FAQ for Closing Agents, Signing Agents, Mobile Notaries and Remote Online Notaries
Consumers today buy everything online! The National Association of Realtors said in 2019, 44% of buyers started with an online. We search for our dream homes online. We view, get pricing, details, photos and videos. We get mortgage offers online and now we can close online, using a computer, smart phone, or tablet.
In 2017 the real estate industry took a big leap into the future. The Wall Street Journal reported that real estate closings had moved into the digital age with Remote Online Notarization (RON) when a Chicago couple closed a transaction with a Michigan lender, using a Virginia notary, on a laptop, in thirty minutes. RON’s are moving fast now and they are our future!
E-sign or E-closings, by definition, have some documents signed electronically with either typed or written signatures (like you scribble on the pad at the department store.) Other documents (such as the mortgage note) are required to be “wet-signed” with pen and ink on paper. E-sign closings require the signer to physically appear before the Notary Public (not via computer, etc.) so there must be a face-to-face meeting. E-signings are often handled by “mobile notaries,” a term of art that refers to a notary traveling to the consumer to sign and notarize documents. This is especially true for online lenders who don’t have a physical presence where their customers are. Mobile Closing Agents are their answer.
Remote Online Notarization (RON) Closings
Unlike e-closings, RON closers and signers use computers, tablets, or smart phones to electronically sign closing documents and notarize the signers’ signatures. With RON Closings, the buyers, borrowers, sellers and the notary can all be located in different physical locations. The identity of the signer is established with two-way audio-video technology and credential analysis. Credential analysis occurs where signers answer a series of questions to properly identify themselves before the closing, and the notary goes through a script, confirming information and asking the signers to look into the camera and show a matching photo ID, which is stored on the video recording as part of the closing process.
In order to perform RON closings, there are certain requirements that must be met for lenders and title insurance underwriters to insure and provide owner’s and lender’s title policies. So, what are they?
MN RON FAQ
Q: Must Remote Online Notaries be sanctioned by the State?
A: Yes, the notary must be licensed with the MN Secretary of State, specifically as an authorized e-sign and/or Remote Online Notary (RON) The MN notary must first be commissioned as a traditional notary public before becoming eligible for an appointment as an e-sign notary or RON notary. See the Minnesota Secretary of State site here for information on e-sign and RON applications.
Q: Must: The notary must be licensed as a closing agent with the MN Department of Commerce?
A: Yes, Similar to a Real Estate Agent or Broker’s license, a closing agent license from the Minnesota Department of Commerce is a requirement, and there is a potential $10,000 fine for non-compliance.
Q: How do I get a Closing Agent License?
A: There is a formal Closing Agent application on the state’s site at Pulseportal.com that must be completed. Go to the site>Program is: Minnesota Department of Commerce >Board is: Real Estate> Licensing Service is: Submit License Application > Entity Type: Individual> License Type: Closing Agent. You must complete the application.
Q: Does the State Require Education for the Closing Agent License?
Q: Can a RON notarize mortgages anywhere in the country?
A: Yes, however, the notary must physically be located within the state of Minnesota when remotely notarizing documents. The location of the signer/s must be within the United States, and the notary must verify the signer’s location at time of signing. That means asking the question and getting the answer on the RON video recording and using the correct RON notary certificate to match state recording requirements.
Q: Can we use RON on all loan signings?
A: RON can only be used when consent is given by all parties. All parties include: the signers -buyers and sellers; the lender; the title company insuring the loan; and the County Recorder where the documents are to be recorded. Signers must approve and consent in writing as part of the transaction.
Q: Are there Requirements for RON Technology?
A: Yes, the RON technology vendor must meet all the MN statutory requirements under MN Statute 368.645 for identity proofing (also known as knowledge based authentication credential analysis) and electronic storage. So, the notary must choose a technology vendor that meets the standards, and must maintain an electronic journal and have an electronic seal that meets state law.
Q: How is the Notarization record maintained and who is responsible for it?
A: The remote online notarization recorded video must be stored and maintained by the notary or his/her employer for at least 10 years and an electronic journal must also be maintained. See statute. This may also be satisfied by the RON technology vendor. So check the vendor contract.
Q: What about recording of the RON mortgages and deeds?
A: Electronic Recording must be accepted by the Courthouse where documents are being recorded. This is very important – the county where the property is located and its jurisdiction (either Abstract or Torrens offices) must accept electronic documents for recording. If not, the more traditional notary and wet-sign paper closing process must be used. The counties accepting electronic notarization are expanding quickly, but be sure to verify this before the signing! There may be a work-around, if allowed. An electronic document that has been printed into “tangible form” by the notary, who adds a special acknowledgment, may be recorded in any county under state law.358.646. But check with the the county of recording to verify their process and requirements.
RON and e-sign closings are widely accepted by the public who is used to purchasing on the internet. They save a lot of time, travel, paper and the expense of brick and mortar closing offices. As more and more technology providers fill this need, and consumers find more and more mortgage providers online, closers need to meet the need and adapt. Our closings will have a significantly different look and feel. More like a ZOOM meeting, than a traditional table fund closing. Professional electronic and remote Closing Agents, I expect, will soon become the norm, working from home.
Be prepared – now is the time to get your commission and gear up for e-sign and RON Closings.