Home Appraisal and Mortgage Industry Innovation | The March Toward the Digital Mortgage
The digital mortgage will simplify the homebuying process, accelerate the mortgage cycle and change the appraisal and mortgage industries. But even if much of the technology is already there, key legislators can be slow to act.
For example, until recently, states haven’t needed to update notarial laws, which serve three purposes: To ensure that the notary verifies the identities of the signatories, guarantees participants sign of their own free will and obtains a record of the signing. By law the notary and signatories must do so in-person.
Now, the technology for digital notarization exists. Using two-way audio-visual communication (think Skype), screen-sharing technology and remote verification tools, notaries can perform all three tasks without meeting face-to-face.
State lawmakers, however, need to address two primary questions:
- Must signatories be physically present before a notary, or is their virtual presence sufficient?
- What are the geographic limitations for remote notarizations — must signatories be in the relevant state, or can they be in any national, or even international, location?
Six years ago, Virginia passed legislation authorizing notaries to notarize documents using two-way audio-visual equipment with signatories in any national or international location. Five other states — Indiana, Minnesota, Nevada, Texas and Vermont — have passed laws authorizing notaries to do the same, but only for signatories located in the United States.
The push for digital notarization has strong momentum behind it. Lawmakers are making slow but steady progress. We recommend lenders stay up-to-date on their county’s policies and their state’s legislation. As notarization and other parts of the mortgage process become digitized, lenders will be able to deliver a more efficient and less cumbersome homebuying experience.