CE & CLE FAQs are available under the Texas TIPS tab at - PowerPoint PPT Presentation

CE & CLE FAQs are available under the Texas TIPS tab at www.stewart.com/texas

 If you have questions after the presentation, please e-mail the presenter or your favorite Texas underwriting counsel.  In order to obtain a CE Certificate or CLE Credit, you must listen to the webinar for a minimum of 55 minutes, obtain the password provided at the end of the presentation and follow the instructions as given. 2

ATTORNEY INFORMATION Because of opinions expressed by the Texas Department of Insurance (TDI) concerning rebates, legal credit is available only to:  Attorneys who own title agencies that are Stewart Title Guaranty Agents  Attorneys employed by a title insurance agent licensed with Stewart Title Guaranty or Stewart entities  Fee attorneys who have an Escrow Officer license through a Stewart Title Agent or Stewart entity We welcome any other lawyers to listen, but cannot provide continuing education credit to you. 3

E-Closing: Future or Now? By: Dawn Lewallen, Senior Underwriter & Senior Compliance Counsel June 15, 2017

eClosing • eClosing : The closing process where some or all of the closing documents are signed electronically. For the closing to be 100% paper less, the eClosing must include electronic notarization, as some loan documents require Notary. • eMortgage : A loan with electronically signed (eSigned) Note. Other Closing Documents can be electronic or paper. • eSignature and eNotary is growing in coverage. – eSigning is becoming commonplace (and expected). – eClosing in local offices is gaining traction – Remote Notarization is growing in coverage – still rare!

What is Driving Interest? • Lender Postcards • Secondary Market – The desire to provide better customer – Potential for increased liquidity and experience reduced cost for warehouse lines – Potential for increased liquidity and – Reduced risks for warehouse lenders reduced cost for warehouse lines (Immediate receipt of collateral & – Reduced risks for warehouse lenders recognition of their security interest) (Immediate receipt of collateral & – Reduced document processing and recognition of their security interest) handling costs – Reduced document processing and – Minimized delays in loss mitigation handling costs activities – Minimized delays in loss mitigation – Ease of proving compliance with activities regulatory requirements – Ease of proving compliance with regulatory requirements – Economic Drivers $2K per loan transaction.

Lenders 1. Lenders are rapidly building or implementing “e” solutions. 2. Lenders are looking to partner with title providers on pilots NOW. 3. Lenders are moving on their digital strategy.

Real Estate Changes and Today’s Environment: Consumers are able to search for homes and schedule showings online using Zillow, Trulia, Move, etc. Listing Agreements and Purchase Contracts are now created using electronic forms and DocuSign, the exclusive provider of eSignatures for the National Association of Realtors. Realtors zipLogix allows Realtors to integrated Forms, DocuSign, transaction management and open escrow/title online. https://www.youtube.com/watch?v=5ixonU1R9X8 Approximately 30 percent of the nation’s mortgage volume flows through Ellie Mae’s Encompass platform which enables lenders’ use of DocuSign integration for disclosures and docs. Lenders Lenders focused on “efficiency” are turning to the consumer experience due to Rocket, Roostify , Blend…

Light speed push for electronic process Closing times are the benchmark of a lender today-Technology is pushing this in a myriad of ways: • Real estate contracts are executed using electronic signing processes with realtors • Loan Applications are being submitted electronically through portals, websites and mobile applications that integrate with LOS’s • Loan Disclosures due within three days of app, lenders relying on LOS integrations with title and third party fee engines to provide timely disclosures, expect immediate access to fees to ensure same day disclosures • Loan Disclosures delivered electronically via email or portal for virtually all lenders us eSign technology • Loan processing is done electronically using electronic portals for income and asset documentation upload • Loan Underwriting is done using AUS technology from the GSE’s confirming income and assets electronically and instantly providing day one certainty of loan eligibility HARD STOP- TITLE AND SETTLEMENT AGENTS!

