RON In Real Estate Closings Five years ago, few lenders were eager to add untested remote online notarization to loan document signings. But as more companies successfully tested pilot programs for eClosings using RON, confidence in the process grew, and companies began to see the benefits RON brought to borrowers, eliminating the need for lengthy travel to an office for a loan signing and enabling signers unable to travel long distances to complete real estate transactions through remote technology.
“It’s very much a consumer-friendly thing,” said Rick Hill, Vice President of Industry Technology with the Mortgage Bankers Association. “If you’ve ever closed a loan, historically you have to go to someone’s office to sign all of your documents. With remote online notarization, you no longer have to do that. For example, let’s say that a husband and wife are trying to close on loan, but the wife is serving in the military in another state or country. Previously, the wife would have had to jump on a plane and come home to sign the documents. With RON, they are both able to participate in the closing in a way that was just not possible before.”
However, 2018 and 2019 saw a significant increase in electronic closings. More than half of all loan applications in the past two years included an online or mobile component, according to information published by FISERV. Mortgage Electronic Registrations Systems (MERS) reported that 127,178 eNotes (paperless records of electronic mortgages) were registered in 2019. MISMO®, the mortgage industry’s standards organization, recently announced a new RON certification program for RON providers and mortgage industry participants to increase adoption of RON-enabled mortgage closings.
“Sometimes only part of the process is performed electronically, or you may be signing all your documents electronically with a remote Notary,” Hill said. “In the past year and a half, we’ve migrated from a very small number of electronic closings to 15,000-16,000 eClosings each month, and RON is being used in many of those transactions.”
RON Reduces Errors And Paper Costs In Loan Closing Documents Another reason RON is gaining popularity is because it reduces document errors during a loan document signing.
A mistake or missed signature on paper loan documents can sometimes go unnoticed until after a signing. With remote online notarization, if required information is accidentally left blank or incorrectly entered, the system will not allow the notarization to be completed until the errors are corrected.
“Errors are a huge hidden cost, and resolution of those errors is also costly,” Hill said. “There are companies with whole departments that solely deal with post-closing error issues. All those costs — from fixing errors and chasing down why information is incorrect — start to go away with RON.”
The reduction of document errors using RON also helps Notaries, Hill said, because they do not have to go back to visit the signer to correct errors or obtain missing signatures on loan documents.
Also, because real estate and mortgage transactions require printing and distributing dozens or even hundreds of pages of paper documents at a time, use of RON provides a significant savings in printing and other paper-related costs, said Pem Guerry, Executive Vice President with RON technology provider SIGNiX.
“Even for smaller companies, copying and distributing multiple copies of hundreds of pages of paper is a huge cost,” Guerry said. “RON means faster and generally less expensive transactions for signers.”
Notaries benefit because of the additional security procedures used for RON, Guerry added. “Instead of being stored in a briefcase or file cabinet, the documents are encrypted and stored electronically. You can prove there has not been a single change to the document of any kind with RON,” he said.
By David Thun on April 15, 2020 in Remote Online Notarization
When it comes to remote online notarization (RON), there is one question Notaries ask more than any other: How do you identify a signer who can be hundreds or even thousands of miles away while the notarization takes place? The answer depends on your state’s laws — and the technology platform being used to perform the notarization.
Can Traditional Identification Be Used For RON?
Many states that have permanent RON statutes and rules allow Notaries to identify a remote document signer using two traditional methods of identification used in paper notarizations and one new method unique to RON. These methods are personal knowledge, a credible witness, or a multi-part identity verification process.
Some states such as Virginia, Nevada, Kentucky and Michigan allow Notaries to use personal knowledge to identify a signer during a remote online notarization. Kentucky and Michigan also allow a RON signer to be identified by a credible identifying witness. In Michigan, the credible witness must personally know both the Notary and the signer (MCL 55.285). While personal knowledge and a credible witness may be used to verify the identity of a signer for a RON in many states, these states typically do not allow a signer to produce the third, most-used type of traditional identification in paper notarizations: a single identification card or credential. Instead of allowing the signer to be identified by simply showing their driver’s license or passport, these states require the signer to pass a multi-part identity verification process. In some states, this is called “identity proofing.”
RON Identification Process
Since most experts believe it is inherently insecure to allow a signer to be identified for a RON merely by flashing an identification card on camera, many states have devised an alternative process to verify a signer’s identity that is aimed mitigating the risk of imposters standing in during a remote notarization. Some states that permit RONs require the signer to successfully pass all three of the steps described below while others require a minimum of two.
