While remote online notarization, or RON, isn’t new, it’s constantly changing. During the height of the COVID-19 pandemic, usage increased nationwide. However, there are still some states that don’t allow its use because its fluctuating, complex nature can make it difficult for lenders to keep up with and stay within regulations.
What exactly is RON and how does it work? Let’s dive into the details below.
IPEN vs. RIN vs. RON
There are a number of different notarization processes, both in-person and remote. Here are some quick definitions:
- Traditional notarization: The signer and notary are physically in the same room to sign physical documents.
- In-personal electronic notarization (IPEN): The signer and notary are physically in the same room to sign and notarize documents electronically.
- Remote ink-signed notarization (RIN): The signer and notary are in different physical locations and are connected via audio-video technology. After the signer signs the physical documents, they are shipped to the notary for the manual application of the notarial seal.
- Remote online notarization (RON): The signer and notary are in different physical locations and use audio-video technology to sign and notarize documents electronically.
Why RON became popular
While traditional notarization processes require the notary and signer to physically be in the same room together, RONs allow them to meet remotely from virtually anywhere with accessible internet. They also require, at minimum, secure audio-video and eSignature technology.
There are many benefits to including RONs in the mortgage process, including eliminating physical paper, closing deals quicker, and distributing and receiving official documents from anywhere with internet access. However, RON is not yet legal in all states.
The idea of RON goes back 20+ years
Before we get into the details of its legalization, it’s important to understand where RON began. Although it’s more prevalent in today’s mortgage processes, the foundation of RON legislation actually can be traced back to over 20 years ago with the Uniform Electronic Transactions Act (UETA) in 1999 and the Electronic Signatures in Global and National Commerce Act (ESIGN) in 2000.
The Commonwealth of Virginia became the first state to introduce RON in 2012. Since then, most states have enacted permanent RON laws. One of the most recent includes the Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act of 2021, which establishes a federal code of standards for interstate electronic and remote notary acts to be carried out.
RONs can be done nationwide
While a few states don’t allow RONs, they’re majorly accepted nationwide. Lenders must be sure to refer to frequently updated resources, such as the National Notary Association, for the most up-to-date list of states.
Despite this, most states have statutes that recognize out-of-state notarial acts. This means that as long as a RON is completed in accordance with the laws of the state that the notary is physically in and commissioned, the documents are legally effective and recognized anywhere else in the country. Because of this requirement, it doesn’t matter where the signer is located — they can even be international.
It’s promising that with recent legislation, RONs will be the norm nationwide. Signers in all states can already leverage RON as long as their notary complies with applicable laws.
With mortgage technology lenders can close loans more efficiently and quickly, and cater to more clients’ needs. Since eClose technology is essential to the closing process, investing in this experience is imperative to both lenders’ and borrowers’ success.