Harry Gardner of Docutech on Remote Online Notarization Adoption
Harry Gardner is Executive Vice President of eStrategies with Docutech Corp., working in the greater New York City area. He began his professional career as an electrical engineer and ended up as a mortgage technologist and eMortgage evangelist, taking turns along the way as a network administrator, database systems designer and early internet systems designer. Since 2001 he has played a leading role in development, education and promotion of industry standards and guidelines for mortgage technology and eMortgages.
While at the Mortgage Bankers Association he helped lead and grow the efforts of MISMO and the eMortgage Workgroup for more eight years. After transitioning to private industry in 2009, he gained the industry perspective of the technology solutions provider, and continued his leadership role in MISMO, first as Chair of the Residential Governance Standards Committee and then as a member of the Board of Directors.
In 2009, Gardner was recognized by Mortgage Banking magazine as an “eMortgage All-Stars” in 2009. In 2018, he earned his second MBA Tech All-Star Award. In 2012, Mortgage Technology magazine recognized Gardner’s contributions with the Steve Fraser Award, a lifetime achievement award that recognizes the accomplishments of an outstanding mortgage technology innovator, visionary or evangelizer.
MBA NEWSLINK: You and others have been pushing hard for greater acceptance of Remote Online Notarization. Given that most of us are, as of this writing, working from home–with face-to-face interaction for now a thing of the past–wouldn’t widespread RON adoption seem like a no-brainer?
HARRY GARDNER, DOCUTECH: We are certainly in the midst of unprecedented change to our society today. Our hearts go out to everyone adversely affected by the pandemic, and we may never be able to adequately express our appreciation toward the medical professionals, first responders, and legions of supporting staff – all heroes who are putting their lives at risk every day to care for the rest of us.
You’re right, close personal interaction may continue to have some risk for months to come, and RON can fulfill a critical gap to allow many important transactions to be executed with no person-to-person contact, supporting the health of borrowers, real estate and lending professionals, and the community. It’s also just a more convenient way for most borrowers to close on their mortgages – especially those who may have mobility challenges or who are deployed overseas. At Docutech, we’ve been working very hard to accelerate and scale our ability to support RON eClosing transactions through our integration with NotaryCam.
What is preventing more widespread adoption of RON eClosings by the lending community?
There are still challenges for lenders to adopt widespread RON eClosings, but the picture is improving. Fannie Mae and Freddie Mac recently revised their guidelines to expand and align their acceptance of RON-closed eNotes to 42 states plus Washington DC. Lenders also need to have confidence that the county clerk will accept a RON-notarized deed of trust for recording. The good news is that some eClosing solution providers can already handle all of that complexity for the lenders – we do that through our relationship with Simplifile (they have detailed knowledge of all the eRecording counties in the country) and we call it “eEligibility” – allowing the lender to let every loan “be as ‘e’ as it can be.”
NEWSLINK: What do you see as some of the barriers that have caused some states and jurisdictions to resist? Do you see that resistance falling away?
GARDNER: The patchwork of state RON laws has definitely been a challenge for achieving widespread adoption. But the pandemic crisis has created unprecedented recognition and discussion of this issue, and the state- and federal-level efforts to create broader acceptance show that lawmakers now understand how RON eClosings can provide a great technology solution allowing transactions to move forward in a way that supports social distancing and the health of borrowers, real estate and lending professionals, and the community.
NEWSLINK: MBA and the American Land Title Association have developed a widely used set of guidelines for states in crafting RON legislation. MISMO standards also accommodate RON. Now, we now have federal legislation–a Senate bill from Sens. Mark Warner, D-Va., and Kevin Kramer, R-N.D.; and a House bill sponsored by Reps. Madeleine Dean, D-Pa., and Guy Reschenthaler, R-Pa. Do you think a national RON standard is preferable to the current patchwork of state laws and non-existent standards in some states?
GARDNER: Absolutely! The underlying principles of basic notarization, now extended to Remote Online Notarization, are consistent nationwide: A notary is there to witness the signing of certain documents, to determine within reasonable standards that the signer is who they say they are, and to observe that the signer is not signing under duress. RON uses KBA (Knowledge-Based Authentication) to validate the borrower’s identity and through the security of the electronic signing process, including an audit trail and a video record of the signing event. We’ve already seen some of the early-adopter RON states recently move to align their RON laws with more-current standards, as we’ve learned a lot over the past eight years.
A national RON standard would accelerate RON adoption and greatly improve assurance from the investor viewpoint. Our parent company, First American, has played a leadership role in developing the American Land Title Association and Mortgage Bankers Association model legislation released in 2017 that served as states’ preferred RON legislation framework, heavily influenced the MISMO Standards for RON approved in 2019, and has also been deeply involved in the development of the Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act of 2020, which has been introduced to the U.S. House of Representatives and Senate and would permit nationwide use of RON.
NEWSLINK: Docutech has an integration with NotaryCam, whose founder, Rick Triola, is a fierce advocate of RON. How does the integration work?
GARDNER: Through Docutech’s integration with NotaryCam, the remote online notarization experience is integrated within the Solex eClosing platform. The closing documents never leave the secure Solex environment. The closing package is already tagged for eSignatures when we generate it, and the SMART Doc eNote is inherently part of the package. The title agent easily reviews the lender docs using the Simplifile agent portal that so many of them are already familiar with and can easily upload and tag the title docs there.
So the borrower is seeing the same eSigning environment they’ve seen for the life of the loan, the documents don’t move out to the RON provider’s system and back again, the lender docs are pre-tagged for eSignatures, and the eVault is tightly integrated into the whole process for all the lender’s eClosings, in-person or RON. We push the eSigned docs back to the lender via our LOS Pushback function, and the eNote is instantly tamper-sealed and registered on the MERS® eRegistry. The eNotarized docs are also automatically pushed to Simplifile so the closing agent can kick off eRecording with just a click. And when the eRecorded docs are returned by the county recorder, Simplifile pushes them to us and we use LOS Pushback to return them to the lender automatically.
NEWSLINK: As chair of the Electronic Signature and Records Association, what do you see as ESRA’s role in helping move the process along?
GARDNER: ESRA has long been an advocate for consistent, open, and technology-neutral laws and regulations to better-enable eSignatures and digital transformation. We have encouraged Congress to support and enact the SECURE Act, along with our partners at MBA, ALTA, and other forward-thinking organizations. One of the fundamental keys to the success of the ESIGN Act, dating all the way back to June 2000, was that it was technology neutral and thus allowed vendors to develop creative, competitive and ever-improving solutions with eSignatures at their core.
NEWSLINK: Is it too early to look at where the next digital battlefield might be? Where else do you see a need toward more widespread digital mortgage adoption?
GARDNER: Well, eNotarization and eRecording have long been challenges in the eClosing space, so it’s really great to see so much forward progress in the last few years. The other major hurdle is, of course, investor adoption – we still need much broader, uniform investor support for eNotes, so that lenders can use eNotes for most of their loan production. Fannie Mae and Freddie Mac have been “open for business” for many years now, and Ginnie Mae and the Federal Home Loan Banks are in the midst of their adoption rollouts this year. Hopefully that will spur more investors to move into mainstream eNote acceptance too.
As you well know, I’ve been saying that mainstream eMortgage adoption is “only three to five years away” since way back in 2003, but it’s never felt more true than right now, with so much forward progress happening on multiple fronts.
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