Bulletin: SLS2018003

Date:
May 11, 2018
To:
All Issuing Offices
RE:
UNDERWRITING - Remote Online Notarization

Dear Associates:

State law is rapidly changing and pending legislation may soon authorize remote online notarization (“RON”) in many states. Issuing Offices must exercise diligence when asked to insure documents notarized by RON given the variety of state laws and the unique issues presented by RON in the real estate context. This Bulletin advises you of the Company's current requirements for insuring documents involving RON real estate transactions. These requirements may be supplemented by state-specific bulletins.

REMOTE NOTARIZATION

RON is a process whereby a signer and a notary public use interactive two-way audio and video communication technology to notarize the signer’s electronic signature on electronic documents. In states where RON is authorized or permitted, personal appearance requirements are met because a signer appears before the notary taking the acknowledgment via secure interactive internet-based two-way audio and video communication technology. The original document and signature requirements are met under the Uniform Electronic Transactions Act (“UETA”) as adopted by each state and the Electronic Signatures in Global and National Commerce Act enacted into law in 2000 (“E-Sign”, 15 U.S.C. 96 §7001 et seq.).

COMPANY POLICY

1. RON Authorization. Issuing Offices may choose to perform and accept RON, where permitted and insurable by the Company. State law must authorize or permit RON in the state where the subject property is located. Click here to see a list of states where the Company will insure RON. Please see the appropriate State Bulletins for additional guidelines.

2. RON Screen Size. The Company will not insure documents notarized by RON performed on iPhones, Android phones, etc., with a screen size of less than 7 inches.

3. Lender Consent. The lender must approve and consent to the use of RON in any real estate transaction.

4. Consent Required. Issuing Offices must obtain a separate electronic written consent from all parties to the transaction prior to execution of documents electronically; including the seller, buyer/borrower, and lender, in compliance with state and federal law. It is not necessary to record the consent in the Public Records, but Issuing Offices must retain a copy in your electronic records. To evidence consent in the public record, consider including the following recital in the document upon recording: “This document is valid and enforceable under state and federal electronic signature laws as all the parties to this document consented to do business and intended to sign electronically.” Note: The RON vendor and the lender may require separate consents, which will also need to be electronically signed. Issuing Offices must also require consent and release for audio/video recording if state law requires recording of the RON conference for the electronic record. Click here for a sample Choice of Closing Method & Consent form.

5. Withdrawal of Consent. Issuing Offices must obtain any withdrawal of consent in writing and retain this in your records. 

6. Recordability Where the Property is Located. Issuing Offices must confirm in advance that the county clerk or recorder is willing and able to receive and record remotely notarized documents by electronic filing ("eRecording"). If the county does not perform eRecording, the form and procedure must be pre-cleared with the county clerk/recorder before insuring since many county recording offices still require original “wet-signed” mortgages and other documents. Click here for a list of eRecording counties.

7. Notarial Law Compliance. In addition to any state-specific requirements specifically addressing RON, a RON transaction must comply with all state notarial law requirements.

8. RON Taken In Another State or U.S. Territory. The form of acknowledgment and attestation must conform to the laws of the state or U.S. Territory: (a) where the acknowledgment or attestation is taken, and (b) where the subject property is located. Issuing Offices must examine the signature page of all recordable documents to confirm that the documents are properly executed and notarized in accordance with state law where the subject property is located before insuring a transaction or sending the document for recording regardless of where a document affecting real property is prepared or where it is executed.  U.S. Territories include (but are not limited to): American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.

9. Acceptable Photo Identification. All electronic Signers must provide acceptable U.S government-issued picture identification (this includes U.S Territories) or state government-issued picture identification, which is subjected to credential analysis technology. All I.D. must be scanned and retained in your electronic records. Issuing Offices must retain a copy of (a) the digital certificate confirming the Signer’s identity (click here for a sample), and (b) the acceptable photo identification. Otherwise, you must obtain approval from a Stewart Underwriter. If the I.D. is a foreign passport, Issuing Offices must (a) ensure that the I.D. is subjected to credential analysis, and (b) obtain pre-approval from a Stewart Underwriter. 

10. RON Taken Outside the U.S or RON Involving a European Union (E.U.) Citizen.  Issuing Offices must obtain Stewart Underwriter approval when a Signer is physically located outside the U.S. at the time of a RON transaction. Additionally, if the Signer is an E.U. citizen, Issuing Offices must contact a Stewart Senior Underwriter.

11. RON Vendor Platforms. Technology providers of RON services must have comprehensive security programs in place to ensure data security. The Company requires any RON vendor technology to meet the requirements of state law and the proposed standards for Remote Online Notarization which have been promulgated in a joint letter dated February 14, 2018, from the MBA and ALTA to NASS RON, in conjunction with the MBA-ALTA Model RON Bill[1]. Issuing Offices must use a vendor or lender platform that ensures the following:

a. Identity proofing where the signer proves their identity by at least two of the following methods: (1) credentials analysis of government issued I.D. (e.g., driver’s license, passport, military ID card, etc.); (2) dynamic knowledge-based authentication, (e.g., questions based on the signer’s personal knowledge); and/or (3) biometrics (e.g., recognition of behavioral and biological characteristics, fingerprint recognition, eye scan, etc.); 

b. A clear quality audio-video recording of only the notarial act (not the entire session between the principal and notary), as well as secure storage of the notarial recording record

c. Post-execution document record, which includes: (1) a digital certificate; and (2) evidence that each document is subject to tamper-evident technology, which records the history of updates or modifications made to a document; and

d. A comprehensive vendor security program to ensure data security. Accepted frameworks on developing such programs include: SSAE 16, SOC2, or ISO27001.

Stewart has reviewed and approved the following Trusted Vendors, who meet the above requirements for RON at this time:

1.     Notarize

2.     NotaryCam

This Bulletin is not intended to direct your closing practices or to change the provisions of our underwriting agreements. Escrow and settlement services are outside the scope of our agency contract. You must seek the advice of your own legal counsel in making all decisions pertaining to escrow and closing matters under state and federal law. As a reminder, all independent agencies must have all necessary licenses for escrow, closing, and title as required by state law and a valid underwriting agreement with the Company in each state where the Issuing Office is doing business.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For online viewing of this and other bulletins, please log onto www.vuwriter.com.

[1] "MBA" stands for Mortgage Bankers Association. At the urging of their respective member companies, MBA and ALTA developed a joint task force to develop a proposed model RON bill to create standards across the industry throughout the states. "NASS" is the National Association of Secretaries of State. "MISMO" is an entity wholly-owned subsidiary of the Mortgage Bankers Association ("MBA"), and it develops the uniform standards for the mortgage industry. Today, MISMO standards are accepted and deployed by every type of entity involved in creating mortgages, and they are required by most regulators, housing agencies and the GSEs that participate in the industry. See their website: http://www.mismo.org/x140197

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
SLS2017002 UNDERWRITING - Electronic Signatures and Electronic and Remote Notarization
Related Bulletins:
None
Underwriting Manual:
1.16 Acknowledgments
 
1.52 Aliens And Aliens' Investments
 
13.08 Notaries Public
Exceptions Manual:
None
Forms:
None