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ComplianceLegalSeptember 01, 2022

Remote online notarization (RON): Why mortgage lenders need it and the best way to achieve it

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For many lenders, remote online notarization (RON) offered a turnkey panacea during the height of the pandemic. RON enables a Notary to witness a borrower signing a document virtually through live videoconferencing. By leveraging digital technology, documents can be signed even when the parties aren’t in the same physical location as the notary. This approach satisfies the regulatory compliance associated with documents, including recording the deed of trust.

In 2020, RON became an essential service to ensure closings continued uninterrupted. Almost every state enacted emergency legislation or executive orders allowing for the legal use of RON. Since then, 41 states have adopted permanent RON laws. However, RON is only part of an end-to-end digitized mortgage process. The settlement community’s state of readiness to support RON through disconnected technologies has somewhat limited the large-scale adoption by lenders. While its convenience is obvious, RON adoption will more likely be an ongoing journey than a single leap for most lenders.

What is required for RON?

RON allows a notary to remotely witness a document being signed using audio-visual technology. However, the following conditions must be satisfied to be legally binding:

  • The person seeking the Notary’s services, if not personally known to the notary, must present a valid photo ID to the notary during the video conference, not merely transmit it before or after.
  • The video conference must allow for direct interaction between the person and the notary (e.g., no pre-recorded videos of the person signing),
  • The person must transmit by fax or electronic means a legible copy of the signed document directly to the notary on the same date it was signed.
  • The notary may notarize the transmitted copy of the document and send the same back to the person.
  • The notary may repeat the notarization of the original signed document as of the date of execution provided the notary receives the original signed documents together.

The dash to digitize mortgage lending

While a lot has changed since the height of the pandemic, the need to execute lending transactions quickly and effectively has not. Although lenders had been moving toward RON at a gradual pace before the pandemic, they now know it’s critical to adopt RON if they want to enable truly contactless end-to-end mortgage closings. Lenders also envision fully digitized business processes where automation allows them to meet and exceed customer expectations and gain competitive advantage.

Lenders require digital mortgage technology with a robust platform that supports the digitization of mortgage lending from application through approval to closing. And to be effective, that digital lending platform should offer best-in-class RON capabilities that are frictionless, secure, and trusted. A digital closing platform with multiple integrated RON providers enables lenders to select the RON solution transaction-level characteristics. That way, lenders can support every closing, from paper-based to hybrid to fully digital.

These requirements have heavily influenced Wolters Kluwer eOriginal’s approach to RON. Now, more than ever, mortgage lenders need RON tools that empower and optimize their lending workflow. Rather than forcing lenders into a single RON solution, we recognize the best approach is to maximize optionality by offering access to multiple RON solutions and allowing lenders and their settlement partners to select the best-fit solution for every mortgage transaction.

Why? Because lenders and their settlement agent partners require maximum choice and flexibility for completing fully remote closings. An open, integrated approach allows lenders to take advantage of best-in-class capabilities while centralizing lender closing operations in a platform that supports every closing scenario.

ClosingCenter provides a simple, complete, and efficient closing experience for lenders, borrowers, and settlement agents. ClosingCenter is built on an open foundation enabling integration with multiple doc prep providers, RON providers, and other solution extensions. Wolters Kluwer eOriginal’s RON strategy is designed to give lenders the flexibility to choose from an ecosystem of trusted partners to get their deals done.

Although the impact of the pandemic is now largely behind us, there’s no question that digital lending is here to stay. The most successful organizations will integrate RON in a way that meets their needs today – and enables their digital evolution in the future.

Want to learn more? Explore our valuable content and insights on RON, ClosingCenter, and other aspects of digitized mortgage processes.

Our product experts can help map out your transition into digital adoption. Ask for a demo today.

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