The initiative follows the approval by several states of laws permitting remote, online notarizations in cases where consumers will find it challenging to be in the same place for the process. Similar laws are being considered in more states.
MISMO is calling on mortgage industry participants to collaborate in an online notary work group which will be tasked with creating standards related to credential analysis, borrower identification, and capturing and maintaining a recording of the notary process electronically. The work group will also create best practices, implementation guides, and educational materials.
With consistent standards for electronic and online notary actions, MISMO said states will be enabled to adopt consistent regulations. Standardization would also allow lenders and other industry participants to quickly develop new practices to respond to consumer demand for convenience as well as improve the whole experience.
"Technology has advanced to the point where online notarizations are possible, but there is no consensus yet on how to conduct them," said Mark Ladd, vice president of regulatory and industry affairs at Simplifile. "By creating standards and best practices, MISMO seeks to create consistency in online notarizations from state to state. We look forward to collaborating with mortgage industry participants as well as state agencies and county recorders to develop common practices that ultimately make things easier for consumers."
"Online notary has the potential to transform the consumer experience" said Nancy Pratt, vice president of business relations and government affairs at Pavaso. "Just think about one example. A soldier or sailor is away serving his/her country while their spouse closes on a new home. With online notary, the service member can fully participate in the loan closing via audio/visual connection. The spouses can see each other and talk through any questions they may have."
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The Mortgage Industry Standards Maintenance Organization (MISMO) is taking initial steps to develop standards and best practices for electronic and online notarization within the mortgage process.