Closing a Loan in a Wet State During COVID – 19: Here’s What You Need to Know

Wet vs Dry – We are not Talking about Surfing

Wet purchases customarily mean that all monies are collected and disbursed at closing. This is sometimes referred to as “table funding”.

Dry purchases mean that all monies are collected and disbursed after closing by some previously agreed to arrangement.

With the COVID-19 pandemic, many changes have taken place. Wet funding seems “risky” as you are not physically in front of the closing table participants. When it comes to notarizations, social distancing has greatly restricted the ability of notaries to legally perform their duties. Fortunately, many states have adopted a temporary acceptance of remote notarizations that has allowed business to continue as close to normal as possible.

Here we look to North Carolina.

Technology and Location

In the great state of North Carolina, notaries can perform video notarization if they have the right equipment to do so. This means that they have a form of technology that offers clear sound, sight, and is utilized in real-time. The program utilized must allow the notary to take screenshots and record the session. During the session, the principals must provide verification of their physical location by stating the county in North Carolina that they’re currently in. Video notarization is authorized for all legal documents except election documents.

Oaths and Identification

The normal rules of identification should be followed via video conferencing. If the notary personally knows the principal, then they don’t need to ask for a formal identification document. However, if the principal is not personally known by the notary, they must provide physical identification over the video conferencing software. This includes an identification that is issued by state, federal, or tribal governments.

This identification needs to have the principal’s face, physical description, and signature to be accepted. Contrary to past requirements, notaries may accept an expired identification document if it was current prior to March 10, 2020. During the signature process, the principal will need to physically state the document that they are signing to the notary. Oaths are to be administered as normal.

Signature Verification

The most complicated part of the e-notarization process is transferring documents from the principal to the notary. Once the notary witnesses the principal’s signature, the principal must transmit the signed document to the notary. This document can be transmitted through various electronic means including photos, scans, or even faxes. In the event the principal doesn’t have access to electronic transmission, they can send the documents via traditional mail or another physical method to the notary.

Once received, the notary must compare the document physically in front of them with the one that the principal signed during the video conference. The notary shall compare the original document with the electronic transmittal, notarize the original, date the notarization as of the date of the act observed using the video conference technology, and promptly transmit the original to the principal or the principal’s designee.

Included Acknowledgement

Notaries performing an emergency video notarization must attach an acknowledgement to the notarized document. This must include three main factors, which are:

  • The county the principal stated they were located in.
  • The county where the notary was physically located during the video notarization.
  • A statement that says, “I signed this notarial certificate on ______ according to the emergency video notarization requirements contained in G.S. 10B-25.”

Journal Requirements

Notaries know that all the notarizations they perform must be recorded in their notarial journal. This journal must be kept for 10 full years from the date of the notarization. You’ll need to include some key elements as part of the emergency notarization. This includes the following:

  • Date of Completion
  • Time of Signing
  • Full Name of Principal
  • Type of Notarial Act
  • Name of Document Processed
  • Identification Number / Type Of ID
  • Video Technology Used
  • Names of Witnesses

Living Will / Heath Care Power of Attorney

A regular part of a notary’s acts is handling Declarations of a Desire for a Natural Death and a Health Care Power of Attorney. Contrary to post-pandemic, witnesses are no longer required for this type of notarial act. The notary must follow the acts of NCGS 90-321.1 for natural death declarations and NCGS 32A-16.1 for health care power of attorney forms. An acknowledgment must be added to these documents stating that the document was executed in accordance with the procedures in NCGS 32A-16.1 or NCGS 90-321.1.

Emergency notarizations are helping to maintain some level of legal order in the wake of this pandemic. While there have been many restrictions in the past about video conferencing for notarial acts, North Carolina has passed emergency notarization protocols to keep business flowing. As a notary, you want to be sure to understand these protocols so that you can legally protect yourself and your business.

 Need an Expert to Close a Purchase in North Carolina?

Since 2008, BNN Services has been trusted by title agencies, mortgage lenders, servicers, and consumers to perform loan and document signings in multiple languages across the country.

Unlike other signing services, BNN Services “touches” each file 8 or 9 times to ensure the process moves forward free of delays. That’s why we’ve completed over 250,000 signings in all 51 jurisdictions and maintained a closing ratio of 96 percent.

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