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Notary Bulletin

Remote online notarization: Nearing the tipping point

Earlier this year, state evaluation and adoption of remote online notarization was on a gradual, multi-year growth trajectory that looked it would take much of the next decade to become a common service. Then came the COVID-19 crisis, shelter from home orders, and social distancing.

With the crisis now front and center on everyone’s priority list, and uncertainty about what life and commerce will look like in the coming years, states have quickly placed adoption of remote online notarization (RON) at the top of their legislative agendas.

Consider that in the past decade, 25 states have passed permanent laws authorizing some form of RON. That still left Notaries in more than half the states relying exclusively on traditional, in-person interaction when performing notarizations.

But in the last two weeks of March alone more than 30 states implemented emergency RON and "remote ink-signed notarization" (RIN) measures. Some states, such as Washington and Wisconsin, already had RON laws on the books but moved up their effective dates. Other states, such as Pennsylvania and Illinois, gave their Notaries temporary authority to perform them. As of July 2020, California and South Carolina are the only two states that have not enacted any permanent or emergency rules authorizing some form of remote notarization. (Louisiana’s emergency RON authorization expired on May 15, 2020. Permanent RON laws in Louisiana take effect August 1, 2020.)

Without question, remote online notarization is now in the national spotlight. Legislators, industry leaders and Notaries alike are evaluating its value and benefits through new eyes as we approach an unclear, yet certain “new normal” way of life and business. The issue is so important that the U.S Congress is now considering a national RON bill. Senators Mark Warner (D-VA) and Kevin Cramer (R-ND) have introduced the “Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2020” that would authorize remote online notarizations and establish minimum interstate standards nationwide.

RON Offers Workable, ‘Stay At Home’ Solution

The rationale for the emergency RON orders was simple need, as Washington Governor Jay Inslee made clear in his emergency proclamation: “Many professional services require the use of Notary services for a variety of purposes that impact our vulnerable populations, including the need for advanced healthcare directives, wills, deeds of trust, durable powers of attorney for health care … and affidavits of identity for a variety of purposes.”

To follow good social-distancing protocols, remote notarization offered a workable solution to many policymakers, allowing Notaries and signers alike to stay at home. It also has permitted businesses and individual signers to continue to complete crucial transactions during the COVID19 crisis.

Of course, when the coronavirus outbreak reached the United States this spring, many Notaries were understandably anxious about face-to-face contact with potentially contagious signers. The emergency orders help spark a surge in interest in RON among Notaries. In an April 2019 NNA survey, 79 percent of Notary respondents said they were interested in performing RONs during the COVID-19 emergency, and 26 percent said the pandemic had changed how they felt toward RON.

John Kenneth Cole of Virginia, one of the first Notaries in the nation to perform remote online notarizations after Virginia enacted its pioneering RON law, was able to continue serving customers while avoiding physical contact.

“Remote notarizations are ideal for social distancing,” said Cole. “You can’t get sick from someone you interact with via video conference.” Today, he says, there is more demand than ever for his RON services.

Cole wasn’t the only one to see the need for a solution such as RON during the pandemic. With millions of people across the nation ordered by the government to stay home and avoid close contact, suddenly the ability to perform notarizations without requiring face-to-face contact that could spread the COVID-19 virus suddenly became an urgent priority for lawmakers. Remote notarization service providers such as NotaryCam and Notarize ramped up their efforts to recruit Notaries.

But what happens when the “stay at home” orders are lifted? Will businesses and industries that rely heavily on the integrity of notarized documents, such as real estate and mortgage banking, accept this innovative process?

Bill Anderson, NNA’s Vice President of Government Affairs, says it is anyone’s guess whether the temporary RON and RIN authorizations will become permanent. “Weeks ago, RIN didn’t exist, but neither did front porch and drive-by signings, the latter following traditional notarization procedures but keeps the Notary and document signer apart as much as possible.” Anderson also said, “Urgency and necessity are the mothers of invention.”

Across many industries, businesses that may have been leery of remote online notarization before the coronavirus outbreak suddenly had a “stay at home”-friendly option to keep functioning while protecting their employees, Notaries and clients. Once they see how remote notarization can apply to their business models, they may not want to give it up. And that could fuel an accelerated drive for more states to enact permanent remote notarization laws.

At the same time, Notaries must always follow their state’s laws regarding RON. Notaries should never perform RONs unless their state has explicitly authorized it and the Notary has met all requirements to do so. Notaries should never attempt to improvise their own remote notarization procedures without state guidance. RONs should only be performed strictly according to laws and guidelines set by your state statutes and Notary officials.

Where Is RON Allowed In 2020?

The number of states enacting remote online notarization laws has picked up tremendous speed over the past year. Apart from the 25 states with permanent laws on the books, several others are considering bills in their current legislative sessions, including New York, Pennsylvania and Georgia.

The number of Notaries performing RON remains relatively small. Prior to the coronavirus crisis, for example, Minnesota had 616 Notaries qualified to perform RONs. But response to RON has been highly positive, said Minnesota Secretary of State Steve Simon.

“The most important benefits RON has brought us are more freedom and flexibility,” Simon said. “Looking at our increasingly digital world, we definitely anticipate demand for remote notarization to grow in the next few years. It’s received particularly good feedback from the real estate industry, and I think it will catch on in other sectors as more people realize the advantages.”

Simon said the RON implementation process has gone very smoothly, with no serious legal or technical problems. In fact, he said the only notable issue was that some Minnesota Notaries mistakenly believed that becoming a remote Notary was mandatory, not optional. “Since then, we’ve gotten the word out that it’s not required for our Notaries to perform RONs,” he said.