Remote ID Presentation
For a remote ID presentation, the signer must show an identification document to the Notary on camera so the Notary can read the information on the ID. The ID presented to the Notary must meet state law requirements — for example, Florida law states that the signer must remotely present a government issued identification credential to the Notary (FS 117.265). Remote ID presentation mirrors the traditional means of a signer showing their ID to the Notary for a paper notarization, but as we will see the process doesn’t stop there.
For a credential analysis, the RON technology platform will use an automated process with sophisticated algorithms to verify the security elements and information on the ID presented by the signer during remote ID presentation. The Notary will request the signer to allow the system to take a picture of the signer’s ID and transfer the image for credential analysis. If all information and security elements are present, the ID will pass. The credential analysis must comply with state standards — for example, in Texas any credential process used by a Notary for RON must be approved by the Secretary of State’s office (GC 406.101 and 1 TAC 87.1). Before you choose a RON provider, you should confirm their system meets your state’s RON requirements.
Knowledge-based authentication (KBA) requires the signer to answer a series of computer-generated questions based on the signer’s personal history, credit and financial information. These are questions only the signer reasonably could be expected to know. For example, the signer might be asked to identify among 5 choices their mortgage balance at the end of last month or an address where they have lived.
The signer must correctly answer a certain number of these questions in order to be positively identified. For example, in Utah, a signer requesting a RON must correctly answer a minimum of 4 out of 5 KBA questions (80%) in under 2 minutes. Each question must have at least 5 possible answers (UAC R623-100-5[C]). If the signer fails the first test, the signer may retake the KBA twice within 48 hours, and each of the retakes must replace 2 of the 5 questions in the previous exam. If the signer fails the second retake, the Notary must not perform the RON.
Emergency RON ID Requirements
In response to the COVID-19 pandemic, many states have temporary emergency online notarization with identification requirements in effect that may be different from the ones described in this article. If you are commissioned in one of these states, be sure to follow all emergency rules that are contained in your state’s temporary order. Also remember that most of these emergency rules will be cancelled once the pandemic emergency is over.
David Thun is an Associate Editor at the National Notary Association
Here are the steps to Remotely Notarizing Your Documents
The signer contacts the Notary or a RON service provider to request a remote online notarization. We use http://DocVerify.com
The signer’s document is sent to the Notary so it can be signed and notarized. Typically, the document is uploaded in an electronic format such as PDF to the online technology platform used to perform the notarization.
The signer’s identity is screened according to the requirements of the Notary’s commissioning state. This may include answering questions based on the signer’s personal and credit history (KBA), verifying the signer’s identification documents online (credential analysis), the Notary remotely viewing the signer’s ID during the notarization, or other methods set by statute.
JT Mobile Notaries uses a platform which uses KBA for ID verification which is a higher level required by the State of Nevada.
During the remote online notarization, the Notary and the signer communicate online using audiovisual technology — via webcam. The Notary and signer do not meet face to face.
Once the signer’s identity has been verified and all other requirements for the notarization have been completed, both the signer and the Notary must sign the document and the Notary’s seal attached. For electronic documents, this requires electronic signatures and an electronic version of the Notary’s seal.
The Notary records any required information for the Notary’s journal records. The Notary must typically also retain an audio and video recording of the notarization session.
The remotely notarized document is returned to the signer by email from DocVerify and the notary. We will also email completed documents to your legal representatives,
David Thun is an Associate Editor at the National Notary Association.
U.S. Treasury Secretary: Signing Agents Are Part Of ‘Essential Services’ During COVID-19 Emergency By David Thun on March 24, 2020
U.S. Secretary of the Treasury Steven Mnuchin issued a statement this week clarifying that all workers — including Signing Agents and mobile Notaries — who provide services in the nation’s financial and other essential critical infrastructure may continue to perform their duties. At the same time, Notaries must still follow all guidelines issued by federal, state and local authorities to protect public health, maintain appropriate safety precautions and should not accept assignments if there is risk of spreading the COVID-19 coronavirus.
The federal guidance was welcome news for Signing Agents during the critical end-of-the-month period when most mortgage loans are closed and signing agents are in high demand.
In his letter dated March 22, Secretary Mnuchin clarified that workers in critical sectors of the financial industry — including workers and key third-party service providers for “settlement services,” such as Notary Signing Agents — should be allowed to continue normal operations and work schedules.
