MBA Asks for Industry Standards to be Set for Online Notarizations

The Mortage Industry Standards Maintenance Organization (MISMO) has been summoned, by the U.S. Mortgage Bankers Association, to take a close look at online notarizations, in order to set standards for remote and electronic notarizations across the country. Although doing notarizations online is a relatively new development in the industry, they are gaining wide acceptance in different business sectors. After the groundbreaking online notarization to close a mortgage deal took place in August 2017, top mortgage industry experts have expressed optimism that this will improve the standard way of handling many real estate financing transactions.

Online Notarizations – A New Solution

Online notarizations take a lot of strain off of borrowers and property buyers by allowing them use video and audio chat programs like Skype and Apple Facetime to connect to the notary. Once a live connection is established between the notary and the borrower, the notary can help their client complete the notarization process without being physically present.

The Need for Best Practices

Due to the volume of money involved in most mortgage transactions, proper notarization of documents is a must. But due to our current level of technological development, online notarizations can be done safely to close most mortgage transactions. As this kind of remote notarization becomes the norm, the MBA is pioneering a move to create a set of best practices that will unite all the branches of the industry in different states of the country.

Standards Will Make Online Notarizations Consistent

As MISMO explained, in recent years, some states have approved legislation to permit the use of online notaries in circumstances where it is inconvenient for consumers to be in the same location as the notary. But standards are needed since most remote online notarizations will cut across state boundaries. The industry-wide utilization of standards is vital for efficiency and effectiveness in business practices. With the need for such consistent practice, MISMO has made it a priority to push for the development of standards for all online, electronic, or remote notary actions.

The Online Notary Workgroup

This initiative to develop online notarization standards is the main objective of the Online Notary Workgroup. This group will help states to adopt uniform regulations for all online notary actions and allow lenders and other participants in the mortgage industry to adopt the new practices to satisfy the needs of consumers who need a more convenient way to close mortgage transactions.

The Online Notary Development Workgroup will collaborate with other industries that use an online notary to set common standards for use in all online notarial transactions. Similarly, the workgroup will work with county recorders and state agencies to develop practices that will be consistent and make things more convenient for consumers. The standards will cover various aspects of these transactions including verifying credentials, privacy, security, document recording and identification of signees. Also, the workgroup will deliver guides for implementation of standards and materials to educate the lenders, vendors, closing agents and notaries.

Once the workgroup has completed its tasks, all real estate financing customers will be able to enjoy seamless online notarial transactions across the country.

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