Mortgage Closings Under Shelter in Place and Social Distancing
With all the measures being taken to fight the spread of COVID-19, many day-to-day activities aren’t advisable, including an in-person closing on your new house. Not only are people unable to meet to sign and shake hands under the current guidelines, but county recording offices, notaries, and other establishments may be closed as well. This presents a challenge for people with a home loan in progress, and in some states, homebuyers are unable to finalize their mortgage paperwork. This difficulty extends to title insurers as well, who may not be able to access the necessary physical records to issue a policy. In-person document recording is also unavailable.
Fortunately for some, CNBC reported that nearly 21,000 counties provide some kind of digital portal to property records, but that still leaves thousands more without online access. Some jurisdictions may allow for recording documents via the internet, but still don’t have digital access to existing records.
Gradually, the American Land Title Association is working with partners across the country to track office closures and online access. Even with options for remote documentation and research, notary services are yet another piece of the puzzle. Currently, just 23 states allow for remote electronic notarization. A recent bill introduced to the Senate aims to change this. The Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2020 allows for online notary services nationwide.
To address other roadblocks during the coronavirus pandemic, the FHFA is changing guidelines for portions of the inspection and appraisal process, as well as updating guidance about underwriting, employment and income verification, and other typically in-person interactions to allow for social distancing.
All of this means that many in-progress mortgages will be finalized, and that thousands of homebuyers won’t be left in limbo. Still, the bill allowing for online notarization is in its infancy, and it will certainly take time for many of the nation’s counties to update systems to provide online records.
As always, every individual has a unique set of circumstances surrounding their home loan, employment status, even state and local regulations. It’s difficult to have a prospective timeline on legislative changes or new systems in place, but it’s good to know that many of the problems have been acknowledged, and that progress is being made. If you are somewhere in the middle of the mortgage and home buying process, contact your lender and realtor right away. Together, you can find out where exactly you stand, and what services may still be available during shelter in place orders, what you can accomplish online, and how you can still make progress toward closing on your home during this time of crisis.