Boring title: Industry update | ARLnow.com

Title insurance is boring, however Allied title and escrow is here to decipher the jargon and make it (a little) more interesting. This bi-weekly feature will explore the mundane (but very necessary!) World of title insurance while sharing interesting stories about two friends’ entrepreneurial careers.

We wanted to keep those interested in real estate up to date on how the virus has affected our industry, so here’s an update on all 3 states in this area.

Following the recent updates on government closures, we wanted to keep everyone updated on the implications of the mandates in each jurisdiction. Financial institutions, including banks and title companies, were considered essential so we will continue to be able to complete transactions for the foreseeable future. While we can continue to make comparisons, there will certainly be challenges and changes in our policies and procedures going forward.

To enable eRecording, under normal circumstances the title agent must physically scan and index the documentation to the clerk via a technology portal and someone must be present in the clerk’s office to accept the quality control and enter the data into the clerk’s records.

It appears that in almost all local jurisdictions the clerk’s offices continue to accept electronic records even when employees are forced to work remotely. Our title insurer has agreed to continue to cover the “gap” periods from closing to recording in the event that recordings are delayed due to shutdowns.

Another good news is that under Dodd Frank “Title / Settlement Services” are being viewed as part of the “Financial Services” sector, making title insurance agencies “essential businesses” to remain operational in the event of closures / quarantines.

Notwithstanding this allowance, the significant challenge of physically COMPLETING the transactions remains (meeting customers face-to-face in a confined space to sign documents, touch paper, pens, and potentially infect employees, agents, lenders, etc.). We adapt quickly to the ever-changing environment by limiting closing times, parties allowed to attend the closure, and we can send notaries to do the closure at your home, either outside on your patio or the notary can wait outside while you log in from the comfort of your home as long as they can verify that you have signed the documents.

You can also designate a limited power of attorney for a representative from our company to sign the settlement documents on your behalf. This still requires that you sign the power of attorney in the presence of a notary, but limits your interaction to that single document.

The title insurance industry is traditionally a predominantly paper-based industry and is only in the recent phase of the transition to paperless, digital and completely online. Fortunately, we have been, and have been, leaders in technological optimization of the entire closing process since our inception. We are set up for Remote Online Notarization (RON) by Notarize and 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 deal will be able to be completed using RON functions. We are pushing as many as possible for RON closures, and there are national emergency laws that allow RON recognition in 50 states.

Additionally, FannieMae and FreddieMac are considering the LPOA Signing Emergency Allowance, allowing borrowers to exercise limited authority over remote online notarization technology and authorizing closing agents to sign paper documents on their behalf, reducing the physical presence of closing operations and the potential for further spread of the virus .

We will of course keep you updated on any developments on this front, but as of today we are limited to sellers or cash buyers who sign via RON but can do any 3 states.

Here is a summary of the current developments in each jurisdiction, how these mandates relate to real estate transactions, and what steps Allied Title is taking to address these challenges:

Virginia

  • Closes all schools for the remainder of the school year
  • Shops that are not strictly necessary are closed for 30 days
  • All public and private gatherings of 10 or more people are prohibited
  • Prohibited dine-in service in bars and restaurants

Concerning real estate:

  • Property closings continue
  • Courthouses are closed to the public, but the clerks’ offices are still open and accepting recordings
  • In the event registrars close, there is a law that allows withdrawal without registration as long as all parties, including the lender, sign an agreement that allows the transaction to be paid off
  • Our underwriter, Old Republic Title, offers gap insurance that extends legal protection from the date of closing to the date of registration.

Maryland

  • Closed all stores that do not fall under federal guidelines that are defined as Critical Infrastructure
  • Announced the Creation of the Maryland COVID-19 Emergency Relief Grant Fund, which will provide grants of up to $ 10,000; and the COVID-19 Emergency Loan Fund, which can provide interest-free loans of up to $ 50,000 to businesses with 50 or fewer employees to help with payroll, rent, and utilities

Concerning real estate:

  • Most of the courthouses are closed to the public
  • E-recordings are accepted and will continue in most counties
  • Montgomery County does not allow e-records, but allows abstracters on their approved list to submit records and further process the records
  • Our underwriter, Old Republic Title, offers Gap Insurance that extends coverage from the date of purchase to the date of enrollment

DC

  • All non-essential businesses closed
  • DC residents were asked to stay home
  • Prohibited gatherings of more than 10 people
  • Prohibited dine-in service in bars and restaurants

Concerning real estate:

  • As usual
  • The DC Recorder of Deeds Office is open
  • They will continue to accept e-recordings

If you or someone you know has any questions, don’t hesitate to ask us, we’ll be happy to answer them!

Stay safe!

-Allied title and escrow

Comments are closed.