Using Remote Online Notarization In Response To COVID-19
There is no doubt that by now we have all encountered many challenges working and sustaining business during the pandemic. Mortgage lending, particularly, has faced numerous unique challenges, one of which is the access to the notary services required to close loans. With social distancing restrictions in place and personal safety concerns, in-person notary services are virtually an impossibility. While remote online notarization (“RON”) is not a new concept, its implementation has gone from tortoise pace to hare virtually overnight in response to COVID-19.
While it is important to note that RON requirements will vary greatly from state to state and prior to engaging in any RON activity, one must be sure to verify each state’s requirements. Generally, you can expect to find variations of the following six (6) requirements:
- Use video conferencing technology. Under ordinary circumstances, applications like Zoom, Microsoft Teams, and FaceTime are not permitted and specific RON platforms must be utilized; however, we are not in ordinary times and, as a result, some states are allowing these applications to be used for the time being. Care should be taken to verify which platform is acceptable in your state.
- Verify the identity of the person executing the record. Each state is free to prescribe how it would like this process to take place, but most are utilizing some combination of the notary’s personal knowledge, third party services, documentation such as a photo identification (i.e. passport or driver’s license), together with other documentation like utility bills or voter registration cards that match the photo identification, or affidavits.
- Confirmation of the record. The notary must be able to confirm that the record in front of the notary is the same record that is in front of the individual executing the record.
- Recording. The notary must create and retain a recording of the video conference. Retention times are dictated by the state.
- Certification. The notary must indicate the use of communication technology in the certificate of notarial act on the record.
- Notification. Many states require the notary to notify the state in advance of his or her intent to engage in RON.
RON laws come in two forms: permanent RON laws and emergency RON authorizations that have been put in place in response to the pandemic. The emergency RON authorizations are temporary and will expire at some point in the future as set forth in the authorization itself. As of the date of this writing, all but eight (8) states have permanent RON laws and/or emergency RON authorizations. Of the remaining eight (8), most have legislation that has passed awaiting governor signature or additional guidance to become effective.
Fannie Mae has stated that it will accept delivery of loans that have been remotely notarized if the laws and regulations of the state in which the mortgaged property is located either expressly permit the use of remote notarization or expressly accept remote notarizations performed out-of-state in accordance with the laws of the state in which the notarial act is performed. Requirements for remote notarizations are detailed in the Selling Guide and in the Lender Letter published on March 31, 2020 (LL-2020-03). The remote notarization policy and requirements include minimum technology standards and other terms and conditions that lenders should be aware of when delivering a remote online notarized loan. Similarly, Freddie Mac has stated it will accept delivery of loans that have been remotely notarized and has issued guidance in Bulletin 2020-8.
RON was created to streamline transactions and improve efficiency, but now it is finding a place to protect the health and safety of all parties to a loan transaction. If you have questions about whether or not a RON law has been enacted in your state, please contact Amanda Smith.