MortgageTechnology

Remote e-notarization could shape the future of closings

Paperwork done safer, cheaper and easier

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“Simple” and “convenient” are not the first words that spring to mind when you think about the process of closing a real estate sale. In addition to the sheer tedium of signing documents for upward of an hour, there is the challenge of gathering in one place at one time all of the parties to the transaction and having it all formally witnessed and certified by a public notary.

In today’s world, where transactions happen at the speed of light and we can accomplish just about anything with anyone without meeting them in person, there must be a way to make real estate closings more simple and convenient.

And there is. Technology for notarizing documents electronically has been available for years, but the process still requires in-person interaction in most parts of the nation. Things are changing, however. Now, remote, online, e-notarizations are beginning to take hold as a valuable tool for facilitating closings with parties dispersed across the country and the world.

Remote e-notarization is a simple process in practice. It requires a certified public notary, secure e-signature software and video technology that allows all parties to interact in real time and record their interaction. The combination of these three things can allow a jet-setting executive to complete closings while out of the office on business — or allow families living overseas to close on an American home while still abroad.

In 2013, The Commonwealth of Virginia became the first state to allow its notaries to perform e-notarizations online for signers located anywhere in the US or overseas. Interest in this concept is spreading beyond Virginia to such states as Montana, where it’s not unusual for notaries and residents to travel 100 miles to participate in a real estate closing. Even more, the Uniform Law Commission just recently began discussing adding remote notarization authorizing provisions to the Revised Uniform Law on Notarial Acts.

Why are we seeing more interest in remote e-notarizations? There are several reasons:

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Security

Counter to some ill-informed stereotypes, e-notarization strengthens the security and integrity of the notarization process.

In Virginia, for example, e-notarization technology must meet detailed, specific standards that enhance security and integrity. Not only must the notary still witness the signing process through a live audio/video transmission, compliant e-notarization includes the issuance of digital certificates and positive confirmation of signers’ identities — which can be obtained through the most trusted identity authentication method, knowledge-based authentication, in which signers are asked questions about themselves based on information and relevant facts from dozens of public record databases.

E-notarizations also provide notably improved legal evidence and consistency over paper-based notarizations. Not only do you have an audio and video recording of the entire process, regulations for e-notarizations require tamper-evident technology that allows relying parties to detect unauthorized changes. Digital audit trails can also immediately legally record every part of the signing and notarizing process. And with independent e-signature technology, evidence of a signature or notarization is embedded in the documents, so that it is always accessible — online or offline.

Convenience

On-demand e-signatures and notarizations can alleviate the chronological and geographical constraints of closings. It can be challenging to carve out time to travel, and with so many parties involved, it can take weeks until everyone is physically able to meet around a conference room table. For those who travel frequently or live abroad, such as our military serving overseas, real estate closings must be put on hold until long-term arrangements can be made.

Because remote notarization is cloud-based, closings can happen anywhere and anytime there is an Internet connection, and the process only takes a few minutes.

Cost

It’s often said time is money — but so is paper and ink. With the many documents that must be processed in real estate closings, these costs can add up. By working with a paperless platform and reducing the travel time for notaries, remote e-notarization can reduce the costs of closings.

Digital technology has the muscle to change even the tightly held, intensely structured process of closing a real estate deal — so much so that it might not be long until we’re all signing mortgage deeds in our kitchens with a webcam and a cup of coffee.

Timothy Reiniger co-authored this article.

Timothy Reiniger is an attorney specializing in information security and digital evidence, licensed to practice in California, the District of Columbia, and New Hampshire. As Executive Director of the National Notary Association, he contributed a chapter on electronic notarization in George L. Paul Foundations of Digital Evidence (ABA, 2008). Currently, he is Director of the Digital Services Group at FutureLaw, LLC, in Richmond, Virginia and serves as Special Advisor on Digital Identity for the Commonwealth of Virginia.

Email Timothy Reiniger.

John Harris is the senior vice president of product management at SIGNiX, an electronic signature solutions provider that makes signing documents online safe, secure and legal for any business. SIGNiX offers an independently verifiable cloud-based digital signature solution, which combines workflow convenience with superior security. Learn more about what makes SIGNiX different at www.signix.com.

Email John Harris.