- March 30, 2017
- All Issuing Offices
- UNDERWRITING - Electronic Signatures and Electronic and Remote Notarization
This Bulletin advises you of current requirements for insuring instruments involving electronic or remote notarization. For purposes of this discussion, use of the term “instrument” refers to documents requiring notarization for recording. This Bulletin does not address situations where the notarial acts are performed outside of the United States or where the signer is located outside of the United States.
ELECTRONIC SIGNATURE (eSignature)
Federal and state laws authorize and govern the use of electronic signatures, also known as eSignature. The signing process is akin to electronic signatures on a signing pad in a store or bank. The two principal statutes governing electronic signatures are:
1. The Electronic Signatures in Global and National Commerce Act enacted into law in 2000 (“E-Sign”, 15 U.S.C. 96 §7001 et seq.); and,
2. The Uniform Electronic Transactions Act (“UETA”), a uniform act that has been adopted in various forms by 47 states plus the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Illinois, New York, and Washington have not adopted UETA, but instead have enacted state electronic signature laws and regulations that apply.
E-Sign and UETA authorize and enable electronic signing but they don’t require any person to use or to accept electronic signatures. Disclosures to the customer and the customer’s consent to sign or receive documents electronically are required by E-Sign and UETA. Although electronic signatures are valid in all states, except Kentucky, many county recording offices are not set up to accept or record electronically signed instruments.
Neither E-Sign nor UETA require electronic filing of electronically signed documents. However, many states have adopted laws authorizing electronic filing such as the Uniform Real Property Electronic Recording Act (URPERA).
ELECTRONIC NOTARIZATION (eNotarization)
An electronic signature by the signer can be notarized, in the traditional manner (“wet” notarization), or electronically. Electronic Notarization, also known as eNotarization, is the process whereby a signer electronically signs an electronic document and the notary applies its electronic signature and electronic notary seal to the electronic document. The signer and the notary are in the physical presence of each other, i.e., they are in the same room. States that permit eNotarization do so under a variety of state laws and regulations, including UETA and the Revised Uniform Law on Notarial Acts (RULONA). For example, section 11 of UETA permits a notary public or other authorized officer to act electronically, pursuant to the following:
NOTARIZATION AND ACKNOWLEDGMENT. If a law requires a signature or record to be notarized, acknowledged, verified, or made under oath, the requirement is satisfied if the electronic signature of the person authorized to perform those acts, together with all other information required to be included by other applicable law, is attached to or logically associated with the signature or record.
A notary must continue to satisfy specific requirements (i.e., personal appearance, certification of identity, awareness and capacity, notary acknowledgement or witness attestation, notary certification, and notary seal, etc.) in the state where the subject property is located, in compliance with state notary laws.
Remote notarization, sometimes known as video or webcam notarization is the process whereby the signer and the notary are not in the physical presence of each other. The signer electronically signs an electronic document. The notary uses internet, audio, video or other similar technology to verify the signer’s identity, record (video) the proceedings, eNotarize the signer’s electronic signature, and perform notarial acts. However, most state laws still require a notary to be in the signer’s physical presence, i.e., the notary must be able to physically touch the signer, even if the document is electronically signed and electronically notarized. To date, only Montana and Virginia have enacted statutes and regulations which authorize their notaries to perform remote notarization.
While many states have proposed or pending legislation authorizing eNotarization and/or remote notarization, many states have specifically advised that remote notarization is not permitted.
As you are aware, all instruments are subject to state and local requirements in order to be recorded. As a reminder, the law of the state where the subject property is located governs recordation, not the law of the state where the instrument is prepared and executed.
The variety of state notary laws, the evolving nature of the new technology, and the unique issues presented by electronic notarization and remote notarization in the real estate context requires Issuing Offices to exercise care when asked to insure instruments that have been electronically or remotely notarized.
The Company requires the following in order to insure:
Requirements Applicable to eSign and eNotarization (In person or remote), Where Allowed
1. Issuing Offices must confirm in advance that the county clerk or recorder is willing and able to receive and record instruments by electronic filing (“eRecording”). If the county does not perform eRecording, the form and manner of execution and manner of eNotarization must be pre-cleared before closing and insuring.
Note: This Bulletin does not address original document requirements under state law. Please contact your local underwriter to discuss these requirements.
2. Issuing Offices must obtain written consents (which may be electronic) from all parties to the transaction, including the seller, buyer/borrower and lender, for the use of electronic signatures, including the Note and Mortgage/Deed of Trust. Click here for sample STG consent form.
3. Out-of-State Instruments: Issuing Offices must examine the signature page of all recordable instruments to confirm that they are properly executed and notarized in accordance with the state law where the subject property is located before insuring a transaction or sending the instrument for recording regardless of where an instrument affecting real property is prepared or where such instrument is executed.
4. If the state where the subject property is located prohibits eNotarization, you may not record or insure an instrument that you know to be eNotarized.
Additional Requirements Applicable to Remote eNotarization (Video, Audio or Webcam)
5. If the state where the subject property is located permits remote eNotarization and there are state laws or regulations governing remote eNotarization, you may only record or insure an instrument in such states that you know to be remotely eNotarized by a notary licensed in that state and only with approval of a Stewart underwriter.
6. Stewart underwriter approval of remote eNotarization will be subject to additional underwriting requirements including but not limited to certain technology and user authentication requirements.
7. If the state where the subject property is located prohibits remote eNotarization, you may not record or insure an instrument that you know to be remotely eNotarized. If the state where the property is located has no laws or regulations governing remote eNotarization, you may not record or insure an instrument that you know to be remotely eNotarized without approval of a Stewart underwriter.
If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.
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THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.