MISMO moves needle on remote notarization laws for mortgage lenders
It was just two years ago that Troy, Mich.-based United Wholesale Mortgage made headlines as perhaps the first mortgage lender to complete an electronic closing without the physical presence of a notary.
But what prevented this from spiraling into the norm with more such closings was not just based on slacking technology efforts, but the dearth of state laws permitting such activity. MISMO, responsible for setting a range of industry standards, just approved a set of remote notarization guidelines to help facilitate its growth.
"With states across the country enacting remote online notarization laws, MISMO's standards will support greater consistency as the volume of remote online notarial transactions increases," said Eddie Oddo, Vice President of Corporate Business Solutions at First American Title Insurance Company, and co-chair of MISMO's Remote Online Notarization Workgroup, in a press release.
"We're excited about this next stage in the standards process and look forward to seeing lenders, title companies, software vendors, and notaries leverage RON standards to offer borrowers a more secure and efficient closing process," Oddo said.
MISMO's RON standards intend to unify practices and local laws that will allow the use of audio-visual communication devices to virtually notarize documents. A draft of the standards were released earlier in the year, and were updated to "include language to preclude the storage of personally identifiable information," according to MISMO. The standards will be made free to the public for use without a license fee.
The standards explore "credential analysis, borrower identification, capturing and maintaining a recording of the notary process electronically, audio and video requirements, record storage, and audit trails," according to the organization, which has released them for public comment through Aug. 12.
At the current time, 22 states have passed remote notarization laws, though only 10 are in effect, and just five have fully implemented their remote notarization procedures, according to the National Notary Association.