CHCP Technology & Digital Closing Platforms 2 — Questions and Answers
Question 1: Which federal regulation establishes standards for electronic signatures and records in real estate transactions?
- RESPA
- ESIGN Act (Correct answer)
- TILA
- FIRPTA
Correct answer: ESIGN Act
The Electronic Signatures in Global and National Commerce (ESIGN) Act of 2000 grants legal validity to electronic signatures and records in interstate commerce, including real estate closings.
Question 2: In a digital closing platform, what is the purpose of a 'wet signature requirement' flag on a document?
- It tracks documents signed under notarization
- It identifies documents that still require a handwritten ink signature (Correct answer)
- It marks documents with watermarks for security
- It indicates a document has been digitally certified
Correct answer: It identifies documents that still require a handwritten ink signature
A wet signature flag identifies documents that cannot be executed electronically and must be signed in ink, often due to lender or jurisdictional requirements.
Question 3: What does 'eNote' refer to in the context of digital mortgage closings?
- An electronic appraisal report
- A digitally signed and registered promissory note (Correct answer)
- An encrypted lender communication
- An electronic title commitment
Correct answer: A digitally signed and registered promissory note
An eNote is an electronic promissory note that is digitally signed and registered on the MERS eRegistry, making it transferable as a negotiable instrument.
Question 4: Which system serves as the national electronic registry for eNotes in US mortgage transactions?
- MISMO
- ALTA
- MERS eRegistry (Correct answer)
- FNMA eMortgage Portal
Correct answer: MERS eRegistry
The MERS eRegistry is the legal system of record that tracks ownership and transfers of eNotes, ensuring their enforceability as negotiable instruments.
Question 5: When a closing platform uses 'role-based access control,' what does this mean for a settlement agent?
- The agent can access all transaction files regardless of assignment
- The agent's document access is limited to their defined role and assigned transactions (Correct answer)
- The agent receives automatic notifications for all closings in the region
- The agent can modify any document in the system
Correct answer: The agent's document access is limited to their defined role and assigned transactions
Role-based access control restricts platform access so users only see and interact with documents and transactions appropriate to their function, protecting sensitive borrower data.
Question 6: What is the primary advantage of a 'hybrid closing' compared to a fully paper closing?
- It eliminates the need for title insurance
- It allows some documents to be signed electronically before closing, reducing in-person time (Correct answer)
- It removes the requirement for a notary
- It bypasses lender underwriting requirements
Correct answer: It allows some documents to be signed electronically before closing, reducing in-person time
In a hybrid closing, borrowers pre-sign eligible documents electronically before the closing appointment, shortening the in-person session and improving the borrower experience.
Question 7: Which data standard does MISMO promote to ensure interoperability between digital closing platforms?
- JSON-LD
- MISMO XML/ULAD (Correct answer)
- PDF/A-3
- ISO 20022
Correct answer: MISMO XML/ULAD
MISMO (Mortgage Industry Standards Maintenance Organization) develops XML-based data standards and the Uniform Loan Application Dataset (ULAD) to enable systems from different vendors to exchange mortgage data seamlessly.
CHCP Technology & Digital Closing Platforms 2
Which federal regulation establishes standards for electronic signatures and records in real estate transactions?