When the COVID-19 pandemic hit in 2020, the initial challenges within real estate were endless — and how to conduct closings on home loans might have been at the top of that list. Enter the onslaught of eClosings, where homebuyers close on their loans electronically as opposed to signing physical documents in person. It’s easy to understand why digital closings are attractive: it’s way more convenient, streamlines the process and is one more thing we can get done in our pajamas. So, when can we expect digital closings to become the norm? By looking at American sentiment and current legislation, digital mortgage closings could be federally legal by next year.

Americans are comfortable completing their financial transactions online

First of all, it’s important to recognize the changing public opinion when setting expectations for digital closings. In a recent study conducted by Notarize, results found that most Americans feel secure in completing their financials transactions online: 

• 81 percent of U.S. adults feel secure in digital transactions. 
• Nearly 70 percent of Americans wish there was a faster way to get documents notarized.  
• 59% believe the traditional way of notarizing a document is “outdated.” 
  

Not only are Americans becoming more comfortable with the idea of remote online notarization, but the traditional way of notarizing seems to be becoming outdated. Essentially, traditional notarization is inconvenient and has yet to evolve with the times. On the flip side, there is still some hesitancy when it comes to digital closings for the older generations and when it comes to the safety factor. In order for customers to feel safe closing remotely, the industry needs to enable technology that provides enough security. 

Legislation is in the works to allow for remote online notarization (RON)

Lawmakers introduced a bill in 2021 that would make for the immediate legality of remote notarization in all 50 states. The act, titled Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act of 2021, would allow every notary in the U.S. to perform RONs and is even endorsed by the National Association of Realtors (NAR). 

Current law in many states prevents the use of remote online notarization, including California. However, the current guidelines aren’t practical for many homebuyers or refinancers — especially ones who are living through a global pandemic. In-person closings clearly can’t follow social distancing guidelines put in place for the COVID pandemic, and they put obstacles in place for many people who have completely adjusted and prefer signing important documents online.

The bill addresses safety concerns

A primary concern for digital closings remains the safety issue — can they be as secure as a traditional notarization? Luckily, the SECURE Act has incredible authentication requirements including tamper-evident tech, multi-factor authentication and an audio-visual recording of the signing. With security being the primary concern of those who do not feel comfortable with digital closings, prioritizing authentication could mean we are just one step closer.

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