Hybrid Closing and the Notary

The Hybrid Closing and the Notary

The hybrid closing is something a few notaries are starting to be affected by.

As the move to online closings takes baby steps, the hybrid closing is a new trend to take a look at.

Are they the future of the industry, or just a stop gap on the way. With the slower than projected growth of remote online notarizations (we’ll have more on that soon), hybrids are starting to emerge.

What is a Hybrid Closing?

A hybrid closing is one in which part of the closing is done remotely, while another part is performed in person.

The banks are looking towards them as a way to split the work done in the closing.

So here is how it works.

A closing package is composed of several files that need to be notarized. They can all be done in person, but they don’t have to.

For example, in attorney states, under the temporary rules in place, some closings are now being done with some docs remotely, while other documents that require an attorney are done in person.

New York state is the leader in this right now, but it is still in its infancy.

Will This Only Affect Certain States?

Truthfully, right now we are not sure. We only know that a few of the large lending institutions are giving it a try. Only the future holds how much of this will potentially affect the industry.

We do know that lenders put more weight behind certain documents than others. The law in many states does as well. So, those documents are being split under the hybrid closing model.

Since the laws right now are so disconnected across the country, and many are only temporary because of COVID, it is tough to tell where this will spread to.

Does That Mean Two Notaries for One Closing?

For some closings, yes.

And we think that the messiness of these closings will be one factor that decides the future of the hybrid closing model.

Are two notaries for one closing a good idea? A good part of us says it is not. One set of documents. Two notaries. A lot of room for error there.

What if you have an experienced and professional notary for one part of the transaction, and a not so good notary on the other end. It could potentially create a bit of chaos in a lot of ways.

However, that does not mean it will not happen.

If the rewards outweigh the risks, large lenders will follow.

Can the Same Notary do Both Parts of the Hybrid Closing?

There is no reason not.

As many of you know, we now offer online notaries. Some of you are already signed up with us for those services.

We all have to change with the times. And while online notarizations only represent a tiny fraction of our business right now, the fact is that they probably won’t several years from now.

Look, we all have to embrace and adapt to change. The notary industry, and every other thing in our life, is constantly changing. You either change with the times or get left in the dust.

Might it be our preference to find an online notary close to the physical part of the signing? We think so, but to be honest, it is too early to tell. We are looking at a very new and emerging topic here.

What Does This Mean for My Business?

In the short term, probably not much. But, we like to look ahead, and you should, too.

It is best to be out in front of the market. To be ready if and when the next trend comes down the pipeline. To be ready to jump on new trends before our competitors.

This is the best reason why performing a hybrid closing needs to be on your radar.