In response to the COVID-19 crisis, many businesses were forced to close their doors and move their operations online. Several federal and state governments moved to quickly enable fully electronic processes and keep the economy afloat.
One such move was the bipartisan legislation known as the Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act of 2020. The SECURE Act authorizes and establishes minimum standards for electronic and remote notarizations that occur in or affect interstate commerce.
The SECURE Act & RON
The Act was introduced quickly in March 2020. If it becomes law in its current form, it would authorize every Notary Public in the United States to perform remote online notarizations (RON) pertaining to interstate transactions. These may include the signing of real estate, legal, healthcare, financial, and other vital documents across state lines—with neither notaries nor signers required to leave the safety of their homes.
So far, 27 states have enacted RON in response to the COVID-19 pandemic. However, remote online notarizations are nothing new—they have been available and utilized by consumers since 2012. The difference is that now RON has been expanded and more widely adopted.
Be aware that RON does not replace the traditional notarial process or limit consumer rights. It is simply another option for signing documents during these extraordinary times.
Each state that has enacted RON law has established the same basic requirements for notaries and signers:
- Notarial acts are permitted using two-way audio/video communication. This enables the signer and notary to see and hear each other in real-time.
- Remote notarial acts are permitted even if the signer is located outside the state where the notary is authorized to operate.
- Notaries are required to authenticate the person signing.
- Notaries are required to record the audio/video communication. This record must then be stored and retrievable in electronic format for three to 10 years, depending on the state.
The remaining 23 states that have yet to enact RON or put the law into effect are using short-term emergency measures until the COVID-19 crisis is averted. The National Notary Association has the latest information about which notary laws apply in each state.
Ensuring Consumer Protection
The SECURE Act aims to protect consumers, both from fraud and from the risk of spreading or contracting COVID-19, all while increasing efficiency, convenience, and consumer satisfaction. These benefits can only be achieved if remote online notarizations are as secure and effective as those conducted in person. The key factors for preventing fraud while using RON include:
- Multi-factor authentication: The signer verifies their identity by correctly answering numerous computer-based questions about their life, credit, or financial history. The notary must also view the signer’s photo ID over the live video feed and compare the information and image to the signer’s visual appearance, just as they would if conducting the notarization in person.
- Encryption: This technology digitally hides transmitted videos to prevent unwanted viewing, recording, or interception. It’s a large part of ensuring that the audio/video connection between the notary and the signer remains secure.
- Tamper-evident technology: Timestamping is a common tamper-evident technique that makes it more difficult for fraudsters to alter video footage without being detected.
Using RON for Real Estate Transactions
The Department of Housing and Urban Development (HUD) has applauded the states’ efforts to adopt RON. This has allowed the real estate mortgage market to function relatively normally during the COVID-19 crisis while still helping people avoid public interactions.
The Mortgage Industry Standards Maintenance Organization (MISMO) has established standards for using RON for real estate transactions. These standards have served as the foundation for most states around the country that have enacted RON thus far.
In April, MISMO announced a new RON certification program for providers and mortgage industry participants. The organization has also developed and released RON standards to promote consistency across mortgage industry practices. Plus, in March, the Veterans Benefits Administration made VA loans that utilize RON as part of an eClosing eligible for guaranty provided the notarization is valid.
In addition, Fannie Mae and Freddie Mac, which purchase more than 40 percent of all residential mortgage loans, have modified their guidelines for single-family sellers. During this unusual time, these organizations are temporarily allowing RON for closing documents, powers of attorney, and electronic promissory notes in most states under specified conditions.
The SECURE Act & the Veri-Lock™ App for Notaries
Since it authenticates and stores notarial acts digitally, the Veri-Lock™ App is the perfect companion for remote online notarizations as established by the SECURE Act. Veri-Lock™ helps prevent fraud and protects notaries from extraneous lawsuits by using advanced blockchain technology to leave a digital trail. This new tool aims to simplify existing processes, make transactions more efficient, and eliminate stamp forgery altogether.
Download the Veri-Lock™ App today to receive your first 10 ID checks for free!
Veritable Data Solutions – http://www.veritabledata.com/