National E-Notary Standards in Progress
During the mortgage process there are several documents that have to be notarized. GTE Federal Credit Union told NMN that this is the main hindrance of electronic mortgage adoption, but Pennsylvania has moved to change the landscape by enacting an e-notary system that it hopes will be the basis of a forthcoming national standard.
Specifically, the Pennsylvania Department of State and a special team of the commonwealth's county recorders have come together to develop what they are calling the country's first National eNotary Registry and Electronic Notary Seal Program, which allows for real-time authentication of notaries and secure online delivery of verified electronic notary seals.
This statewide electronic notarization system was launched last week at the National Constitution Center in Philadelphia. The statewide system is aimed at streamlining business transactions between government officials and businesses, as well as increasing protection for the public against forgery and fraud.
Pennsylvania's Electronic Notary Seal Program maintains the fundamental and protective components of notarization, and incorporates real-time authentication of notaries via the National eNotary Registry.
In order to aide them in this process, county recorders turned to the National Notary Association to form this system of electronic transfer.
"The background behind this is such that we've worked with Pennsylvania to manage the issuance of a certificate to a particular party in the mortgage process," said Richard Hansberger, director of e-notarization at the National Notary Association. "What's been key in all this is that the county recorders have been pushing for it. They wanted to bring notaries into that process to continue to move toward fully digital docs.
"We've set this up as a best practice model where industry, government and notaries will agree that this provides a benefit to everyone," he said. "We'll put a digital document into the notary's hands so they can digitally sign it with as many applications as possible. We've provided a digital certificate that we hope to fan out into a national standard.
"The next step from here is adoption," said Mr. Hansberger. "We want notaries to electronically sign documents in Pennsylvania to the county recorder. Everyone in the mortgage industry wants to go paperless. So, folks can come to Pennsylvania and e-record and e-notarize right now."
Will there be national adoption of this standard? "It's always difficult to tell but the more that we can do to advance a standardized set of best practices, the better," answered Mr. Hansberger. "A large national company doesn't want to have to adjust to 50 different standards.
"This system also makes the docs much more secure. The two issues in terms of fraud are that there are notaries that become notaries to commit fraud so we worked with the state to make sure we get this to the right notary and that the state can revoke that if there are issues. We're putting professional standards around notaries to weed out those that shouldn't be there.
"Also, what was important to us was that once that document was notarized we wanted that to be reliable, which is why we added the digital certification to validate the process electronically," Mr. Hansberger said. "We want to regulate notaries so they can be trusted and also help the vendors make more secure electronic documents that include the notary."
"Now that these standards are in progress in Pennsylvania, the hope is that they will spread throughout the country," said Neal Creighton, CEO at GeoTrust Inc., a provider of identity verification solutions for e-business and an approved issuer of digital certificates for online security under this new Pennsylvania standard.
"Pennsylvania was the first mover in e-notarization. Arizona is rolling something out as well and both wanted to have a national standard. Pennsylvania was the first to adopt those guidelines. "Right now we're seeing the beginning of a real trend," he said. "The ecosystem has been built out so we can move to a digital environment.
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