“These individuals are critical to maintaining safe and efficient financial services and ensuring citizens have access to these services that are necessary to conduct their daily lives,” Mnuchin wrote. “If you work in a critical infrastructure sector, as defined by the Department of Homeland Security, you have a special responsibility to maintain your normal work schedule.”
However, he added, essential workers must also comply with guidelines issued by organizations such as the Center for Disease Control, state and local officials to protect public health. Notary Signing Agents should check official sources and their contracting parties to stay informed about any guidelines in place in their area, and only accept assignments that comply with these official health safety instructions. When on assignment, Signing Agents should continue to follow recommended COVID-19 health and safety precautions.
The Notary Bulletin will continue to provide critical updates on changes to notarial practices procedures as they occur amid the COVID-19 crisis.
Notarization used to be simple: the signer appears before the Notary with a signed paper document; the Notary identifies the signer; the Notary completes the notarization, signs with an ink pen and affixes a physical seal impression.
It’s not that simple anymore.
Today, Notaries in many states are authorized to notarize electronic documents, sign with a signature pad or by clicking a button on a computer screen. Notarizations can not only be done without paper (aka “In Person Electronic Notarizations” or “iPEN”), but states permitting remote online notarization(aka “RON”) even authorize the Notary and signer to interact remotely while hundreds or even thousands of miles apart.
As technology plays an increasingly important role in notarizations, many states are requiring Notaries to obtain and use electronic signatures, electronic seals and digital certificates in order to perform iPENs or RONs. But if you aren’t deeply versed in tech-speak, understanding what these different tools do, how to use them and how to make sure they comply with your state’s Notary laws can be extremely confusing. In this article, we’ll look at three tools used for paperless notarizations — electronic seals, electronic signatures, and digital certificates — explain what they do and answer some of the most confusing questions they raise for Notaries.
Electronic Notary Seals
Of these three types of electronic tools, an electronic seal is perhaps the easiest to understand. Basically, an electronic seal serves the same purpose for electronic documents that an ink seal or embosser does for paper — it shows the document was notarized and provides information about the Notary who did it.
Depending on individual state laws, an electronic seal could take different forms. It might be an electronic image such as a JPEG, PDF or other file format. But in general, the seal must include similar information to a physical seal. When a notarized electronic document is opened, information about the Notary contained in the electronic seal should be readily visible to the person viewing the document.
“What we specify is that the electronic seal must look virtually the same as a tangible, physical seal when viewing an electronic document,” said Lori Hamm, Notary Program Specialist with the Montana Secretary of State’s office. Hamm added that Montana lawmakers wanted to make sure that anyone viewing a notarized electronic document could easily see that the document has been notarized.
Just as with traditional seals, a Notary must take steps to secure the seal and make sure no one else can access and use the seal without the Notary’s knowledge. Some Notaries keep their eSeal stored on an approved technology platform’s server accessible only with the correct password. Others might choose to store the seal on their personal computer’s hard drive. However the eSeal is stored, it needs to be protected. “Electronic seals follow the same rules and guidelines as physical seals in terms of issuing and securing them,” Hamm said.
Notaries And Electronic Signatures
Just as an electronic seal is the equivalent of a physical ink stamp or embosser, an electronic signature serves the same function as the Notary’s handwritten signature. An electronic signature can take many forms — an image of a handwritten signature affixed to the document, a signature created by writing on an electronic signing pad or even just clicking an “Accept” button on a computer screen.
“It’s easiest if you think about what Notaries do in the paper world first. The same logic applies to the electronic means for performing a notarization,” said Tim Reiniger, an expert on information governance law and policy and the director of Timothy Reiniger LLC in Cape Elizabeth, Maine. Just as a handwritten signature and physical seal indicate that a traditional pen and paper notarization was completed and legally establish the genuineness of the underlying document, when an electronic document is opened, the recipient sees the Notary’s electronic signature and seal information attached to the document and knows it can be legally relied upon in court or for government filing purposes.
However, a significant difference between paper documents and electronic documents is that it is much easier for someone to alter an electronic document undetected. An eDocument’s text can be changed in seconds, and many people even have the capability to alter, add or remove images from an eDocument easily using software widely available to the public. So how can someone know if a notarized electronic document has been tampered with? That’s where digital certificates come in.
