COVID-19, Video Closings

April, 1st- Earlier today Governor Kemp signed an Executive Order allowing remote witnessing and notarization of closing documents. This Executive Order, combined with the Georgia Supreme Court’s decision to suspend the Rules of Professional Conduct that requires an attorney to be physically present at the closing of a real estate transaction, has made it possible to allow video closings during the Coronavirus emergency.

As you are aware from previous Coronavirus messages from our firm, we are prepared to offer video closings through Zoom Pro immediately. There are varying requirements between Title Insurance Companies and Lenders but the following is a brief description of what you can expect. Of course each closing is unique and we are available to work through whatever issues may arise and are here to help find the best accommodation for your situation whether that be video closing, POA or signers coming to our office.

For a successful video closing, please expect the following, with specific instructions to come for your particular signing based on the Lender and Title Insurance Company:

1. Our firm will send the closing documents to the signer via a courier, overnight delivery, or a secure email. The signer will open the sealed package in the presence of the Attorney on the video closing or print the documents received in the secure email in the presence of the Attorney on the video closing.

2. The original documents must be executed in the presence of the Attorney by the signer during the video closing. The signer must be physically located in Georgia and must provide a valid government-issued photo ID.

3. The signer will place the original signed documents in a sealed package in the presence of the Attorney during the video closing. The original executed documents shall be returned to our firm either through a courier, the signer dropping them off, or through overnight delivery.

4. Once we receive the original signed documents the notary will notarize the documents and we will submit the originals to recording.

5. Our firm will disburse funds and record once we receive all original documents, funds, and lender and title insurance company approval.

As the safety and health of our customers, agents, lenders, staff and attorneys continue to be our top priorities during this time, we are glad that video closings are an option, but this option comes with considerable timing hurdles. We believe other options do present fewer hurdles with lenders and title insurance companies and continue to believe that the third party power of attorney option offers the best solution. In consideration of the option of video closings we sent out a message earlier in the week discussing potential issues and solutions with video closings. That information is included below for your review.

We appreciate each of you and please reach out to us for any questions and accommodations. We are here for you!

Our thanks,
O’Kelley & Sorohan

Potential Issues and Solutions with Video Closings-
As we prepare for the potential option of teleclosing (we are assuming it becomes available), we have been going through various “what if” scenarios for a teleclose process. While it is a safer option for all parties involved in a closing, it will present some issues that have to be resolved by lenders and attorneys as to what to do once someone has signed the closing documents remotely. The most obvious issue is funding of the transaction. In an in person closing, closing documents are signed and many of the documents are requested by lenders to review prior to funding a transaction. For a teleclose, we won’t have the easy process of having those handy and will have to work through getting those documents in hand to then send to the Lenders for review. Not all lenders require seeing documents before funding, but most do.

The hope is that if the teleclose option becomes available, then the closing will be seamless in timing and we will send a courier to retrieve the documents so as to accelerate the timeline for funding. It is unlikely that funding would be allowed on copies only on a widespread basis, but that is not to say it will not happen. If there are no or few changes for funding requirements, then the borrowers in a transaction will have to scan and send the signed documents in for funding, or take pictures and send or overnight the documents or courier the documents to us for further execution and then to proceed to funding. Additionally, title insurers will require lawyers to have the original signed documents in hand to insure. These are only a few of the “what ifs” that will have to be addressed in a teleclose world, and we are hopeful these issues will be easily overcome to help keep all parties safe.

In the event this potential new teleclose option is too cumbersome for timely funding, we still believe a power of attorney option is an excellent way to accomplish closings and to maintain stride in timing and funding. Using a power of attorney along with the use of the teleclose option presented allows both a teleclose and timely funding of a closing. As to the power of attorney option, there would have to be approval by the Lender for the use of the power of attorney. In anticipation of the use of this option, we have secured a third party law firm to be the designated power of attorney and that third party would serve as the designated signer/s for the documents that are being signed remotely (via teleclose) by the parties. With this option, the documents are signed, can be sent for funding, and then can potentially be replaced by the original documents signed by the parties to the transaction with proper destruction of the duplicate documents executed for closing and funding by the power of attorney once the originals are sent in from the remote teleclose parties. Of course this is just an example of a “what if” for the” now what” questions that will come up if lawyers are allowed to teleclose. And along this vein of having a power of attorney, we are still able ourselves to be the designated power of attorney for signing for the parties, but that option appears to not be something the large agencies (Fannie Mae as an example) are comfortable with for closings.