Click here to read the full version of this article, which originally appeared on GlobeSt.com sister publication, ALM's law.com. Rachel D. Jaffe, author of this article, is vice president and senior counsel at OneTitle National Guaranty Co.

THWOMP! The mortgage lender's counsel drops a five-inch stack of paper in front of an unsuspecting homebuyer fidgeting nervously at a closing table. Two to three hours later, the shell-shocked borrower emerges after scrawling their signature over and over on page after page, their cramped, limp hand now smeared with ink. The purchase of a home or refinance of a loan are usually happy times for the homebuyer/borrower. But nobody would miss the seemingly endless paperwork at the closing table. Which leads to another possibility: the eClosing.

An eClosing is the act of closing a mortgage loan electronically. The eClosing process occurs in a secure electronic environment where some or all closing documents are accessed and executed over the Internet. For now, creating an electronic mortgage loan is typically a hybrid process in which certain key documents (the note, the security interest) are printed onto paper and physically—or “wet”—signed while other documents are signed electronically.

The eClosing process has numerous benefits. The process helps lenders, even if the lender opts for a hybrid process in which the note and security instrument are wet-signed paper documents. A hybrid eClosing procedure still enables lenders to realize operational efficiency and improve the borrower experience by reducing the number of physical signings and the time spent at the actual closing table. eClosings offer tremendous benefits for the environment, as well, by reducing paper usage to save trees and reducing CO2 emissions by eliminating the shipment of physical documents.

eClosings could also improve privacy and protection of private borrower information. For example, right now title companies and closers handle multiple documents that contain Social Security numbers, birthdates, employment information, phone numbers and other private data. These paper copies are then shipped and handled by people at all levels of the process. With an eClosing, documents containing detailed personal information—such as the 1003, IRS 4506 and W9—could be accessed by the borrowers through a secure interface, keeping this information between the lender and the borrower without any need for third parties to obtain or store this information. Moreover, software can maintain an audit trail of those who access the information and restrict information to those who have a bona fide need to view it.

Click here to read the full version of this article, which originally appeared on GlobeSt.com sister publication, ALM's law.com. Rachel D. Jaffe, author of this article, is vice president and senior counsel at OneTitle National Guaranty Co.