The Mortgage Bankers Association (MBA), American Land Title Association (ALTA) and National Association of Realtors (NAR) have jointly developed a model executive order to help states that currently do not have remote online notarization (RON) laws in place to carry out remote online notarizations in a standard and uniform manner during the coronavirus pandemic.
The draft executive order is designed to bring consistency to the various temporary measures non-RON-approved states have issued as a result of the COVID-19 pandemic. It proposes legal protection of remote notarizations in order to protect borrowers in states which have moved to virtual closings as a result of COVID but which do not yet have RON legislation in place.
In a joint statement the organizations urge the governors of the non-RON states to enact RON laws consistent with the standards proposed by the non-partisan Uniform Law Commission’s Revised Uniform Law on Notarial Acts and/or the standards now in statute in half the states.
“However, given the challenges of passing RON laws in half the states during the pandemic, we believe it is appropriate to ensure that any new or revised state RIN (remote ink notarization) authorization language be crafted in a way that assures real estate sales are conducted in a manner that offers the most legal certainty,” the organizations write in the statement. “Therefore, we have developed this model executive order, which allows for the implementation of both RON and RIN in such a way that is consistent with minimum standards necessary for remote notarizations.
“We ask that governors and regulators use this proposal as they issue any new or revised guidance for electronic notarizations,” the joint statement adds. “This will not only ensure the soundness of home sales and refinancing, but also allow for a more consistent approach across states.”
Kobie Pruitt, associate director of state government affairs for the MBA, says the proposed MBA/ALTA/NAR model is designed to cut through uncertainty stemming from the coronavirus pandemic. He says part of the problem is that many of the “non-RON” states “have hurriedly approved different forms of Remote Ink Notarization – also known as RIN – through executive order, proclamation or emergency rulemaking.”
“These RIN-based approaches, however, do not necessarily meet all the minimum standards for safe and secure real estate finance transactions,” Pruitt says in an MBANewslink article. “Therefore, to create greater legal certainty … this model is meant to be a short-term fix for states without a permanent RON solution in statute and would like to complete notarizations remotely.
“Although the model allows for remote ink notarizations, it is still MBA’s position that RON is the best long-term solution and RIN should only be used to help the financial services industry during the health crisis,” Pruitt adds.
In a statement, Mark Mackey, vice president and general manager of IDS, commends the group’s efforts.
“The challenges of conducting in-person real estate closings during the pandemic have certainly highlighted the need for a legal, remote option for document notarization, and while states have done their best to create temporary solutions to address this issue, the mortgage and real estate industries can still greatly benefit from better standardization across these temporary orders,” Mackey says. “As the three groups representing the interests of the major players in the real estate transaction – mortgage lenders, title/settlement companies and real estate agents – these entities are uniquely suited to craft a model that addresses the specific challenges of implementing RON for real estate transactions, and on behalf of IDS, I would like to extend my sincere thanks to these groups for addressing this issue head-on.
“While RON is certainly the preferable of the two methods, it is easy to see, in light of the larger implementation hurdle RON presents, why states would opt for RIN in their initial round of temporary measures,” Mackey adds. “However, states should view RIN as just that – a temporary measure to help address immediate concerns – while also committing to the goal of putting the legislative mechanisms in place to make RON the long-term solution.”
Rick Triola, founder and CEO of NotaryCam, also commended the group’s guidance. He points out that, to date, all but seven states have some form of RON legislation or executive order in effect.
“NotaryCam has observed first-hand for some time the simplicity, security and convenience RON brings to the real estate closing ceremony, and while we wish the circumstances surrounding this joint effort were quite different, we applaud these trade groups for banding together to provide states with the necessary language to fortify the legal underpinnings of remotely executed notarial acts and provide real estate professionals with a measure of standardization regarding the particulars of these orders,” Triola says in a statement.
“Prior to the onset of the COVID-19 pandemic, only 22 states had passed RON legislation, and even fewer had those laws in effect at that time,” Triolas says. “Thus, the majority of states had to pass temporary executive orders to allow the notarial act to be completed remotely in some form or fashion, many of which only authorized remote ink notarization (RIN) rather than RON.
“While RIN provided a necessary stopgap early on, it is not a scalable or sustainable solution, particularly for real estate transactions,” he adds. “With COVID-19 cases continuing to rise and a vaccine still a distant possibility, states would be well advised to extend and expand their current orders to make RON the de facto method of document notarization for the near future.”