The Commercial Paperless Closing: How Close is it?

With the advent, and increasing acceptance, of electronic recording, signatures and notarization, the commercial real estate industry is slowly advancing towards the day when a paperless closing becomes commonplace. Technology has advanced to a stage where lawmakers are comfortable relying on PDF's of deeds and mortgages to evidence the transfer and encumbrance of real property. The so-called mail-away closing has become the industry standard replacing the sit-down closing that traditionally marked the conclusion of a successful transaction. Does the desire, however, to implement electronic measures designed to aid today's increasingly sophisticated borrowers, many of whom are dispersed across all corners of the globe, signal a march towards the replacement of the mail-away closing with a totally electronic closing (an “eClosing”), where even the promissory note will be executed electronically? The eClosing has gained acceptance in the residential mortgage lending industry, but has been slow to develop in the commercial mortgage market.