Remote online notarization, also referred to as RON, was first introduced in the Commonwealth of Virginia in 2012 but has significantly risen in popularity over the past nine years, most notably in the last year or two. According to a recent ALTA survey, RON transactions increased 547% during 2020 as compared to 2019.
The timing is no surprise when you consider the social distancing mandates brought on by COVID-19, historically low interest rates, and consumers demanding more modern and digital-first experiences.
RON is changing the foundational fibers of the mortgage industry, which excites the entire team here at Stavvy. States continue to pass laws, including New Hampshire, Illinois, and New Jersey, authorizing RON transactions, so there is a good chance this new form of remote closing is here to stay.
However, before you dive into the nitty-gritty of RON, you may be looking for some straightforward answers to some complicated questions, including what is RON, what are the laws surrounding RON, and what are the benefits of remote online notarization?
We answer those questions (and a few more) throughout this informative blog post.
What is RON?
RON, also known as remote online notarization, is the electronic notarization of a document. The process often includes using secure audio-video technology, such as Zoom or GoToMeeting, or a digital mortgage platform, like Stavvy.
Electronic notarization opens the door to mortgage notes, deeds, seller’s affidavits, and other essential documents being shared digitally, signed electronically, and notarized face-to-face in a virtual environment. With RON, the notary and signer are not physically together in the same room, which has been standard practice in the United States since the 1600s, allowing people to close on loan and execute other official documents from anywhere in the world!
Why is remote notarization important?
There are many advantages to remote online notarization, and continued adoption post COVID-19 yields even more benefits to the mortgage and financial service industries and their customers. Some notable advantages of RON include:
An all-around better customer experience
Before RON eligible transactions, customers were expected to locate, schedule, and visit a notary public to witness their signatures. This time-consuming to-do, while essential, isn’t always the most convenient of tasks and can cause frustration and delays. RON allows customers to attend an online appointment for eNotarization, and experience faster transaction times, including expedited mortgage closings and loan fund disbursement. Additionally, and in the case of home buying, purpose-built technology, like Stavvy, allows customers, lenders, notaries, lawyers, and title & settlement agents, to work together in the same digital environment from initial application to close, ensuring a seamless and frustration-free experience for all.
Paper may be your proven, manual process; however, it’s not 100% error-proof. Menial mistakes, like a missed checkbox here or an overlooked signature there, can not only extend the length of a transaction but can cost companies additional money and resources to address. When a RON transaction is processed in a state-approved and MISMO®-certified platform, missed fields, including signatures, checkboxes, and initials, are less likely to occur because they are flagged in the system allowing the end-user to take immediate action and avoid costly delays.
A more secure way to work
A traditional notarization requires a notary public to identify the signer using a photo ID or passport manually. RON uses the latest verification technologies to make notarization more secure, including knowledge-based authentication and credential analysis.
Knowledge-based authentication, or KBA, is a method of authenticating someone’s identity in a digital platform, such as asking the user to answer a series of secret or “out-of-wallet” questions. Credential analysis is the process of validating a government-issued photo ID and often requires third-party software or vendor support.
Saves time and money and increases productivity
Customers are not the only people who benefit from a RON eligible transaction; lenders and title companies do too. RON allows for greater operational efficiencies by eliminating travel and errors that directly affect turnaround times and impact the overall cost to close a loan.
Reduces paper and saves trees
Most financial transactions, including loan origination, closing, and loss mitigation, require quite a bit of paper. RON helps to eliminate the industry’s dependency on paper, reduce costs and errors, and most importantly, save countless trees from the paper mill.
According to FreeandClear, a website that helps people understand and manage the mortgage process, the average mortgage loan file includes an estimated 280 pages of paper. If you multiply that by the average number of mortgages processed a year, the industry uses well over a billion sheets of paper per year. Even if a fraction of the mortgages were processed using RON, there would be a significant reduction in paper usage, yielding a sustainable and positive impact on our environment.
How does RON work in a real estate transaction?
Below is a general description of the RON process:
Step 1: The lender, settlement agency, title office, or attorney submits and prepares the closing request through a RON platform, like Stavvy.
