MISMO Seeks Input on Online Notary Standards

September 14, 2017

The Mortgage Industry Standards Maintenance Organization (MISMO) is inviting mortgage industry participants to collaborate on developing new electronic and online notary standards and best practices for use within the mortgage process.

Over the past few years, several states have approved laws that allow the use of a remote, online notary in situations in which it is not convenient for consumers to be located in the same place. Several other states are considering similar laws. MISMO, recognizing the need for consistency across the country, has prioritized an initiative to develop standards for electronic and online notary actions. This will enable states to adopt consistent regulations for electronic and online notarization and permit lenders and other industry participants to quickly adopt new practices to meet consumer demands for convenience and to improve the overall consumer experience.

"Technology has advanced to the point where online notarizations are possible, but there is no consensus yet on how to conduct them," said Mark Ladd, vice president regulatory and industry affairs at Simplifile. "By creating standards and best practices, MISMO seeks to create consistency in online notarizations from state to state. We look forward to collaborating with mortgage industry participants as well as state agencies and county recorders to develop common practices that ultimately make things easier for consumers."

The new Online Notary Workgroup will be responsible for creating a set of industry standards for the use of electronic and online notaries, which may include credential analysis, borrower identification, and capturing and maintaining a recording of the notary process electronically. In addition to creating standards, the workgroup will develop best practices, implementation guides and other educational materials. To participate in the effort, please send an email to info@mismo.org with "Join MISMO's Online Notary Workgroup" in the subject line.

Earlier this year, ALTA formed a workgroup to examine the benefits and challenges of remote online notaries, and to help ensure innovation in this area improves the consumer experience. (For more information, contact Justin Ailes, ALTA's vice president of government affairs.)

“Advances in technology have the potential to improve the consumer experience and understanding at the closing table,” said Michelle Korsmo, ALTA’s chief executive officer. “ALTA members share the goal of helping ensure consumers have a more efficient and streamlined closing process. As the closing experience continues to evolve, we must remember that purchasing a home is the largest investment most Americans will make in their lifetime. Homebuyers navigating their real estate transaction will continue to rely on settlement agents and real estate attorneys as important resources that provide information and guidance throughout the process.”

In order for this practice to be successful, statutes, regulations and standard practices need to exist that recognize and protect remote online e-notaries. ALTA and its members are developing a draft bill on online e-notarization, and have provided comments to proposed changes to the Revised Uniform Law on Notarial Acts and to a draft of e-notarization Frequently Asked Questions for recorders of deeds developed by the Property Records Industry Association. ALTA believes that, if done right, online e-notaries can reduce certain fraud risks.

“One of the primary concerns that arise from the evolving trend of electronic documents is ensuring that the documents are validly executed and in a recordable format. This concern is exacerbated with remote electronic notarizations,” said ALTA President Dan Mennenoh ITP, NTP. “Protecting the integrity of the land records upon which our industry relies is imperative. To ensure that the title insurance and settlement industry is able to protect the property rights of consumers, we need to have a reliable land records system that is free of any contamination of unlawfully executed and/or recorded documents.”

Contact ALTA at 202-296-3671 or communications@alta.org.