Virtual Real Estate Closures Go Mainstream, But Some States Hold Back

Property closures can now be done remotely in most states. This change has accelerated as more lives moved online during the pandemic. Mortgage lenders are lobbying the rest of the states to join too, but lawmakers are reserving.

According to the National Notary Public Association, 43 states now have legislation to permanently allow remote online notarization, which underpins virtual closures. Up from 22 early in the pandemic. The remaining seven states, including California, Connecticut, Georgia, Mississippi, and South Carolina, have not passed such legislation, while Delaware, Massachusetts, and Washington, D.C. are close to enacting legislation.

During the remote closing, the homebuyer will have a video conference with the lender, lawyer, and notary to verify their identity. Documents are signed electronically.

As the housing market slows, mortgage lenders say they are prioritizing new technology-enabled processes, including virtual closings.

“This is not a technical limitation. We now have all the technology that allows us to do a fully digital financial settlement. Chief Information Officer Brian Woodring said.

Brian Woodring, CIO of Detroit-based Rocket Mortgage, said:


Isabelle Busquet / Wall Street Journal

California legislators have been working to enact legislation to allow remote online notarization. The bill passed the state legislature this year, but issues remain that have prevented it from progressing in the state Senate.

Republican Rep. Frank Bigelow, who opposed the bill earlier this year, argued that stakeholders, including some notaries and real estate organizations, would impose several restrictions on out-of-state notaries, including provisions that would impose California’s strict regulations. He said he had expressed concerns about the provision. Notarization for state residents.

“Remote online notarization of documents may benefit California consumers, but unfortunately there were some outstanding issues with this measure,” Bigelow said.

In a letter to California legislators, the California Real Estate Association and the California Land Ownership Association said the provision for out-of-state notaries “is contrary to the long-standing doctrine of interstate recognition” as defined in the United States. It is written that Constitution. Additionally, other groups objected to the bill’s provisions, which they thought would make it easier for anyone to sue an online notary platform.

“There have been several attempts to come to a compromise with soothing language on both sides, but so far it’s in a holding pattern until we come up with something,” Bill said.

In Georgia, Republican Rep. Joseph Garrett sponsored two bills to legalize remote online notarization. Both stalled.

In Georgia, the closing of real estate requires the presence of a closing attorney. Garrett said it creates challenges to legalize remote online notarization.

Local lawyers fear that a large real estate company will control the closing process from start to finish without involving Georgians.

Senator Blake Tillery spoke out against the bill when it went before the state Senate in 2021. During his questioning, Mr. Tillery, a Republican, admitted that he was the defense counsel of last resort and added that he did not believe it would be a conflict of interest. Tillery didn’t respond to a request for comment.

Another member of Congress who voted to introduce the bill, Democrat Sen. Elena Parent, said, “I feel there is more to learn about the issue, and by introducing it, I am offering supporters and opponents a potential compromise.” It gave me time to work on it,” he said.

Fraud can be a risk in any real estate transaction, including those conducted remotely. There has been at least one high-profile case of remote electronic closing fraud.

Homeowner Mohan Phan will sue multiple defendants in Washington state in 2021, with another impersonating her to fraudulently sell a Seattle-area property for $900,000, according to court documents. claimed to have The case accused the notary of negligence, stating that the notary did not take adequate steps to verify the identity of the seller during the remote notarization process.

At the federal level, the House of Representatives passed the Secure Notarization Act in late July. This will allow notaries nationwide to perform online notarizations remotely. The bill is now moving to the Senate.

write destination Isabelle Bousquette at [email protected]

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