2024 Standards for Online Notarization

Deed fraud, or property fraud, rates are on the rise across the United States, with devastating and costly consequences for homeowners. The tactics used by fraudsters are becoming more sophisticated, making prevention increasingly difficult. While deed fraud cases remain relatively uncommon, the impact is significant, as a primary residence is often the largest asset owned by most Americans.

This post focuses on online notarization's role in preventing deed fraud, specifically highlighting why certified remote online notarization (RON) vendors are the only RON platforms you can trust for deed transfer transactions.

Prevent Deed Fraud by Working with Certified Vendors

MISMO Compliance

Throughout a real estate property transfer, buyers, sellers, listing agents, and county recorders may encounter several technology vendors. With so many options, it can be challenging to determine which vendors are trustworthy.

The Mortgage Industry Standards Maintenance Organization (MISMO) provides common standards across the mortgage industry, including a technology certification process that allows vendors to demonstrate compliance. MISMO standards are accepted by all entities involved in the mortgage process and are required by most regulators and housing agencies. The use of MISMO has led to increased efficiencies and reduced errors in the mortgage process.

The PROOF online notarization platform is certified MISMO-Compliant, meaning it offers a remote online notarization flow that meets MISMO’s strict standards. Completing a RON through the PROOF platform helps ensure the notarization process is safe and follows stringent requirements regarding identity verification, recording the notary process, audio and video capabilities, record storage, and audit trails.

Reasons to choose a MISMO-Compliant RON vendor like Proof:

1. 1.Greater confidence that the platform adheres to strict identity proofing and document retention requirements, which may exceed baseline state standards.
2. 2.MISMO compliance requires robust vendor vetting, including disclosure of platform specifications and a live platform demonstration.
3. 3.MISMO certification helps users evaluate the quality of RON vendors and determine their capability to handle RON needs.

Most deed fraud today occurs on a quitclaim deed and outside traditional mortgage closings. MISMO compliance provides greater assurance around documents presented to a county recorder and protects buyers and sellers later in the sale.

If a county recorder receives a quitclaim deed completed via RON and is unfamiliar with the platform, checking for MISMO compliance can confirm that the notarization met industry-leading identity verification and document retention requirements, regardless of individual state requirements.

The PROOF platform is compliant and registered in every state where services are offered to notaries.

If questions remain, the recorder may also check to ensure the notary who completed the transaction was authorized to perform RON by checking state databases. If the state requires platform registration before an online notarization technology vendor can offer services to a notary, the recorder can confirm that the platform used was authorized in the state where the notary is commissioned.

Outside of MISMO, other organizations in the real estate industry, such as Fannie Mae and Freddie Mac, have created vendor lists indicating which platforms have undergone review and meet certain minimum standards. Freddie Mac requires vendors to undergo a due diligence review of their systems, and Fannie Mae requires vendors to complete eNote technical compatibility testing. While these reviews are not required, vendors that have completed them have taken additional steps to comply with industry standards and expectations.

The PROOF platform is included on both Freddie Mac and Fannie Mae’s approved vendor lists.

SOC Compliance

Beyond RON-specific standards and certifications, technology vendors should go above and beyond to deliver trust in the notarization process. Undergoing a System and Organization Controls 2 Type 2 (SOC2 Type 2) audit is a popular way for companies handling sensitive customer data to demonstrate their commitment to cybersecurity and privacy.

SOC is a voluntary audit developed by the American Institute of Certified Public Accountants (AICPA) that allows companies to demonstrate to an independent auditor the controls they have in place to protect customer data across five key pillars: security, availability, processing integrity, confidentiality, and privacy.

Platforms such as the PROOF platform that undergo an annual SOC2 Type II audit operate using stringent security standards, reducing the risk of data breaches or unauthorized access. Platforms that do not undergo SOC2 Type II audits do not offer the same level of assurance and transparency.

Why is a SOC2 Type II audit important for a RON platform?

RON requires systems to process important customer data that could be damaging if compromised. By working with a RON platform that has undergone a SOC2 Type II audit, users can verify that the platform has adequate procedures in place to protect their most important data.

Thanks to the rigorous standards required of RON vendors like Proof, many industry groups see RON as a key solution to fighting property fraud. Organizations such as the American Land and Title Association (ALTA) support using RON for real estate transactions to help prevent fraud. ALTA encourages consumers to take precautions, such as requiring that “the notarization be performed by a vetted and approved remote online notary.”

With RON, parties to real estate documents are protected, as are those who rely on those documents. Platforms that have achieved the necessary certifications and approvals from both state governments and standards bodies provide the safest means to get a document notarized.

Qualities to Look for in a RON Provider

To ensure the safety and security of a real estate transaction, consider the following qualities in a RON provider:

• ​Does the platform support all required RON features as determined by individual state laws and regulations? These include:
  1. 1.Capturing consent for signatures
  2. 2.Providing a two-way A/V connection and storing the recording
  3. 3.Requiring identity proofing through a multi-step process
  4. 4.Providing electronic signature/seal support
  5. 5.Utilizing tamper-evident technology to prevent and expose alterations to a notarized document
  6. 6.Providing secure storage of A/V recording and notarial journal on behalf of the notary
  7. 7.Following all applicable federal, state, and local laws about privacy, data security, and record retention of electronic records
• ​Is the platform approved by the state (where applicable)?
• ​Does the platform offer additional security features, such as encryption of all data, tracking of application access rights, and document authenticity verification?
• ​Is the platform MISMO-Compliant?
• ​Is the platform an approved technology service provider by government-sponsored enterprises like Fannie Mae and Freddie Mac?
• ​Is the platform a technology service provider approved by a wide range of title insurance underwriters?
• ​Does the platform require training for notaries who use it?
• ​Does the platform offer tools to make RON easier and more efficient, like in-meeting chat and software integrations?
• ​Is technical support available?