COVID-19, To all of our Agents, Lenders, Customers and Clients,

To all of our Agents, Lenders, Customers and Clients,

This message is sent as an update on what we are doing for closings within our law firm during the COVID-19 pandemic. We have made some changes as to attendance in closings. Additionally, we discuss here a potential new option to close remotely along with the challenges it might present. And lastly, we note there have been a number of new Governmental Orders which require various levels of staying at home and only allowing essential businesses to operate daily. We believe law firms are considered essential businesses and thus we will continue to operate fully and perform closings with necessary signers, albeit somewhat differently than only one month ago.

Closing Attendance Policies- We continue to be dedicated to doing our best to close all transactions during this time while keeping our customers, staff and attorneys healthy and taking all necessary sanitary measures. For closings, we are requesting that only parties who must sign documents in person attend closing. We also have an array of other ways to close including curbside closings and power of attorney closings. We believe the third party power of attorney is a great option for in person closings, but that option has to be approved by lenders. For agents or other parties wishing to participate in the closings where we have only the signers in the room, we can accommodate this with remote options via video or telephonic only attendance. In an effort to have the shortest amount of time for signing, we have been calling to speak with the parties before closing to go over any documents that we have available in advance, including settlement statements if they have been finalized with the lender in advance of the closing. We urge any party to call our offices and speak with our attorneys to go over their options for closings.

Potential Video Closings- As discussed in our prior emails, Georgia is an attorney state and requires the presence of a lawyer at closing, meaning in person and not via video or on the telephone. The presence requirement is both a rule by the State Bar and a Georgia state law. As of Friday, the prohibition against teleclose options is potentially being suspended which will allow a teleclose option temporarily during this coronavirus crisis. There are two parts to having the teleclose option, one part is for the Georgia Supreme Court to suspend the Rules of Professional Conduct that requires an attorney to be physically present at the closing of a real estate transaction. That part has been accomplished with an order issued by the Supreme Court. The second part to allow lawyers to teleclose is to have the Governor sign an Order allowing remote notarization and witnessing by using a video option to conduct a closing and then witnessing (a second person) and notarizing the documents when they get back into possession of the closing attorney. This second part may come soon and we are ready to do these closings, in this manner, as soon as we hear it is legal and available. Until then, we will continue with the above options for closings, including the power of attorney options that we have discussed in the past, if approved by the Lender in the transaction. However, we believe there may be issues to overcome.

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.

As always, we appreciate each of you out there and want everyone to always reach out to us for questions, for accommodations, for just about anything.

Our thanks,
O’Kelley & Sorohan