Mortgage lenders often require borrowers to sign their closing paperwork in the presence of a notary public so that their identity can be confirmed. However, for borrowers who are moving across the country or purchasing a home prior to returning from overseas military duty, this can be inconvenient, expensive, and time-consuming.
This issue affects a large number of buyers every year, and it is something that many lenders have also found inconvenient. One issue is that the laws regarding notaries and notarization differ from state to state. A few states have adopted laws allowing for remote notarization, which allows buyers to use Skype or another type of video conference to speak to a notary and verify their identity. Homebuyers are required to answer a number of questions before the video call to further verify that they are who they say they are. Once all of this has been completed, the notary will officially sign off on the mortgage paperwork.
While these changes are helpful, they are not yet widespread. Moreover, laws regarding remote notarization are not being implemented consistently from state to state. A number of lawmakers are working with lenders to help change laws to make this an option for borrowers. Quicken Loans and USAA, both major names in the mortgage industry, advocate for the recognition of remote notarization. Freddie Mac and Fannie Mae also support the idea.
In addition to helping homebuyers, electronic signatures would also cut costs for lenders and notaries.