Step 2: All signing participants receive an automated notification with the date and time of the signing, a unique meeting link, and detailed instructions.
Step 3: Once the signers join the meeting, the signer’s identity is verified as per the requirements of the notary’s commissioning state before signing any documents.
Step 4: During the RON signing, the notary and signer communicate via an all-in-one platform, like Stavvy or a separate third-party video conferencing tool.
Step 5: Once the signer's identity has been verified, the signer and notary eSign the document, and the notary notarizes and finalizes the document. The digital platform applies an image of the notary’s seal and embeds the notary’s digital certificate into the digital document to tamper-seal it.
Step 6: The remotely notarized document is available to the signer for download and securely sent to the lender and settlement agency.
What is the difference between RON, RIN, and eNotarization?
Many people confuse RON with eNotarization and remote ink-signed notarization or RIN. Below are basic definitions for each transaction type.
eNotarization, or IPEN (in-person electronic notarization), involves documents that are notarized electronically. The notarial seal, signature, or certificate is created and attached to an electronic record and is stored in an electronic format. However, in most cases with eNotarization, the signer must physically be present with the notary.
Remote online notarization (RON)
RON involves id proofing a signer via state-approved methods, such as knowledge-based authentication (KBA) or credential analysis and digital documents that are signed electronically. However, the transaction is carried out online with the signer(s) and notary in separate physical locations rather than in person.
Remote ink-signed notarization (RIN)
RIN, or remote ink-signed notarization, is a temporarily approved alternative to in-person closings in states like Massachusetts, Texas, and Georgia due to COVID-19. The notarization process takes place over an audio-video platform. The signer must sign the physical paper documents while the notary witnesses the ink on the paper signature via a live, real-time video. Signers must overnight the ink-signed documents to the notary, so they can complete the ink notarization and provide the documents to the lender and settlement agent.
What are the rules and regulations surrounding RON?
The laws surrounding RON are constantly evolving. However, to date, they are as follows:
- The RON state laws obligate the use of multiple means to verify the signer’s identity, such as knowledge-based authentication and credential analysis, along with measures to ensure the security and privacy of the audio-video communication
- The notary must be physically located within the state while performing RON
- Tamper-evident technology must be used to guarantee the integrity of a document notarized remotely
- The certificate of acknowledgment must indicate that the document was notarized remotely or using audio-video communication technology
How does Stavvy support RON transactions?
At Stavvy, we are committed to simplifying how loan originators, servicers, title & settlement agents, and lawyers work. Our end-to-end digital closing and loan servicing platform is purpose-built and industry-specific. It can help banking and legal professionals roll out and implement compliant RON transactions, securely send and manage documents, and create a consistently remarkable experience for customers.
One of the clear benefits of the Stavvy platform is that lenders, borrowers, and title agents can close from wherever is most convenient. Stavvy supports the entire RON closing process from start to finish and includes powerful features like eSign, eRecording, secure video conferencing, document management, and audit trails.
Additionally, our powerful Eligibility Engine checks individual loans and assesses entire portfolios to see if the closing is eligible for RON, RIN, or eNotarization and if the county allows for eRecording. This real-time, customizable tool is currently available for use through the Stavvy platform or via API. It is an invaluable resource for loan originators, title and settlement agents, and loan servicers.
On top of the innovative features and tools, the Stavvy platform is fully encrypted and secure, eliminating the need and risks associated with insecure email chains, shipping, and paper filing.
The ability to complete all of this work in one secure location boosts productivity for all involved parties, expedites transaction times, reduces costs, and offers visibility into opaque processes.
The purpose-built RON platform that lets you do more
Now that you understand what RON is and its benefits, you may be interested in implementing it into your workflow. The Stavvy platform provides lenders, title companies, lawyers, and loan servicers with the digital tools they need to securely conduct RON-eligible transactions, eSign, send and manage documents securely, and identify if a transaction is RON eligible. To see how Stavvy can work for you, schedule a one-on-one demo with our team or watch our 15-minute on-demand demo.