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Remote online notarization (RON) continues to stake its claim as a critical innovation for real estate professionals and homebuyers, opening the door for faster closings and largely eliminating the need for in-person meetings.
However, enhanced accessibility and improved security has also come with regulatory challenges and risks that every stakeholder in the property transaction process must navigate.
To address these challenges, federal legislation such as the Securing and Enabling Commerce Using Remote and Electronic Notarization (SECURE) Act has been out forth aiming to establish a nationwide RON framework and ensuring that notarized documents are accepted across all states.
Proponents of a uniform federal law say it would simplify compliance, improve transaction efficiency, and create a level playing field for real estate professionals operating across multiple states.
States, industry steps up
While the SECURE Act was first introduced in Congress in early-2023, talk of the legislation and anything resembling it has stalled since then.
In the meantime, states, RON providers and those putting the technology to use have stepped up to create a well-functioning status quo in the absence of federal guidelines, according to William Kooper, vice president of state government affairs and regulatory policy with the Mortgage Bankers Association (MBA).
“Federal legislation has unfortunately not moved forward since first considered during the COVID-19 pandemic,” he told HousingWire. “During that time, however, more than a dozen states have adopted RON laws in a generally consistent manner. The 45 states that have done so, do not suggest that there is a patchwork of state laws.
“The reality is quite the opposite. The only state that is an outlier at the moment is Connecticut, where they excluded real estate finance transactions. MBA is hopeful that ongoing industry advocacy will help change that situation and add Mississippi, Alabama, Georgia, and South Carolina as RON states.”
Some states, like Florida, Virginia, and Texas, have broad and well-established RON laws, while others impose restrictions or require notaries to be physically located within state boundaries.
Brian Webster, president of Stewart Title-owned RON provider NotaryCam, said he does not expect significant talk of the SECURE Act to resume in Congress anytime soon.
“Notarial laws are defined at the state level and while a federal rule permitting remote online notarization exists, it is still extremely difficult to define a blanket law that is able to address the nuances across the states,” he said. “During industry reviews, there remains several questions about how the federal preemption applies across the states and types of different transactions where RON can be applied.
“Secondly, there are currently 45 states and the District of Columbia that have a form of RON legislation on the books. This is up significantly just in the past few years after the push for federal legislation. Given these two factors along with the priorities of Congress being focused elsewhere, the push for a federal law has lost its momentum.”
Improving security, seeking ‘model regulation’
Webster said a big step in promoting wider adoption of RON is mitigating concerns over fraud, especially with the continued onslaught of such crimes targeting the real estate industry as well their increased sophistication.
“The number one concern on all stakeholders’ minds is fraud,” he said. “While RON is not new, it is new enough that these transactions still get attention above the legacy paper process. While the goal is to completely prevent fraud in any transaction, there will always be criminals one step ahead of the industry protections. What stakeholders are not taking into account is that the identity verification steps and solutions used today for RON transactions are light years ahead of what is used in a traditional paper process.
“RON vendors use sophisticated technology solutions to perform forensic audits on the signer’s identification to determine authenticity that a human eye cannot compete with. In addition to the standard leverage to confirm the signer’s identity, recording the transaction is an added deterrent for criminal behaviors.”
Kooper said legislation enacted in Texas helped provide an early jumping off point for proponents of nationwide legislation.
“Since December 2017, when MBA and the American Land Title Association released their model legislation, which was largely based on language from law enacted in Texas earlier in the year, there has been a model for state RON legislation,” he said. “A second model was added later in 2018 when the Uniform Law Commission released its model RON law for states. The two are very similar.”
Additionally, the Mortgage Industry Standards Maintenance Organization (MISMO) convened a working group of volunteers to develop model regulations to assist states in the regulatory implementation of these laws, Kooper added.
Looking ahead
The lack of nationwide guidelines proved to be a more daunting hurdle for RON providers in the early days of the technology’s use, as compared to today with nearly all states utilizing it, Webster said.
Even with a wider network of states making use of RON in 2025, he said further oversight from the federal government that doesn’t undo progress already made would still be welcomed.
“Early in RON adoption where there were limited states permitting RON and limited stakeholder participation,” Webster said. “It was a daunting task for lenders and title companies to manage the variations across each state, underwriter, lender and investor. This proved to be too much for most organizations to manage and, therefore, they chose not to move into the space. The benefit of federal regulation would at least solve a few of these hurdles, but ensuring the state location of the subject property would not need to be taken into consideration to determine RON eligibility.
“Without this federal blanket, the industry still needs to take property location into account not just at the state level but also consider the recording jurisdiction as well. However, with 46 states having a form of RON legislation in place, managing the RON eligibility based on property location has become manageable for the industry.”
Kooper said regardless of what comes next with federal regulation, states and industry stakeholders should be proud of the framework they’ve created.
“In the development of both model state laws and regulation, perhaps the most important lesson is that broad stakeholder engagement in the process of developing each proposed set of standards has proved to be more than just inherently good common sense, but also the reason each have shown to be durable as public policy,” he said.
