Operationalizing remote online notarization has been on lenders’ to-do lists for several years now. 2024 could be the ideal time to make it happen – and doing so will leave lenders better prepared for shifts in volume.
Past years have taught lenders that providing borrowers with an easy, flexible and convenient mortgage process is essential to winning their business and loyalty. Not only that, but the efficiencies experienced by the consumer also improve lenders’ turn times as well. It’s no wonder so many lenders have stepped up their digitization efforts. With all the advancements and improvements in mortgage technology, digitization has become essential in the process. It has enabled lenders to connect with borrowers where they are, elevating the consumer experience in order to differentiate themselves in a crowded market. Unfortunately, many lenders have stopped short of digitizing the process through closing, which is bad news for borrowers and lenders. When asked, 42 percent of respondents from the 2024 ServiceLink State of Homebuying Report (SOHBR) stated they wanted less paperwork and more electronic forms. This data point should be closely considered. Lenders who opt not to digitize their processes are at a disadvantage as they are missing out on important new efficiencies and attracting customers in an increasingly digital world. Another data point worth highlighting from that same survey shows that 60 percent of respondents eSigned documents, which is up 48 percent from 2023, demonstrating how prominent that technological shift really is.
eClosings, particularly those incorporating full remote online notarization, streamline closing and post-closing. Remote online notarization (RON) eliminates the need for in-person meetings, frees notaries to certify more documents in less time, and results in fewer errors — inconsistencies including missed signatures, initials and dates — which can significantly reduce turnaround time. Lenders’ delay in transitioning to RON is understandable. In 2020 and 2021, origination volume was through the roof, and they needed all hands on deck to simply manage that volume, let alone try to implement organization-wide RON protocols. This lower volume environment presents an opportunity for lenders to change their processes and prepare for the uptick in volume to come. Moreover, operationalizing RON doesn’t need to be difficult, says Marc Bator, vice president and principal product manager of EXOS® Close at ServiceLink. “Making RON closings a ‘business as usual’ option for borrowers should be a priority for lenders this year. That doesn’t mean upending the organization; it means working with a forward-thinking settlement services partner who can provide the technology; help you navigate the needs, expectations and requirements of the various players involved; and create an unrivaled consumer experience,” Bator explains.
Transitioning to RON: The challenges and solutions
Transitioning to RON may seem daunting but careful implementation can remove complications. For starters, it’s important that lenders’ have a full understanding of the landscape, including legal compliance, underwriter requirements, county restrictions and more. It’s a complex scenario but quite manageable with the right partner, Bator says. He discusses one area of note, county filing requirements, to illustrate how essential a knowledgeable partner can be. “With some variances, all states have adopted similar protocols for RON closings. In contrast, counties can make some of their own rules. So, while the state may say you’re good to go with RON, certain counties within that state may refuse to record electronically notarized documents,” he explains. “ServiceLink can instantly determine whether we can file a document electronically or need to send it in a different way. We remove the burden of navigating the varying requirements from our lender partners so they can close quickly and seamlessly.”
Another major challenge lenders face is implementation. Trying to implement RON across their entire organization with so many players involved can be tricky. Even if the organization has a centralized processing unit, there are likely to be multiple vendors with multiple processes, and multiple underwriters. The way to go about this is by creating a process that addresses the needs of every stakeholder — loan officers, underwriters, processors, closers, vendors and borrowers. While this can become an overwhelming task, Bator focuses on simplifying that task. “It doesn’t need to be overcomplicated. When a lender asks us to do their closings, we simply digitize their existing signing process,” Bator shares. “They send us docs just as they would for a wet sign. We digitize them, assign an eNotary, and the signing happens online. With EXOS Close, we can even incorporate the scheduling. The borrower can select remote or in-person closing, and then self-schedule a time that’s convenient for them.”
Not all settlement service providers are equipped to provide this level of support; however, ServiceLink has a panel of hundreds of RON-ready notaries spanning a broad scope of states and working across many platforms, has executed thousands of RON closings, and has collaborated with lenders of all sizes in various stages of RON adoption. “While some lenders prefer for us to do all of their closings and signings, others may need support in standing up pilot programs. We have the people, technology and ideas to help in whatever capacity is needed on the journey to full RON,” Bator says.
Demand for alternate signings continue to rise
While this shift to RON seems to be happening fast, there are still other options to ease the transition. One option is an in-person electronic notarization (IPEN), a virtual closing where the borrower eSigns with an in-person notary. IPEN offers many benefits, like reduced post-close issues and instant document transfers and disbursements, while still offering that face-to-face or in-branch closing experience. Another option that offers the same benefits, and more, is a hybrid closing.
Hybrid closings allow borrowers to sign the majority of their documents — basic disclaimers and other non-notarized documents — prior to the wet sign or online notarization. Since hybrid closings give the ability to test the waters on a smaller scale before diving into full RON, they have become very popular among lenders, with ServiceLink’s volume more than doubling since January 2023. “We have supported many lenders through hybrid pilots,” Bator says. “We help them figure out the best pilot area, develop and implement the process, and then plan how they can most efficiently expand that process enterprise-wide and ultimately transition to full RON.”
How to transition to RON
As data continues to trend toward embracing technology, we can expect to see many lenders moving decisively toward RON closings. If you are among them and would like more information about the various paths available, contact ServiceLink today.
Find out more about the benefits of RON here.
