January 1, 2020 marked more than just the start of a new year. It also represented the next milestone in the march towards nationwide legalization of remote online notarization (RON) – a key component to the ability to conduct truly digital mortgage closings.
Florida, Idaho, Kentucky and Oklahoma all rang in RON and the new year together, with Arizona, Iowa, Maryland, Nebraska and Washington joining the party later on in 2020. Of this group, Florida represents the most “marquee” state to adopt RON based on its position in the overall mortgage market.
According to the Mortgage Bankers Association (MBA), originations in Florida made up 6.9% of all originations nationwide in 2017, ranking the state third in terms of both total originations and total origination volume.
The NMLS also reported similar statistics for 2018, positioning Florida third in both total originations and total origination volume. Having a state of this size and importance to the mortgage industry legalize RON paves the way for serious transaction volume to occur, providing further evidence of RON’s role in facilitating a digital mortgage process.
With the group currently set to come online in 2020, 22 states have passed RON legislation, and to date, 13 have laws in effect: Virginia, Texas, Nevada, Minnesota, Montana, Ohio, Tennessee, North Dakota, South Dakota, Indiana, Michigan, Vermont and Utah. In addition, both Texas and Montana passed updates to their RON legislation earlier this year to more closely reflect national policies, representing on-going commitment to driving adoption even in states where RON is already legal.
The Texas bill addresses several uncertainties previously acknowledged in regard to RON in Texas. Under this bill, a notary will be able to certify via an affidavit that a paper copy of a notarized electronic record is a true and correct copy, and county clerks will be required to record the transaction.
The Montana bill expands opportunities for the state’s remote notaries and strengthens the foundational efficiencies of RON by aligning Montana remote notaries with model legislation from the MBA and American Land Title Association, thus allowing Montana notaries to conduct RON transactions for out-of-state residents.
Virginia was the first to allow its notaries to remotely notarize documents for citizens nationwide when it passed the first RON legislation in 2011, and what started out as a slow journey has gained speed in the past two years.
More than 90 percent of RON legislation has passed in the last three years alone, and there’s more in the works. Given that eight jurisdictions – California, Colorado, District of Columbia, Hawaii, Missouri, New Jersey, New York and South Carolina have introduced RON legislation during their most recent legislative sessions, it’s not hard to fathom that by the end of next year, RON could be legal in a majority of U.S. states.
A big step in realizing the goal of a fully digital mortgage is being able to conduct remote online closings (ROCs), which unlike eClosings can be conducted anywhere, anytime and without all parties needing to be in the same physical location. Without RON, ROCs – and by extension fully digital mortgage transactions – simply cannot exist.
RON is not a passing fad, and the industry is no longer standing on the edge of a RON revolution. It’s been here for some time, and Jan. 1, 2020 marked the next chapter in the story.
Rick Triola is founder and CEO of NotaryCam, offering RON technology and services as well as identity verification and authentication.