The prevalence of digital technology, the trend to reduce paperwork, the goal to save time and money and the need to increase security have converged in the growth in e-notarizations. And the momentum is growing. National organizations are increasingly endorsing e-notarizations and remote notarizations, and their uses are spreading.
All states are authorized to accept some form of e-notarization in conformance with the Uniform Electronic Transactions Act (UETA) which was approved in 1999 by the National Conference of Commissioners on Uniform State Law (NCCUSL) as an overlay statute to help reconcile conflicting state laws. The Electronic Signatures in Global and National Commerce (ESIGN) Act was passed in 2000 by the federal government and grants legal recognition to electronic signatures and records if all parties to a contract choose to use electronic documents and to sign them electronically, and it also supports e-notarization.
Montana and Virginia take it a step further and recognize what many consider the norm for the future: remote notarization via webcam technology. And Virginia notaries can remotely notarize documents for signing parties located anywhere in the world.
Last summer, Fannie Mae, Freddie Mac and Quicken Loans endorsed remote notarization for their mortgage closings. This was quickly followed by the Uniform Law Commission (ULC) approving an amendment to the Revised Law on Notarial Acts (RULONA), which allows notaries in an enacting state or jurisdiction to perform remote notarizations for signers outside the U.S. for certain documents. The ULC also approved a drafting committee for an amendment that would allow remote notarizations for signers in the U.S.
More recently, conference attendees at the Electronic Signature and Records Association, considered the world's premiere event on all issues surrounding electronic records and signatures, voted unanimously in support of promoting remote notarization. In addition, there are numerous states with bills currently in legislation for remote notarization or face-to-face electronic notarization.
2017 will be a “landmark year” for e-notary momentum, according to Marc Aronson, president and CEO of the Pennsylvania Association of Notaries (PAN). Aronson recently spoke with Electronic Signatures and Records Act (ESRA) Vice-Chair Rich Grisham on the ESRA internet radio network about e-notarization’s momentum. “It will have that snowball effect. Once it rolls down the hill, it will get bigger and bigger. Once we get started, more states will come on,” said Aronson.
E-notarization adoption, particularly remote notarization, is poised to gain even more traction in 2017.
Notarization changes with the times
The concept of notarization has been around since Shakespeare, but until about 10 years ago, the notarization process had changed very little. In 2006, the first step was made toward a more cost-effective and less paper-reliant notarization process when The National Association of Secretaries of State (NASS) developed standards for e-notarization. Offered to states for voluntary adoption, the standards allowed documents to be notarized digitally and signed with e-signatures. That process, however, while electronic, still requires the signer to physically appear before the notary.
Remote notarization takes e-notarization a step further by using modern technology to expand the definition of “in the presence of” the notary, which is a foundational requirement of notarization in all state laws. In 2012, Virginia became the first state to permit the performance of notarial acts online by means of real-time audio-video conference technology. While “in the presence of” had been traditionally interpreted as meaning “physically in the same place,” some forward-thinking states and organizations have recognized that technology allows people to be virtually in the presence of each other without requiring physical proximity.
A remote notarization includes all the formalities of a traditional paper transaction, except that the notary and the signer are linked together by real-time, audio-video communications. That means signers and notaries have the freedom and convenience to complete transactions from wherever they happen to be, and the capability is revolutionizing many industries. Plus, the process is actually more secure and legally defensible than wet ink signatures, thanks to authentication methods and audio-video recordings.
Remote notarization a hot topic for national organizations
Several influential organizations have demonstrated their support of remote notarization technology, including the groups outlined below.
National Notary Association
The National Notary Association (NNA) made remote notarizations a topic of their annual conference this past summer, which included sessions like, "What’s the Latest with Remote Notarizations." To help state legislators and policymakers regulate the use of electronic signatures by notaries, the NNA has published their Model Electronic Notarization Act of 2017. Drafted by the NNA and reviewed by a panel of legal professionals, state officials, law enforcement, technology providers, industry leaders and notaries, the Model Act addresses key legal and technical issues of both e-notarization and remote notarization.
National Association of Secretaries of State
Remote notarization was also a noteworthy topic at the 2016 National Association of Secretaries of State (NASS) annual conference last July. While they are technology-neutral, the NASS E-Notarization Standards (originally created in 2006 and updated in 2011), still include a physical presence requirement. The merits of virtual presence were discussed, and ongoing discussions are addressing the potential validity and interstate recognition of remotely notarized documents. A NASS task force is studying remote notarization technologies, developing proposals regarding webcam usage and further discussing whether the “personal presence” requirement requires actual physical presence.
Electronic Signatures and Records Association
The Electronic Signatures and Records Association (ESRA) supports and encourages the nationwide adoption of e-notarization laws, regulations and standards. The ESRA Public Policy Committee has launched an outreach program to all 50 states, their attorneys general and their state notary authorities to educate them on e-notarization and that the lack of it impedes the modernization of the mortgage industry. In states without e-notary laws, the program informs decision makers that a separate law isn’t necessary to enable e-notarization. ESIGN and UETA are both over 16 years old, and they provide a national infrastructure for the legal validity of electronic signatures.
Mortgage Bankers Association
At the September 2016 Mortgage Industry Standards Maintenance Organization (MISMO) meeting, the Mortgage Bankers Association (MBA) hosted a roundtable discussion session on remote notarization. The MBA is also hosting a series of webinars this summer on the opportunities and challenges in the e-mortgage space, which includes e-notarizations and remote notarizations.
American Land Title Association
In February, the American Land Title Association (ALTA) sent a letter to the National Association of Secretaries of State (NASS) offering to help promote the understanding of remote notarizations. In the letter, ALTA offered eight suggestions to help guide the development of clear statutes, regulations and standard practices that authorize and recognize remote notarization.
Public Records Industry Association
Electronic notarization was a topic at the Public Record Industry Association’s (PRIA) annual conference in 2016 and will once again be on the agenda for their meeting in August. The organization, which promotes national standards and best practices for the property records industry, has been educating its members on developments in e-notarization and recently approved a paper on “eNotary Frequently Asked Questions" that was 12 months in the making.
As knowledge of this digital process expands and widespread acceptance of e-notarization grows across industries, we can expect to see e-notarization and remote notarization become more prevalent, especially in the mortgage industry. E-mortgages were a hot topic at December’s Digital Mortgage Conference in San Francisco, and attendees watched a live demonstration of documents signed electronically before a notary signing agent who was 3,000 miles away. The call for consumer-friendly digital mortgages is driving the need for remote notarization, and the e-mortgage space, just like the technology, is adapting to meet that evolving need.