Title closing companies move to online notaries, drive-by closings.
Virginia Business virtually sat down with Mo Choumil, founder and CEO of Fairfax-based ATG Title Inc., which provides title insurance, escrow services and closing services, to see how real estate closings have been affected by the coronavirus crisis. This is part of an ongoing series of conversations with Virginians about how their work lives and businesses have changed during the pandemic.
Virginia Business: How has ATG Title been handling closings that are usually done in person?
Choumil: We switched to the cloud about three years ago, and it was really about offering flexibility to our employees. About 50 to 60% of our team was working remotely about once or twice a week [before the crisis]. This just accelerated the process that we had. [We’ve been doing] e-closing — it’s a remote notary (online notary), and we’ve done some drive-by closing, believe it or not. People come to the parking lot and sign documents in their car. They were not comfortable coming into our office, even though we’re very sanitary. The one thing we’ve been pushing is doing remote notary, or online closings, if people choose to.
VB: Was it difficult to switch to remote and drive-by services?
Choumil: It’s nothing new. Virginia was the first state to pass a remote notary bill … back in 2012. It’s a lot easier to do it digitally and to streamline the process because it keeps everybody safe and provides that comfort for people that, hey, you can still take advantage of these low interest rates and save money or even get cash, if you have equity, while I feel very, very confident and very safe. We don’t really print documents until closing, when people want to sign a deed or the mortgage. That’s when you really have to print physical documents for people to sign. I have a lot of friendly competitors [I] stay in touch with — and everybody is adapting. Business is as usual for us, as much as possible. We don’t want to put a hole in closing a transaction. Everybody had been adapting, doing similar things or doing like drive-by closings, or basically whatever it takes to keep transactions to go to closings.
VB: What have you seen in terms of number of transactions?
Choumil: People want to take advantage of the low interest rates. I think the refinance is going to keep going because the interest rates are so low, and a lot of borrowers could take advantage of the opportunity and lower their interest payments — and especially in these times when people need money. Purchases definitely slowed down a bit.
VB: How will this change business in the long term?
Choumil: I’m a big proponent of technology and streamlining process. I think our industry has been very bogged down with the bureaucracy. Sen. [Mark] Warner has been trying to pass the emergency bill to make the remote notary national.
There’s a lot of wasted hours and wasted time that go in to a physical closing, especially in refinancing. When you sign [a physical] paper, they have to do quality control and then ship the documents. A lender has to review the documents. There’s a lot of hours wasted. When you sign digitally, everything is quality-controlled on the spot. I see a lot of efficiencies, a lot of savings for the consumer.
From the lender’s perspective, the loan has to go through our post-closing department, then goes to the loans closing department to do the quality control to make sure everything’s perfect. Then the lender can sell it to the secondary market, like Fannie Mae or Freddie Mac. It’s a lot of hours, a lot of hands touching. With remote closings, everything is digitized. Those documents automatically go to the lender. They’re perfect. The quality control is 100% accurate. So you save a lot of time and effort. Every time we have to send a notary or some agent to somebody’s house for their closing, it usually costs hundreds of dollars. I see a lot of saving opportunities, between time and effort and dollars.
VB: How are the documents quality-controlled?
Choumil: Basically it has to go through a process, step by step. It cannot go to from one step to the next step until [the buyer] completes one step (i.e. initial, initial, then sign). When you have a physical paper, a lot of times initials get missed. That’s where the accuracy comes in. Then [the physical paperwork] also goes directly to the lender once the documents are signed. [With a digital signing], we don’t have to print and quality control [and] then ship to them. It’s all kind of streamlined in the back end.