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.

A Place For Traditional Notarization

Some worry that the growing popularity of remote notarizations will put Notaries who rely on traditional pen-and-paper notarizations for their livelihood out of business. Hill strongly disagrees, asserting that the MBA strongly supports traditional notarizations remaining an option for consumers.

“Absolutely, pen-and-paper notarization will remain part of the process. I can’t see a time when that is not an option,” he said. “A consumer who wants a notarization on paper should be allowed to have a notarization on paper.”

But at the same time, Hill said Notaries should be aware that consumers are growing more interested in RON services and that demand is not likely to disappear. “The way I would encourage Notaries to look at it is to ask themselves how do you best serve consumers who want a choice? Paper’s not going away, but RON has such potential for consumer-friendly service that you need to ask yourself if you can ignore it.”

Having seen the growth of RON in Virginia, Cole sees RON as a way Notaries can provide additional services to customers along with more choices, and it provides Notaries with a valuable opportunity to expand their business offerings.

“People always like being able to sit face-to-face with a Notary and have an ink stamp and signature placed on a document before their eyes,” he said. “That said, electronic notarization and RON is only going to become more popular. It allows me to provide a better experience all around for myself and my customers, and that’s what has helped my business grow.”

David Thun is an Associate Editor at the National Notary Association.

Additional Resources:

How To Become A Remote Online Notary

 

 

16 Comments

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Ardel Richter

27 Jul 2020

According to the Arkansas Secretary of State, RON is not permitted in Arkansas: https://www.sos.arkansas.gov/business-commercial-services-bcs/notary-public-and-enotary/#:~:text=Remote%20or%20Online%20Notarization%20is%20not%20permitted%20by,been%20approved%20by%20the%20Secretary%20of%20State%E2%80%99s%20Office. eNotaries still must meet face-to-face with signers.

National Notary Association

27 Jul 2020

Hello. Executive Order 20-12, which took effect March 30, 2020, permits certain specific Notaries such as licensed Arkansas attorneys, licensed Arkansas title agents or Notaries working under the supervision of a licensed AR attorney or title agent, to perform notarizations using real-time audiovisual means. The order permits audio and visual conference technology to replace the physical presence requirement in Arkansas when signing and notarizing paper documents. The signer and Notary must both be located in the state at the time of notarization. You can view the executive order here: https://governor.arkansas.gov/images/uploads/executiveOrders/EO_20-12.__.pdf and read more details here: https://www.nationalnotary.org/notary-bulletin/blog/2020/03/states-emergency-action-remote-notarization.

William Perea

27 Jul 2020

I feel until the lenders come to some sort of agreement on which services to use there are just too many choices and the startup and monthly fee for each one can be costly.

Kim Dills

27 Jul 2020

Can you request a signing to be a RON from a signing company?

National Notary Association

27 Jul 2020

Hello. We would suggest contacting the signing company directly to ask them if this is an option.

Essie Briggs

27 Jul 2020

When will RON for wills and estate planning be available in Florida?

National Notary Association

31 Jul 2020

Hello. We forwarded your question to our Hotline Team and they are not aware of a prohibition against using RON to notarize wills or estate planning documents in Florida, though there are specific requirements for electronic witnessing of a will under FS 732.

Arpana Grace Warren

27 Jul 2020

What, if anything, can CA notaries do to encourage CA to enact RON? As an attorney-notary who does estate planning, I am definitely wanting CA to finally implement it!

National Notary Association

29 Jul 2020

Hello. You should contact your local CA state lawmakers who represent your area to let them know your views and that you support such legislation.

Nanette

27 Jul 2020

Firstly, no one has to jump on a plane anymore to have documents notarized. This is very extreme. I'm a California Notary and fraud is huge in California, thus notarizations. I don't see fraud addressed in the article. Not being familiar with RON or RIN how is one to thoroughly examine an ID to make sure it was not tampered with?

National Notary Association

29 Jul 2020

Hello. Please see this article for examples of how different states are handling identity verification for RON: https://www.nationalnotary.org/notary-bulletin/blog/2020/04/identify-signers-remote-online-notarization

L Clark

28 Jul 2020

I have been looking around for companies that offer RON services In Nevada and it has been difficult to find one. With NotaryCam you have to work for them full time in order to use their RON service. Digital Delivery quoted me a fee of $25 “per transaction”, and that is the fee I’d charge per signature so how would I make money? At this point traditional Notary seem the best way to retain most of your profit. I’d love to add RON to the services I offer however, I want to be to set my own schedule and make a profit at the same time.

Doris Lee

29 Jul 2020

I have been set up for months now to do RON. I did all the costly setups and still have yet to do my first RON. I am very busy with the traditional method. I don’t think a lot of companies are ready. Even though I have been through trainings with a Title company, it has just not taken off yet

L Clark

02 Aug 2020

I have been looking around for companies that offer RON services In Nevada and it has been difficult to find one. With NotaryCam you have to work for them full time in order to use their RON service. Digital Delivery quoted me a fee of $25 “per transaction”, and that is the fee I’d charge per signature so how would I make money? At this point traditional Notary seem the best way to retain most of your profit. I’d love to add RON to the services I offer however, I want to be to set my own schedule and make a profit at the same time.

Arlin cruz

12 Oct 2020

I understand that my signature must match whatever is on my commission but does my first name need to be capitalized on my signature? or can I sign in lower case as long I sign my whole name as it appears on my stamp?

National Notary Association

12 Oct 2020

Hello. To help us answer your question, can you please tell us what state you are commissioned in?

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