An eSettlement or eClosing is a real estate closing for which documents are created, signed and stored electronically rather than using traditional paper documents. In other words it is a "paperless" settlement. At these closings the Borrower executes an eNote rather than a traditional paper promissory note signed with a wet ink signature.

Many individuals have actually been exposed to eTransactions when they sign credit card receipts on an electronic signing pad or click a checkbox to agree to the terms of a website condition. In this case the settlement is performed on a tablet notebook computer, on a traditional PC with a signing pad, in a "click and close" format utilizing a mouse, or a combination of all of the above.

All parties to a transaction including the Borrower, Lender and Originator benefit from the efficiencies created by the streamlined process of a paperless transaction. The Borrowers experience is improved by reducing the time needed to close and the passage of savings in to lower closing costs.

Finally the secure storage of all closing documents allows the Borrower to access copies of the transaction at any time in the future. When a settlement is performed electronically there are three primary areas of increased efficiency. First, all signature errors and missing document errors are eliminated.

The software recognizes missing signatures or documents at the settlement table prior to completion of the closing. Second, when paperless documents are signed and submitted electronically they automatically become part of a tamperproof digital package which always remains together in the proper order. Finally, paperless closing documents are immediately transmitted and stored electronically which eliminates the need to make multiple copies and ship the copies to all the parties involved in the transaction.

On the Federal level, Congress enacted the Electronic Signatures in Global and National Commerce Act (E-SIGN) on June 30, 2000. Also the Uniform Electronic Transactions Act (UETA) was developed in 1999 by the National Conference of Commissioners on Uniform State Laws.

Most states have adopted laws based on this Act. Together E-SIGN and UETA ensure the validity, legal effect, enforceability and transferability of contracts executed electronically.

An eNote is the electronic equivalent of a negotiable paper promissory note. It is created, signed, and stored as an electronic document in an electronic vault (eVault), usually in the form of a SMART Document.

A SMART document locks together data and presentation in such a way that it can be system validated to guarantee the integrity of the document. SMART is an acronym for Securable, Manageable, Achievable, Retrievable, Transferable document.

Electronic Vaults were created to store eNotes. An eVault is a transferable records management solution that meets all legal requirements and industry standards.

A Tamperseal is a "seal" that wraps around an electronic document that has been digitally signed. It is a security tool that will provide evidence of any changes made after it is put in place.

As defined by MERS, it is an industry utility that serves as the central location to identify the current Controller (holder) and location (custodian) of the authoritative copy of an eNote. The Controller of an eNote has the same rights as that of a Holder in Due Course with a paper negotiable promissory note.