RON Legalization is Growing — Are You Ready?
For the past year and half, there’s been a lot of buzz surrounding remote online notarizations, otherwise referred to as RONs. As the COVID pandemic shut down most face-to-face business in 2020, a growing number of U.S. states enacted emergency laws making RONs legal for large financial transactions.
Currently, RONs are being used in relatively few mortgage transactions, and it may be some time before they reach critical mass. But there’s no doubt the technology is growing in popularity. Borrowers love the idea of a completely online mortgage process—in fact, they are demanding it. So how should lenders prepare?
Why All Roads Are Pointing to RONs
As of this writing, 37 states have made RONs temporarily legal during the pandemic, according to the Mortgage Bankers Association, which has partnered with the American Land Title Association (ALTA) to develop model legislation for states seeking to legalize RONs. Some states, like Pennsylvania and New Jersey, have made their RON laws permanent.
Use of RONs in mortgage closings, while still relatively low, is growing. According to ALTA, adoption of RONs grew 547% in 2020. And now there’s an effort afoot to make RONs legal nationwide.
Earlier this year, U.S. Senators Mark Warner (D-Va) and Kevin Cramer (R-ND) introduced the Securing and Enabling Commerce Using Remote and Electronic Notarization Act. The SECURE Act would also ensure electronic remote notarizations used tamper proof technology and multifactor authentication to prevent fraud.
Meanwhile, the Mortgage Industry Standards Maintenance Organization (MISMO) has recently developed standards for mortgage industry participants to implement RONs as well as created an eMortgage Technology Certification Program, through which companies can demonstrate compliance with these standards. MISMO’s standards will ensure the integrity and scalability of RONs by laying out steps to verify a borrower’s identification, establishing audio and video requirements, and capturing and maintaining a recording of every signing.
The Time to Get Ready is Now
Clearly, an industry roadmap for adopting and implementing RONs is crystallizing. If you pay attention to the mortgage trade press, you’ve probably seen a number of partnerships and announcements involving technology vendors, title companies, and other third parties to provide RONs to mortgage lenders and servicers. However, many of these efforts are falling short of taking full advantage of the sort of digital mortgage experience RONs can provide.
For example, most eSign vendors that provide RONs do not also provide mortgage document services—let alone a full library of SMART docs, which are essential for providing borrowers with a truly end-to-end eMortgage experience. Many also do not provide clients with access to an easy-to-use eVault that provides an interface for accessing vaulted documents and initiating transactions to the MERS eRegistry, which is the industry’s system of record for holders of eNotes. So, to go all the way through to RON requires multiple integrations.
These gaps mean that lenders that want to offer RONs must have multiple integrations with separate systems and technologies—one to sign disclosures, another to sign all their loan documents in SMART Doc format, another to access eClosing, and another to sign their closing documents via RONs. That’s as many as four different platforms. Besides the fact that these different systems don’t always work well together, this strategy makes what should be an easy and convenient experience for borrowers an unnecessarily complicated one.
The best way to implement RONs is to have all the components of an eMortgage process under one roof to create a seamless experience for borrowers, instead of forcing them to hop from one platform to another. To date, Evolve, through our SigniaDocuments subsidiary, is the only company that offers such a platform. That’s thanks to our recent acquisition of E-Notary Seal, which provides RONs in all 50 states.
If you’re ready to offer your customers a complete eMortgage experience from application through closing, including RONs, we can help. Just give us a call at 888-892-1843 or drop us a note at info@EvolveMortgageServices.com.