries to conduct closings at your home either outside on your patio or the Notary can wait outside while you sign in the comfort of your home as long as they can verify that you signed the documents.
You may also designate a Limited Power of Attorney for a representative from our Company to sign the settlement documents on your behalf. This still requires you to sign the power of attorney in the presence of a Notary, but limits your interaction to that single document.
The title insurance industry has traditionally been an overwhelmingly paper-based industry, and it is only in the recent stages of moving to paperless, digital and completely-online. Thankfully, we are, and have been since our inception, leading the charge towards technologically streamlining the entire closing process. We are set up for Remote Online Notarization (RON) through Notarize and we also offer Earnnest for the delivery of ACH Earnest Money Deposits from your phone or computer.
The challenge is that the majority of lenders are NOT eClosing-ready… so not every closing will be permitted to close via RON capabilities. We are pushing as many towards RON closings as we can, and there is national emergency legislation allowing for 50-state RON recognition.
Additionally, FannieMae and FreddieMac are considering the emergency allowance of LPOA signings, with borrowers executing a Limited Power of Attorney via Remote Online Notarization technology, authorizing closing agents to sign paper documentation on their behalf, thereby limiting physical attendance at closings and the potential of further spreading of the virus.
We will of course keep you up to date on any developments on this front, but as of today we are limited to Sellers or Cash Purchasers signing via RON, but can do all 3 states.
Here is a summary of the current developments in each jurisdiction, how those mandates pertain to real estate transactions, and the steps Allied Title is taking to address these challenges:
Virginia
- Shut down all schools to close for the remainder of the school year
- Closed non-essential businesses for 30 days
- All public and private in-person gatherings of 10 or more individuals are prohibited
- Banned dine-in service at bars and restaurants
Pertaining to Real Estate:
- Real estate closings will continue
- Court Houses are closed to the public, but the clerk’s offices are still open and accepting recordings
- In the case that recording offices do close, there is a statute that allows disbursement without recording, as long as all parties, including lender, sign an agreement allowing the transaction to disburse
- Our underwriter, Old Republic Title, is issuing Gap Insurance which extends title insurance coverage from the date of closing through the date of recordation.
Maryland
- Closed all businesses not covered by federal guidelines defined as critical infrastructures
- Announced the creation of the Maryland Small Businesses COVID-19 Emergency Relief Grant Fund, which will provide grants of up to $10,000; and the COVID-19 Emergency Relief Loan Fund, which can provide no-interest loans of up to $50,000 to businesses with 50 or fewer workers to help with payroll, rent and utilities
Pertaining to Real Estate:
- Most Court Houses are closed to the public
- E-recordings are accepted and will continue in most counties
- Montgomery County does not allow e-recordings, but will allow abstractors on their approved list to drop off recordings and will continue processing recordings
- Our underwriter, Old Republic Title, is issuing Gap Insurance which extends title insurance coverage from the date of closing through the date of recordation
D.C.
- Closed all non-essential businesses
- Urged D.C. residents to stay at home
- Prohibited gatherings of more than 10 people
- Banned dine-in service at bars and restaurants
Pertaining to Real Estate:
- Business as usual
- The D.C. Recorder of Deeds Office is open
- They will continue to accept e-recordings
If you, or somebody you know, has ANY questions at all, please don’t hesitate to ask us and we will be happy to answer them!
Stay Safe!
-Allied Title & Escrow