Notaries And Digital Certificates
Digital certificates are perhaps the most important — and most confusing — tool used for electronic notarizations. A digital certificate doesn’t have a true equivalent in the traditional world of paper notarizations.
Despite the name, a digital certificate has nothing to do with Notary certificate wording. Though digital certificates are sometimes called “digital signatures” they are different from the electronic signatures described above.
A digital certificate performs two key functions — it verifies the identity of the Notary who affixed the electronic signature and seal on the notarized document, and it makes the document “tamper-evident.” Once a digital certificate is applied, if anyone attempts to alter the document’s contents, the Notary’s electronic signature, or the Notary’s electronic seal, the document will clearly indicate to anyone that opens it that changes have been made since the notarization was completed. A digital certificate is normally the last tool used when notarizing an electronic document, after the Notary’s electronic seal and signature are applied.
“People often think everything related to a document is visual, but a digital certificate is not,” said Darcy Mayer, chief technology officer for DocVerify, a remote online notarization technology provider. “It’s the cryptographic portion of a document that’s there, but not visible.”
Digital certificates are normally issued by a trusted issuing authority for a limited period of time and must be periodically renewed over a period ranging from 1 to 5 years. For example, digital certificates are renewed either after 1 year or 3 years, which is standard for the ID technology industry, and meets the requirements for all states that authorize RON.
If a Notary needs a digital certificate to perform iPEN or RON notarizations, the Notary can obtain a digital certificate directly from the trusted issuing authority. Notaries can also obtain digital certificates through authorized vendors such as the NNA or through remote notarization technology providers such as DocVerify, which provides and maintains digital certificates for Notaries who use their platform to perform remote online notarizations.
“In our case, we (DocVerify) take on the onus and maintain the digital certificate securely with password protected access for the Notary,” Mayer said. “Our employees can’t access or decrypt the files. We take on the responsibility to secure it for the Notary.”
While it’s possible for a Notary to obtain more than one digital certificate, Mayer said a single digital certificate can be used across multiple notarization technology platforms, so it’s simpler and more secure for a Notary to use only one. Also, some states, such as Texas, require Notaries to upload their digital certificate to a state web portal so officials can verify it, and only one digital certificate can be associated with each remote Notary commission application, said Robert Sumners, director of Government Filings with the Texas Secretary of State’s office.
Remote online notarization is still evolving in many states, and therefore the requirements for using digital certificates and other technology for iPEN or RON may change in the future. But for now, if Notaries have questions they can contact the NNA, their state Notary agency or a technology provider they are signed up with for assistance.
David Thun is an Associate Editor at the National Notary Association.
Traditional Notarization, IPEN and Remote Online Notarization: How They Work
Requires a physical paper docu- ment with an original written signature.
The document must be in an electronic format such as a PDF or Word file. A paper document would need to be converted to a suitable electronic format prior to the notarization. The document is presented on a computer, laptop or mobile device.
The document usually must be in an electronic format as with IPEN, although some states allow paper documents to be signed and notarized using RON.
The signer and Notary meet face-to-face in person.
The signer and Notary meet face-to-face in person.
The signer and Notary “meet” online and communicate using audiovisual technology such as a webcam.
The signer must personally know or present satisfactory proof of identity to the Notary, typically an identification document such as a driver’s license or one or more credible witnesses who know the signer personally and can vouch for the signer’s identity.
The same identification meth- ods as a traditional notarization
Signers generally are identified through a combination of two or all of the following: knowledge- based authentication (KBA); credential analysis; remote presentation.
The signer signs the paper document in pen and ink. The Notary completes the notarial certificate wording, signs the certificate with pen and ink and affixes an image of their physi- cal official seal.
The customer signs the elec- tronic document with an elec- tronic signature — such as a mouse click or written signature on a signature pad or another electronic process. The Notary signs the notarial certificate with an electronic signature and affixes their electronic seal.
In most cases, the customer signs the electronic document with an electronic signature. The Notary signs the notarial certificate with an electronic signature and affixes their ele
The Notary writes a record of the notarization in a bound, paper journal or in some states, an electronic journal.
The Notary records informa- tion about the notarization in a bound, paper journal or, if permitted by state law, in an electronic journal stored on a computer or other device.
The RON platform creates an electronic journal entry for the notarization. The nota- rization is recorded using audiovisual technology. The Notary must securely store the recording, along with any other journal information required by state law.
THE NATIONAL NOTARY, NOVEMBER 2019
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