What Lenders Need to Know About Remote Online Notarization Acceptance
Understanding County/State Acceptance Rates With remote online notarizations becoming increasingly more prevalent, lenders have to adapt to this modern technology. Not only do they have to learn the ins and outs of this cutting-edge application, but they also have to grasp the stipulations that come with it. More specifically, acceptance rates, state requirements, and stakeholder dependencies, among other factors. For instance, while RON is taking the industry by storm, each state is required to pass legislation that allows for online notary services.
Though tremendous progress has been made on this front, several states have yet to pass RON legislation. Meanwhile, county acceptance is contingent upon where webcam closing can be done. If more counties adopt this technology, it bodes well for streamlined electronic transfers and faster acceptance rates. However, counties that offer eRecording don’t always accept documents that have been notarized through RON. With that said, it’s the lender’s responsibility to delve into each county’s rules and regulations.
Understanding Industry Stakeholder Roles
Investors It’s up to investors to determine if they’ll accept electronically notarized documents. Unfortunately, many investors are reluctant to buy loans that have gone through the RON process. This trend is most common among investors in the secondary market. Government-sponsored enterprises, on the other hand, are more willing to embrace this present-day alternative. Ginnie Mae, Fannie Mae, and Freddie Mac are some prime examples.
Settlement Companies
If your settlement partners are transitioning to remote online notarization, your keen involvement is required to ensure a smooth implementation. Fortunately, several settlement companies have already started the process, making it simple for lenders to navigate the remaining affairs. RON comes with many complexities, so your settlement partners must have the necessary knowledge at their disposal. Otherwise, they’re likely to make costly mistakes when signing and notarizing documents electronically. To guarantee that everything goes swimmingly, your settlement partners will need certified agents trained in remote online notarization.
Title Underwriters
Unless underwriters are willing to insure RON transactions, you can’t notarize documents electronically. With that said, you’ll need to hash out the details with your underwriter. While doing so, inquire about any requirements they have in place to reduce underwriting risk. By covering your bases, you’ll promote a smooth-running process.
Warehouse Lenders
If you use a warehouse line of credit, you’ll need to check if your warehouse lender accepts eNotes. Without eNotes, you can’t close a mortgage loan electronically, making this a crucial step in the process. If your warehouse lender doesn’t accept eNotes, a hybrid closing may be warranted. This unconventional approach involves RON and a paper note.
While this is a great short-term solution, there are some disadvantages to this method. Not only is it time-consuming to send the paper note back and forth, but it also makes the experience less than satisfactory for the borrower. With that in mind, consider finding a more reliable solution to this quick fix.
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