MReport July 2022

TheMReport — News and strategies for the evolving mortgage marketplace.

Issue link:

Contents of this Issue


Page 35 of 67

34 | M R EP O RT FEATURE The traditional, more well- known process requires the notary to meet face-to-face with the homebuyer (or approved signer) to verify identities and put pen to paper. Even before the pandemic, while essential, the requirement for a physical notary to meet with a homebuyer in-person added time and frustra- tion for all parties involved, with issues arising such as continued rescheduling or even obscure meeting locations—places such as the hood of a car in a store parking lot. Now, due to the pandemic, the traditional process is shifting more rapidly towards the digital, but this traditional method still ends up winning much of the time. Notarizations and the Digital Age W hat's the ideal? As consum- ers shift to a more digital future, remote online notarization (RON) has become the industry's alternative for signing the final closing documents. In simple terms, RON is the ability to liter- ally "meet" the potential home- buyer where they are—at home, at work, you name it—to be able to securely sign their closing documents electronically, saving time, money, and reducing stress for everyone involved. This is the 21st century closing. Where the traditional method of notarization is centuries old, RON is its modern ancestor. RON is by no means new to the industry, however. The pandemic just enabled RON to become a more viable option as most states requested emergency use. Overall, RON was granted emergency use in almost all 50 states (excluding California and South Carolina) and usage grew by 547% in 2020, according to the American Land Title Organization (ALTA). Recognizing the benefits of remote notarizations, a permanent law, the SECURE Notarization Act, was introduced in Congress in 2020 and is scheduled for a vote this year to achieve perma- nent RON acceptance across the United States. It goes without saying that the change did not come without direct challenges from the tradi- tional side of the industry on the not-so-new topic of cybersecurity. However, accepting that there are risks with any digital technology, the argument of abnormal iden- tity fraud is almost nonexistent, once again nudging the notariza- tion process to further adapt to the 21st century consumer. Be as "E" as You Can Be W hile RON is the ideal clos- ing method with minimal risk, there's no surprise that there are still bureaucratic roadblocks preventing complete acceptance across the United States. But it's not all bad news. The improved adoption pace by the pandemic and increased state acceptance enables a hybrid model to help move notarizations, and the industry, into the digital age. A benefit of the hybrid model provides the option to review documents digitally prior to clos- ing and then complete and sign a smaller set of closing documents in person. The combined "wet" and digital signing is not ideal from a customer service perspective, but it is a step in the right direction as the homebuyer is able to view and understand the closing package before they get to the signing table. It is clear that first-time homebuy- ers value a "clear explanation of closing documents," and the hybrid model provides peace of mind and control when RON is not yet a universal option. Progress Not Perfection T he pandemic upended the housing industry's adoption of technology and consumers have come to expect an easier, stress-free option for closing on a home—but the future is still uncertain. Many organiza- tions involved in the real estate transaction are already offering digital choices in the near term to meet consumers' shifted demands. And while the hybrid model is not the ideal, it is a move in the right direction. Keeping in mind that each state still has different notarization laws, here are a few actions to take in the meantime to help you move closer to the 21st century closing experience: • Understand local notary op- tions to determine if your state, county, or municipality allows remote notarizations. • Research hybrid closing op- tions to make a portion of your experience digital. • Engage in local (or na- tional) campaigns to sup- port the adoption of technology as called for in the #SECURENotarizationAct (e.g., letters to your senators). Like with any industry disrup- tion, what is clear is that there's no going back to what used to be. Can you imagine if you couldn't, in under an hour, order and be eating your favorite meal with just a few clicks? No one can. Regardless of national digital adoption stuck in limbo, current and future homeowners expect and will expect the same—there's no going back once you've experi- enced what it can be. DOMINIC FAHEY is VP of Strategy for Doma. The pandemic upended the housing industry's adoption of technology and consumers have come to expect an easier, stress-free option for closing on a home—but the future is still uncertain.

Articles in this issue

Archives of this issue

view archives of TheMReport - MReport July 2022