By Marlene Miller—If you are hearing more conversations about electronic notarization these days, that’s no surprise. eNotarization is gaining momentum as a desirable business model in many industries, including the mortgage loan industry. You are probably wondering if you should learn more about it or if it will ever apply to you at all. Here, we highlight some important facts about eNotarization to help you decide.
eNotarization is currently limited. While federal law and most state laws allow for electronic notarization, most state notary public administrators are hesitant to allow their states’ notaries to jump into the eNotarization pool. They are concerned that without rules and regulations in place to govern how and under what circumstances eNotarization may occur in their states, security will be compromised, fraud will be prevalent, and notaries will be blamed for much of what goes wrong.
The kinks in existing systems are still being worked out. eNotarization is closely tied with many processes of which notarization is only a single step. Electronic document preparation and delivery and electronic recording are some of the many other electronic processes that must evolve for the eNotary to be able to function.
Also, the eNotarization systems you may be seeing today from various vendors and notary associations may not be the one you use next year or in 10 years. As with all forms of technology, eNotarization will change as other systems are tested and implemented and processes are improved. However, don’t use that as an excuse to put off learning about eNotarization. Build your knowledge on what is available now in your state and you’ll be better prepared for what is to come.
It will cost more to eNotarize. You may have to pay an additional application fee to the state. You must purchase an electronic signature and seal from a qualified vendor and have the proper software for using them, including E-mail capability. If you are a mobile notary, you need equipment with which you can receive, view, notarize and send electronic documents. And if you want to stay competitive, you may have to invest in equipment to work in the field instead of from your home.
New skills and technology are required. eNotarization is simply another tool to accomplish the same thing as notarizing on paper. You must follow the notary public law of your state for your notarizations, whether electronic or paper. However, if you are not familiar with a computer and the Internet, if you aren’t up on current computing technology and terminology, then becoming an eNotary will be an unfamiliar road to travel. It will not be an impossible journey, simply an unfamiliar one that could delay your progress and lose you business.
Even if you are working now where eNotarization is not necessary, remember that things change quickly. The mortgage loan industry would like to eliminate the papers flying back and forth among title companies, lenders, signing services, notaries and borrowers, which would dramatically reduce errors and save time and money for the companies.
Imagine, if you can:
Mr. and Mrs. Borrower go to Lending Company, Inc., and apply for a home equity loan. Heck, they don’t even have to go to LCI, because they fill out their application online and sign and date it with their electronic signatures.
LCI approves the loan and delivers the paperwork back to Mr. and Mrs. Borrower. Mr. and Mrs. Borrower make an appointment with an eNotary from the state’s list of approved electronic notaries, which LCI has included with the paperwork.
The eNotary comes to the Borrowers’ house and witnesses them apply their electronic signatures to the correct documents. The eNotary then applies his or her electronic signature and seal to the notarial certificates where required.
Zap! The documents are back with LCI, with a copy left on the Borrowers’ computer.
As long as we’re looking into the future here, it’s conceivable that all of these steps could occur in the lender’s office or even in the borrowers’ home. Loan approvals could take minutes instead of days, and the documents could then be electronically notarized by an in-house notary during the borrowers’ first and only visit. Portable electronic devices containing the lender’s electronic loan processing software could store the paperwork, be carried to the borrowers’ home, and accept all electronic signatures and notarizations to be uploaded back at the office.
Observers are divided on whether electronic notarization is the wave of the future or a blip on the radar, but don’t let anyone else make up your mind for you. Learn all you can, think creatively about how it could apply to your particular situation, and be prepared for any eventuality.