Notarization can be understood as the process that is meant to assure parties to a transaction that a given document is authentic. The process involves vetting documents, certifying them as authentic, and even keeping records. For instance, during the process, an impartial duly appointed Notary Public may have to determine if a signature on a given document is genuine and whether the person who signed it acted under duress or intimidation. But what exactly is remote online notarization, and how does it work in the mortgage lending business?
What is Remote Online Notarization (RON)?
As the name suggests, remote online notarization has to do with a notary service that is 100 percent offered online. In other words, the parties of interest do not have to be physically present for them to be served. Therefore, the documents are signed and authenticated through the internet using a microphone and a webcam, among other relevant tools. However, you need to know that remote online notarization services can only be performed by adequately trained and authorized online remote notaries and only in states where it is acceptable under the law.
The fundamental difference between remote online notarization and other forms of notarization has to do with the fact that with RON, the parties signing a document don’t have to appear before a Public Notary in person. Everything is done online through various digital tools. On the other hand, other forms of notarization, including e-notarization, involves the relevant parties appearing before a Public Notary in person even though the documents involved may be in electronic forms, such as PDF.
When is Remote Online Notarization Necessary?
Remote online notarization services are rising in popularity due to their convenience. The services are most useful for parties who cannot travel to another location to sign documents or witness the signing process. Some of such parties include the elderly, the sick, those living far away, and even those restricted to nursing homes. With the outbreak of the COVID -19 pandemic, online remote notarization services have become a necessity as a way of enabling people to apply for mortgages and buy property without breaking social distancing rules meant to prevent or slow down the spread of the novel coronavirus.
How Remote Online Notarization Works in Mortgage Lending
Remote online notarization basically enables parties to a transaction to sign documents from wherever they may be. The process begins with the lender contacting a remote online notarization services provider to request their services. The documents are then sent to the RON services provider in an electronic format. The Public Notary then screens the identities of the parties involved according to the laws regulating remote online notarization in the state. During the process, the Notary and the other parties to the transaction communicate online through audiovisual technologies, such as webcams. Once the parties’ identities have been verified, the parties and the notary have to sign the documents. The notary’s seal must then be attached.
In process of signing a document, there are severe standards that must be met for the transaction to be above board. Some of the general requirements include:
- There must be simultaneous communication between all the parties. In other words, all the parties must be able to hear, see, and communicate with each other when signing the document.
- The signing session must be recorded and saved securely
- The notary must be in their state of operation. Remember that there are also some states where the testator and the witnesses have to be within the state at the time of signing the document.
- All the parties must be able to see the signatures. Therefore, each page must be signed and displayed for the parties to see
Where is Remote Online Notarization Acceptable?
In 2014, Virginia became the first state to allow remote online notarization. Since then, interest in RON has been growing tremendously, and over 20 states have now authorized RON. Some of these states include Arizona, Florida, Idaho, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, Montana, Nevada, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee, Texas, Utah, Vermont, and Washington. The state of Wisconsin approved RON earlier than expected due to the COVID-19 pandemic.
The Bottom Line
Overall, it is apparent that remote online notarization has to do with remotely assuring parties to a transaction that a given document is authentic. This means that the relevant parties get to signs a document without appearing before Public Notary in person. Therefore, remote online notarization services enable people who cannot travel to a Public Notary to sign documents and complete transactions from wherever they are. The RON serves also enable mortgage companies and banks to verify documents submitted by online mortgage applicants. Therefore, if you are a decision-maker in a mortgage company and you would like to start allowing online mortgage applications, remote online notarization services will go a long way in helping you reduce the risk of getting scammed.
