Lenders forego the office to transact closings

Front porches, parking lots and lobbies are the new settings for securing borrowers' signatures

Mortgage closings in an office have become so very last year thanks to the coronavirus. This has forced mortgage professionals to try different approaches for getting their borrowers to sign the necessary closing paperwork.

Cody S. Velkovich, sales manager at American Pacific Mortgage in Austin, Texas, found himself out of the office in late March assisting a U.S. Marine Corps veteran who was purchasing a new construction home without Realtor representation.

“Had I not gone to the closing, she would have been alone in this monumental process,” Velkovich said.

Velkovich joined his client at Austin Title Co. and knocked on the office door, which was located inside the first floor of an office building.

“The receptionist came and told us to have a seat on the couches – six feet apart, of course – in the lobby of the building, not the office,” he continued. “The escrow officer came out with the closing package in a mask and blue latex gloves, set the stack of papers in front of the borrower, along with a pen, latex gloves, and alcohol wipes. She instructed my client that if she had any questions to please knock on their door, and then returned to the title company office, leaving the borrower and myself in the lobby.”

Velkovich assisted the borrower with her questions while the escrow officer popped out of the office roughly every 20 minutes to check on their progress.

“After signing the package, we informed the receptionist that signing was completed,” Velkovich added. “The escrow officer came back out and collected the paperwork, and the closing was a wrap.”

Over at NewDay USA, the company created the SafeClose program to keep mortgage clients at home with a combination of digital technology and at-home delivery.

“Rather than the notary bringing 120 pages to the borrower’s house, sifting through them one by one, shoulder to shoulder, we’re able to send most of them electronically,” explained Michael Orsler, chief operating officer for the Fulton, Maryland-based company. “For the critical documents that absolutely need to have a wet signature, we send the notary out to the house. But because it’s a much simpler package of documents, they can coordinate from afar – from the porch or the driveway, whatever makes sense for everybody involved. They don’t need to put themselves at risk to get their loan closed.”

David Gray, mortgage loan officer at Nations Lending in Independence, Ohio, also dispatched notaries to coordinate closings at the borrowers’ homes, with each new operation taking on a complex logistical vibe. He recalled one case where the notary arrived at the home and placed the documents on the front porch before retreating a safe distance backward.

“The client grabbed the documents and went inside,” he said. “They had a little setup on the other side of the window. The notary was sitting on the exterior of the home and called them on their cell phones. So, now they are communicating via cell phone through the window, and the clients were able to show their identity and the notary can even take a picture of that to confirm identity. And then they were walking through those documents by cell, where they can see each other through the window and go through a closing as if they were at the title office. And the client is using their own pen, so the only thing that they’re touching is the paper that the notary printed off – very, very minimal germs can be exchanged.”

Gray added that despite the awkwardness of the physical transaction, his team was “taking all the necessary precautions and adapting, but still making sure that we can do our job for the client.”

Brian Koss, executive vice president of Danvers, Massachusetts-headquartered Mortgage Network, noted that his company has “had examples of curbside closings with people meeting in parking lots, someone standing outside with the other person in their car and pointing out, ‘Sign the docs there.’”

However, Koss acknowledged this is not always the ideal situation for all stakeholders and requires advance preparation.

“It really has to do with the comfort level of the attorney and title company, whether they’re comfortable with their paralegals,” he continued. “Or whether the borrower and the seller and all parties are comfortable – one can easily drag their feet. There’s a lot more conversation, a lot more preparation.”

Still, there are lenders who continue to conduct closings in the office, albeit with multiple new precautions. Austin-based Amplify Credit Union has issued guidelines to its team and partners to create a safe environment for all stakeholders in the closing process, which is still primarily a person-to-person transaction.

“We only allow our signees to attend person-to-person closings,” said Kristin Keller, vice president of real estate lending. “Until further notice, no friends or family members are permitted onsite. We have staggered our appointments to allow our staff time to clean the meeting room thoroughly. We are encouraging signees to use new pens and polyethylene gloves, both of which we make readily available. We are also asking our team and our borrowers to adhere to social distancing best practices throughout the closing process. This means limiting the number of staff in the room and providing six feet of personal space at all times.”

Keller added that the credit union’s mortgage customers have been supportive of these new initiatives.

“The overwhelming response from our borrowers has been one of gratitude,” she stated. “They appreciate that we’re continuing to prioritize their needs in these difficult times and that we have taken such a thoughtful approach to member safety.”

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