2021 was yet another progressive year in the consumer lending and real estate industries. Nine states enacted permanent remote online notarization (RON) laws, including New Hampshire, Illinois, and New Jersey, and Ginnie Mae approved the use of eSign and RON in connection with loan modification agreements.
To further add to the forward momentum, on Wednesday, December 22, New York Governor Kathy Hochul signed Senate Bill 1780C , making the Empire State the 38th state to approve a permanent RON law.
The decision to permit electronic notarization makes mortgage closings, loan modifications, and other legal and financial transactions more accessible and convenient for customers, lenders, lawyers, and loan servicers in the State of New York. In addition, this is a meaningful step towards digital transformation and adoption in the larger mortgage, real estate, and financial spaces.
The impacts of New York’s RON Law
Before the Governor signed Senate Bill 1780C, the state had previously approved an emergency measure that authorized the temporary use of RON, RIN, and video conference authorization. The legislation just signed into law mirrors, in many ways, laws already in effect in the majority of states across the country and gives the New York Secretary of State significant regulatory authority over its implementation. Notably, the new legislation eliminates what had been the temporary nature of electronic notarization and establishes RON going forward as a permanent option for businesses, notaries, and customers who wish to take full advantage.
Below are the most significant provisions of the recently signed New York RON legislation.
- Notaries must be physically present in the state of New York. However, the bill does not officially address the required location of signers
- State-commissioned notaries will be required to register with New York
- New York plans to implement regulations and standards for all technology providers and will require provider approval in accordance with to-be-promulgated state guidance
- RON technology must be available and accessible to people with disabilities
- Recordings of all RON transactions must be retained for at least ten years
- A certificate must be created that submits that the notary appeared remotely online
- The bill includes paper-out provisions and requires that businesses may not require the use of RON but instead offer it only as an available option or service
What does this mean for notarization in New York?
At the pandemic's start, New York issued a temporary RON ordinance. However, with the recent approval of Senate Bill 1780C, RON transactions will become permanent in the Empire State beginning June 30, 2022.
Until the new law officially becomes effective, all state-commissioned notaries can continue to notarize documents via RON technology, like Stavvy.
When does the New York RON law officially go into effect?
The permanent RON law will take effect on June 30, 2022. Until then, the state will extend the emergency measure so that notaries can continue to perform notarizations remotely.
What are the benefits of using RON in New York?
RON has several advantages over traditional, in-person, pen-to-paper notarization. For those who wish to implement RON into their workflow, below are four potential benefits.
- RON makes financial and legal transactions, like real estate closings, more convenient and accessible for consumers. Traditional notarization does not offer the most sophisticated customer experience, nor is it always accessible for busy people with busy schedules. In standard legal and financial transactions, it is customary for signers to locate a state-issued notary and take time out of their day to travel to a physical location to get legal documents notarized. This process can sometimes take hours, often requiring time out of work and access to reliable transportation. RON removes these cumbersome barriers and allows customers the ability to have their essential documents notarized from the comfort of their own homes.
- Remote online notarization adds an extra layer of security. Digital offerings, like RON, often invite some level of skepticism, particularly regarding security and whether or not it is as safe a practice as the traditional process. The top RON technology providers put security at the forefront of their digital designs and ensure that their capabilities comply with federal, state, and local laws. For example, the Stavvy platform is certified MISMO® compliant, SOC 2 Type 1 compliant, requires two forms of identity authentication, and provides tamper-sealed transactional documents and secure meeting links.
- RON helps consumer lenders, services, and lawyers do more business. Lenders, mortgage servicers, and lawyers can all benefit tremendously from this new permanent RON legislation and the right RON technology partner. Most RON technology includes digital communication eliminating paper and postage and built-in digital guardrails that help to eradicate common human errors, like missed signatures, checkboxes, or information fields. To ensure a smooth and streamlined customer experience, Stavvy notifies users in real-time when documents have been electronically signed and completed. These digital capabilities save organizations time, money, and frustration, ultimately leading to a boost in business.
- Remote notarization is a sustainable option for organizations. Financial transactions and traditional mortgage closings and loan modifications require a large amount of paper processing. The digital nature of RON provides a more environmentally friendly option by eliminating paper demand and saving countless trees in the process.
What are the next steps for New York lenders, loan servicers, and lawyers?
COVID-19 initially pushed RON into the spotlight and exposed consumers’ desire for remote online transactions. Now, nearly two years later, this new legislation makes New York the 38th state to pass a permanent RON law in the United States. With the majority of states within the US taking steps to enact the permanent RON laws, all 50 states may eventually approve and implement RON and authorize a fully digital mortgage lending and servicing experience.
For New York lenders, loan servicers, and lawyers interested in digitizing their workflows, streamlining their business, and keeping up with consumer preferences, now is the perfect time to invest in RON technology.
To learn more about Stavvy’s certified MISMO® compliant platform and RON capabilities, schedule a one-on-one demo with a member of our team.
To learn more about RON and its many benefits, check out our Complete Guide to Remote Online Notarization.
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.