Technology Changes- Digital Disruptors

Marketplace Reality Web and mobile applications are used across many industries. Consumers expect a digital solution to improve their experience. Consumers expect these interactions because it is happening today. Examples: • Starbucks • Amazon • Domino’s • How might it apply to us? Credit Card Sales

Boomers and Technology • Boomers embrace technology as much as younger users. • Generation is prepared for more technology- Internet of Things will not be alien to them. • A generation of tech adopters and learners who are use to technology life enhancements. • Blenders of old and newer technology.

Demographic Changes: $30 Trillion Wealth Transfer to… • Generation X – Gen X is in peak consumption/ earning years. – 30% of U.S. Spending with a home as top purchase. • Millennials – 93% say they want to own a home. – Millennials will expect a better experience (like Amazon, Uber, VRBO, Auto Finance, SoFi, etc.). – According to a Nielsen survey, millennials cited technology use as the most defining characteristic of their generation.

Generation Z

Don’t get left behind! “Wow, that was easy!” You can move quickly by focusing on immediately achievable benefits by implementing a few simple recommendations now.

Impact of Remote and eClosing on a Traditional Title Business • Technology disrupters that appeal to changing demographics have the potential to bring our industry to its own “Netflix” moment .

eMortgage is a Reality • Federal and state laws and regulation have evolved. LENDING • GSEs/Investors and other INSTUTITIONS ARE participants are LEADING THE WAY! embracing and promoting digital mortgage. • Technology providers are ready and able.

GSE/Regulatory CHANGES HousingWire- February, 2017!

CFPB eClosing Pilot Results 14

Use your special skills to bring eSign eClose to market Technology providers and drive the future! YOU! Rather than lender’s, eSign and remote notary companies driving the future! Consumer, Lender, Realtor

How real estate settlements will begin to be handled using electronic methods? • What documents? • Traditional • Hybrid • Full eClosing • What method? • Traditional “wet sign” • Electronic in person • Electronic remote • What about notarized documents? • Traditional • eNotary • Remote Notary

A Hybrid Approach- Documents for Electronic Signature Excluded Included • • Escrow Documents Not Note Requiring Notarization • Security Instrument (Deed of • Lender Documents as Allowable Trust) by Lender • Notarized Documents • Final Closing Disclosure • Notice of Right to Cancel/Rescind • Recordable Documents https://www.fanniemae.com/content/fact _sheet/eclosings-emortgages-myths.pdf

FULL eCLOSING- VIA WEBCAM Everything electronically signed via webcam or internet conference.

BENEFITS OF THE A NEW WAY • Fewer mistakes during and after closing. Reduce number of documents, of missing pages, of missing or incomplete documents. • Support quality control (automated compliance, record retention schedules and control over access rights. • Improve collaboration and work flow. Simplify and streamline documents. • Customer friendly experience. Better experience for everyone! – More time to review documents before signing. – Empowers customers to ask questions and be more active.

Efficiencies: Estimated Hours Saved Traditional Closing eClosing Buyer’s Travel Time (R/T) 1 hour Not required Buyer’s Travel Time (R/T) Seller’s Travel Time (R/T) 1 hour Seller’s Travel Time (R/T) Not required Buyer’s Agent Travel 1 hour Not required Buyer’s Agent Travel Time Time (R/T) (R/T) Seller’s Agent Travel 1 hour Not required Seller’s Agent Travel Time Time (R/T) (R/T) Not required Total Travel Time Total Travel Time 4 hours Closing Time 1 hours Closing Time 5 hours Total Closing Time for 1 hours Total Closing Time for 6 hours Each Party Each Party

It is safe and secure. • Increased security for personal information.

Steps to Full eClosing Step 1: eSignature Step 2: County eRecording Step 2: eNotary Step 3: Remote Notary

Are Electronic Signatures are Legal and Defensible? Electronic signatures are valid if the parties agree to sign electronically under: • In 2001, Texas adopted the Texas Uniform Electronic Transactions Act (“TUETA”) is codified at Colo. Rev. Stat. See Texas Bus Com Code §322.001 (et seq.) • The Electronic Signatures in Global and National Commerce Act enacted into law in 2000 (“ESign”, 15 U.S.C. 96 §7001 et seq).