Note: specific audio-visual platforms referenced in this article may or may not meet all of the GSE’s standards. We advise you to research each platform for its adherence with Fannie Mae and Freddie Mac standards and speak with your title, escrow, lender, or underwriter partners for their preferences and standards.
By now, you may have heard the term “RIN” discussed as a remote notary option to enable fully-remote closings during COVID-19. RIN stands for remote ink-signed notarization, and it’s a temporarily-approved alternative to in-person closings in many states including Massachusetts, Texas, and Georgia (among others).
In a RIN transaction, a notarial ceremony takes place over an audio-visual platform such as WebEx, GoToMeeting, Zoom, or Skype. These transactions eliminate the need for in-person interaction and thereby reduce the risk of physical contact during a closing ceremony.
Questions around the viability of RIN for real estate transactions swirled shortly after many governors issued executive orders allowing for RIN during COVID-19. According to Google search data, searches for “remote notary” spiked dramatically in March and April 2020.
Despite public interest, title & escrow businesses were hesitant to move forward with RIN transactions due to concerns that underwriters would not insure these transaction types or that lenders would not approve RIN transactions (due to their inability to sell loans on the secondary market to GSEs such as Fannie Mae and Freddie Mac).
In April, these concerns were alleviated after Fannie Mae and Freddie Mac issued temporary guidelines for RIN transactions. Both government sponsored entities (GSEs) now allow the use of audio-visual services like WebEx, GoToMeeting, Zoom, and Skype (and others) to facilitate remote closings, so long as the technology meets their functional and security standards.
What’s remote ink-signed notarization (RIN)?
RIN transactions enable signings to take place remotely with the signer and notary in separate locations. The signer completes a “wet signature” (ink on paper) while the notary witnesses the signing over live, real-time video. These types of signings require the use of audio-visual technology such as WebEx, GoToMeeting, Zoom, and Skype (and others). No eSign technology is required for a RIN transaction because the actual signatures are wet-ink signed and not electronic.
Here’s how a typical RIN transaction works:
- Step 1: The homebuyer receives the closing package by mail or email (and prints out) and sets up an appointment for a RIN transaction with a notary.
- Step 2: The notary and homebuyer join a video call at the designated time using an audio-visual platform such as WebEx, GoToMeeting, Zoom, and Skype. (Note: these platforms may or may not adhere to Fannie Mae and Freddie Mac guidelines. Please work with your lender, underwriter, and title or escrow partners to determine the most viable platform.)
- Step 3: The notary validates the identity of the signer (the methods allowed for verification vary by state; however, Fannie Mae requires that the ID is validated via two-way audio video technology and captured via a photocopy or other electronic image).
- Step 4: The homebuyer wet-ink signs the closing documents while the notary witnesses the signature using the audio-visual platform. (According to Fannie Mae guidelines, the signer and the notary must be “physically located in the state where the notarial act is performed.”)
- Step 5: The homebuyer sends the signed documents to the notary via mail, in person, or over email and once the notary receives the package, he or she applies the notarial seal to the documents.
- Step 6: The notary maintains an electronic recording of the notarial ceremony for a minimum period designated by the state. Fannie Mae guidelines state that notaries should retain the recording for the period specified by applicable laws ( if no period is specified, then 7 years). Meanwhile, Fannie Mae guidelines state that the lender should maintain the recording of portions of the notarial ceremony for the life of the loan.
How does RIN differ from remote online notarization (RON)?
Remote online notarization (RON) can be easily confused with remote ink-signed notarization (RIN). After all, both transaction types include the word “remote” for their use of remote notaries to enable fully-remote, contactless signings.
Unlike a RIN transaction, in a RON transaction, everything is digital and completely paperless. No physical documents are used. Instead, the signing happens electronically—the homebuyer applies their signature to all digital documents with a click of a button using an approved platform. The notary then applies an electronic notarial certificate and tamper seals the digital documents. Unlike a RIN transaction whereby the notary confirms the identity of the signer over video, in a RON transaction, the notary uses tools built directly into the RON platform to verify the identity of the homebuyer through knowledge-based authentication questions.
Is it too late to get started with RIN?
In many states and cities, shelter-in-place orders have been extended for another month or longer. While the need for social distancing remains for the foreseeable future, now may be the time to consider RIN transactions as a stop-gap solution.
According to a recent survey by Qualia, more than 86% of title & escrow businesses are now using or considering the use of RON. RIN transactions may also be a solid intermediary step for businesses considering RON in the future. Getting your team set up with a fully-remote closing process with RIN before investing fully in RON will help your team understand the basic components and communication needed for fully-remote closings.
Here are some first steps to get started with RIN transactions:
- Confirm that your state allows for the use of RIN (and confirm when your state’s order expires)
- Talk to your underwriter and lender partners to confirm that they will accept RIN transactions (many underwriters and lenders are quickly adapting their policies to allow for RIN so be sure to ask for the latest information)
- Find the best, most secure video conferencing solution to fit your needs and the requirements put forth by your state and the GSEs. A viable video conferencing tool will include multi-factor authentication, passwords for entry, encryption of video storage, and the ability to record video sessions.
Remote notarization: the way forward
As the need for remote notarizations and contactless closings continue during COVID-19 and beyond, both RIN and RON will be valuable tools for title & escrow businesses and lenders.
Remote notarizations with RIN require less technology and may be easier to get off the ground in the short term than a RON transaction (which requires more coordination and technology investment than RIN). Most state-level executive orders allowing RIN are currently temporary; however, if RIN is permissible in your state, you may want to consider RIN as a stopgap solution to deliver remote notary options to your clients.