With the rise of remote online notarizations (RONs), hybrid notarizations, and new electronic notarization legislation, eClosings are becoming much more efficient and effective at catering to various borrower needs. However, as with any type of complex technology that not everyone fully understands, there’s been foreseeable myths, misconceptions, and misunderstandings about the safety of this digital process.
Skeptics, worry not. From what we’ve seen so far, RONs are just as safe as traditional notarizations and can even have additional layers of security throughout the process. Learn how RONs can actually be as safe as, if not safer than, in-person notarizations.
Identifying common types of fraud during eClosings
Before understanding the ways in which RONs provide security, it’s imperative to know what dangers you’re looking out for during the notarization process. Some of the most common ways that fraud can occur include when a person:
- Presents themself as the signer with false ID
- Coerces an elderly person to sign a document
- Presents themself as the notary with a forged signature and steals or co-ops a notary’s seal
Although it’s always good practice to keep an eye out for these attempts at impersonation and fraud, the right technology helps ease the burden and concern.
Preventing forgery and impersonation
There are a number of requirements to perform a RON or hybrid RON. Each signer is required to upload a copy of their ID prior to attending the signing, allowing for the verification of their identity even before the process begins. Signers also answer knowledge-based authentication (KBA) questions — an added layer of security they wouldn’t have at an in-person signing. Additionally, notaries provide a digital certificate that verifies their electronic signature and official notary seal. This exposes any changes made to the document after the electronic record is signed.
Perhaps one of the most important and useful requirements is audio-visual recordings that show both the notary and signer. This solid physical evidence shows who participated in the signing and stands as proof if any attempt at impersonation occurs. For example, in November 2021, Mohan Fang’s home was fraudulently sold while she was out of the country. Fang cited that they were unable to identify the impersonator due to the unclear image of the provided license in the video of the closing. Had they not had that audio-visual recording, there would have been no proof of fraud.
Currently implemented RON legislation
One of the most recent updates to RON laws includes the Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act of 2023, which was approved in February of 2023. This act allows notaries to perform and establish minimum standards consistent with the MBA-ALTA model state RON bill and the Mortgage Industry Standards Maintenance Organization (MISMO) RON standards, while also giving them the flexibility to supplement these standards with their own.
This means that the RON process is likely to be even safer to perform than previously with these extra layers of security.
Looking to the future of eClosings
As legislation is moving towards the acceptance of full and hybrid RONs, Blend is committed to catering to the security needs of our clients. With our eClose solution, lenders can rest assured that they’re providing an innovative, smooth, and safe experience for both their loan officers and their clients. While there is skepticism surrounding this process and its related technology, there’s nothing a little knowledge can’t fix. Learn how we help make the notarization process more secure while delivering the efficiency you need.