Remote Online Notarization: What to Know & How to Use it Safely

Key Takeaways

• Remote online notarization takes place when a notary verifies a signer's identity and signature during a secure, two-way, recorded audio-visual session.
• Remote online notarization is safe with the right precautions and considerations.
• To avoid fraud resulting from impersonation during notarization, use software like CertifID to confirm identities and securely authorize wire transfers.

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Even as every other business practice turned digital—from depositing checks to wiring funds—notarization remained an analog process. It still required face-to-face interaction and wet signatures. This is because notaries need to verify the authenticity of signatures and the identities of signers beyond a doubt. They are often notarizing critical documents in major transactions, including mortgage payoff documents and deeds. Successful transactions, sometimes worth millions, depend on the authenticity of signatures and identities.

The landscape is gradually changing with the advent of remote online notarization (RON), now in 47 out of 50 states. The shift to digital adds convenience and accessibility to real estate transactions, but it also raises legitimate questions about cyber security in a climate of frequent data breaches and wire fraud incidents. 

Learn the risks and the opportunities to safeguard business and clients while making the most of RON technology.

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What is remote online notarization?

Remote online notarization takes place when a notary verifies a signer's identity and signature during a secure, two-way, recorded audio-visual session. The signer confirms their identity by showing their ID document, such as their driver’s license or passport, to the webcam or uploading a photo and answering the notary’s knowledge-based questions, such as verifying unique details from their credit report. The notarial seal is applied electronically, rather than via the physical imprint used in person. 

During RON, the signatures can be wet signatures (ink on paper) or e-signatures (electronically typed or drawn). If wet signatures are collected remotely, the signer must still send the physical copies of documents to the other parties in the transaction, or bring them to the closing table. 

Remote online notarization is sometimes confused with e-closing for real estate transactions. E-closings are similar, and include remote online notarization for the documents that require it. Closing documents are signed remotely and electronically. If you lead a real estate business and want to host fully remote closings, you’ll need solutions for RON, secure online document storage, funds transfer, and meetings with all stakeholders.

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What are the benefits of remote online notarization?

Despite initial resistance to virtual notarization, RON took off during the pandemic when transaction participants needed safe ways to conduct business without risking their health. Since then, it has become more widely adopted, especially in instances when the notary and the signer cannot be in the same physical location. In cases where the signer lives in a remote area, faces mobility challenges, or is stationed on a military base, RON is a convenient and necessary solution. 

RON can also reduce costs and accelerate the pace of business. It can often eliminate the need to cover printing, shipping, meeting space, or document courier services. Similarly, lenders can reduce the duration of each transaction and add more closings to their schedules, earning interest on their loans more quickly. Instead of holding the capital in readiness for closing while attorneys and title companies martial the documents, they can expedite documentation and disburse the funds in a more timely manner.

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Is remote online notarization legal? Am I in compliance?

Physical notarial seals have been the legal standard since the 13th century, but remote online notarization is finally legal in 47 of 50 US states, excluding Georgia, North Carolina, Delaware, and the District of Columbia. While these few states have yet to pass laws permitting and regulating RON, most of them do honor online notarizations conducted by notaries commissioned in other states.

Real estate professionals and consumers should still research the specific requirements for valid RON signatures in their states since they can vary significantly. For example, there may be a state list of authorized RON software providers or licensed remote notaries. States also have unique licensing requirements for remote online notaries, separate from traditional notaries. Congress is actively considering the SECURE Notarization Act of 2023, which would set minimum standards for secure virtual notarizations across all 50 states, but the bill hasn’t yet reached the senate.

Additionally, each state’s RON requirements may fall short of the RON recommendations and requirements from MISMO, the Mortgage Industry Standards Maintenance Organization. Review the state and industry standards to ensure compliance.

Regardless of the state statutes or industry standards, underwriters may not consider all remote online notarizations valid. Similarly, cyber insurance policies may not cover all notarial acts. Real estate professionals should secure written approval and detailed expectations for valid remote online notarizations from their insurance providers. 

Is remote online notarization safe?

Remote online notarization is safe, but only with the right protections in place. Like other digital business practices, RON raises reasonable concerns about security in today’s wire fraud landscape.

RON software and safety standards are still emergent. Like any new technology, cyber criminals may capitalize on vulnerabilities while security providers test the capabilities, identify and close gaps, and work to keep pace with technical innovation. While the software and regulations are catching up, industry professionals may rightfully worry that cyber criminals can more easily use fake IDs and forged e-signatures in remote online notarizations, but licensed online notaries are now required to meet a high standard of security and identity verification.

Online notaries rely on knowledge-based authentication, requiring signers to correctly answer four out of five questions about their financial history or background in under two minutes. They are trained to deny blurry ID photos or clothing and accessories that obscure identities, and to recognize signs of duress or outside pressure on the signer. State regulations usually require them to use multifactor authentication to match the signer to the ID, and to conduct and record the session with encryption. These security requirements exceed standards for in-person notarizations.

The fact that, by law, remote online notarizations must be recorded also adds an additional layer of security to virtual signing. Recording dissuades fraudsters who cannot afford to leave audio-visual evidence of their crimes. That said, deepfake technology is becoming more advanced and harder to spot. So any virtual interactions should always be verified.

Consumers and regulators have also raised concerns about the safety of electronic seals. Theoretically, if a hacker can steal the electronic seal, they can bypass the authentication process and notarize their own documents, but electronic seals aren’t any more susceptible to theft or falsification than physical ones. The risk of counterfeit seals should not deter professionals from using RON, since the threat applies to all types of notarization. Users should adopt secure processes and technologies that thwart theft regardless of whether they are using remote or in-person notarization.

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What are the risks of using Remote Online Notarization, and how can I use RON securely?

While remote online notaries offer a transformative solution for streamlining real estate transactions, the associated cybersecurity risks demand a proactive, comprehensive approach to threat management. 

The threat of impersonation during notarization remains. Some cyber criminals are undeterred by the fact that remote online notarizations are recorded. If they have assumed a stolen identity, with sufficient data about a transaction participant, they can still convince a notary of their legitimacy during a recorded session.

Similarly, some online notaries lack training or otherwise fail to comply with security protocols. They may allow signers to join the virtual sessions without multifactor authentication or encrypted meeting software, or they may accept pixelated images of ID documents that conceal counterfeits. These cyber security pitfalls can allow imposters to manipulate real estate closing documents, and ultimately commit wire fraud.

Even more concerning, online notaries face the constant threat of data theft. Most state laws require online notaries to store session recordings for five to ten years. The data is typically stored in data warehouses, such as Amazon Web Services, but these repositories are well known for breaches. The recordings contain highly sensitive data on individuals’ identities, including the correct answers to knowledge-based authentication questions. If a hacker gains illicit access to this data, they can sell it to fraudsters or use it themselves to commit real estate fraud.

To mitigate all of these threats, title companies, real estate professionals, and consumers must look to providers like CertifID. The software offers end-to-end encryption for collection and distribution of sensitive information for all participants in real estate transactions. Moreover, CertifID Match compares ID document photos to biometrics, the unique physical characteristics ascertained from a simple selfie, and returns definitive confirmation that the buyers and sellers are who they claim to be.

With CertifID, business leaders can be confident in mitigating risks of wire fraud, despite any threats stemming from a RON data breach or a counterfeit signature. CertifID integrates seamlessly with existing title company platforms and complements virtual notary services that may already be in place.

Learn more from a CertifID expert and nullify the threat of fraud for your business and clients.