California Mortgage Finance News, Fall 2019

Evolving with Technology and Remote Online Notarization FEATURED RESIDENTIAL T echnology is rapidly evolving in all facets of life. Groceries are ordered on demand and sent to your house, cars are available by SAMANTHA BUDZYN,

Even though electronic signatures have been federally legal since the adoption of the ESIGN Act in 2000, eClosings in the mortgage industry have been slow to follow.

to take you virtually anywhere with the tap of a button and you can go through the entire mortgage process online. Well, the entire process except for closing, that is. Unfortunately, the mortgage closing process has remained essentially the same for many years—until now. Through the adoption of electronic closings (eClosings), the settlement industry has the ability to evolve. eClosing is a broad term that encompasses multiple types of closings: 1. In Person Hybrid • Signing occurs in person • Documents which don’t require notarization are electronic and eSigned • All notarized documents are wet signed and notarized on paper 2. In Person eNotarization (IPEN) • Signing occurs in person • All documents are electronic, eSigned and eNotarized 3. Remote Online Notarization (RON) • Signing occurs remotely in real time via two-way, audio-visual connection • All documents are electronic, eSigned and eNotarized • Multifactor ID verification occurs through knowledge-based assessment in addition to ID inspections

Director of Special Projects, Amrock


RON first became legal in Virginia with the passage of the Electronic Notaries Act in 2011. Since then, RON has seen widespread adoption by states in the past two years. Prior to 2017, RON was only expressly legal in Virginia and Montana. Since then an additional 20 states have passed RON legislation, bringing the total to 22. There are a few different approaches the industry is taking with the adoption of RON. The first is a fully executed closing involving RON and a borrowing client executing their documents, including the eNote. The others are variations on which documents are signed and by whom. For example, many companies who are completing RON closings are starting with non- mortgage (cash) transactions or offering RON to the seller while still completing the borrower’s closing traditionally via paper as a way to gain experience with these types of transactions and learn how they move through their workflows. So how many are truly being completed? With full eNotes, industry adoption still lags behind legislation. However, many are willing and INDUSTRYADOPTION

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