Since 2012, the Commonwealth of Virginia has allowed for Remote Online Notarization (RON). Despite being approved for nearly a decade, Jeff Nowak, Founder and Principal Attorney of Cobalt Settlements headquartered in Arlington, Virginia, says that many of his peers did not adopt RON until necessity struck during the COVID-19 pandemic. While RON adoption numbers for the state of Virginia are not publicly available, the use of RON increased across the country by 547% in 2020 compared to 2019.
Nowak is encouraged by the accelerated adoption of RON. Cobalt Settlements specializes in real estate closings in northern Virginia and the Washington, D.C. area and has been doing RON closings for 5 years. Nowak, who has over 20 years of experience in the Virginia and Washington D.C. real estate title industry, is passionate about sharing his knowledge with real estate professionals in his market, including his approach to incorporating RON into closings. We sat down with Nowak to discuss his experiences with digital closings and how the pandemic has impacted the Virginia market’s movement toward RON.
Qualia: Virginia was the first state to enact RON legislation. Do you think the state was ahead of the curve to handle RON closings when the pandemic hit?
Nowak: Virginia was ahead of the curve when it came to the existing laws in place to allow RON closings. Other states had to enact emergency legislation to allow for digital closings. The issue that is preventing the widespread use of RON in real estate closings is lenders requiring “wet signatures” on the loan documents which cannot be accelerated by individual state law. However, COVID-19 accelerated the use of RON especially on the sellers’ side of the closing where they are signing the document that transfers the title to the property from the current owner to the buyer. Cobalt was using RON occasionally but infrequently prior to the pandemic but has increased RON use on the seller side of a closing dramatically ever since. We are at the point where over half of our sellers are using RON technology to complete their side of the settlement. Even as our state is opening back up, my sellers continue to choose RON. We had a closing today where the sellers were able to stay in the comfort of their own home rather than driving to our office. This flexibility makes the process extremely convenient for our clients.
Qualia: Do you think other title businesses in Virginia have a similar outlook on the importance of RON during the pandemic?
Nowak: Based on my experiences with “split settlements” which are situations where the seller chooses to work with a company other than the buyer’s chosen settlement company, the use of RON is increasing. However, there is a disparity in the enthusiasm among title agencies. Some title agencies accept but do not encourage the use of RON whereas other companies like Cobalt actively promote RON use at every opportunity.
Qualia: So is it safe to say that RON is now an important part of your offering?
Nowak: Absolutely. I’m building the future of my company based on RON. In fact, for years, people have been asking us, “Why can’t we do this digitally?” As I’ve mentioned earlier, Cobalt has fully implemented RON in seller-side closings and one of my 2021 goals is to identify mortgage lenders who will accept RON signed loan documents and engage with these mortgage lenders to be a trusted title partner.
One of the major differences between Cobalt and some other title companies that use RON is the fact that all closing attorneys at Cobalt are certified e-notaries which means Cobalt customers are receiving a full-service digital closing from an expert with knowledge of the local laws and customs and the specifics of the transaction. Some other title agencies outsource the e-notary signing session to a 3rd party vendor, where the actual signing is overseen by a notary that does not have case-specific knowledge and whose primary role is to notarize documents.
Qualia: It sounds like RON is an important investment for Cobalt Settlements. Are digital closings an all-or-nothing approach for you, or will you still invest in in-person experiences?
Nowak: Cobalt is a service-first company and caters to customers and business partners who care about how things get done; not just that it gets done which means we will incorporate RON as much as possible but will continue to deliver the personalized service that Cobalt is known for. I have a vision for how a settlement should go and we adjust based on our customers’ specific needs. This experience is what we call the Cobalt Way. We outline all the different services and signing options via a welcome video when we open a settlement file and while we use state-of-the-art technology, like Qualia. We also have secure workarounds for those who are technologically challenged. It’s a catered experience where we pay attention to every detail to protect one of the most significant investments our customers will make in their lifetime in a manner that is sensitive to each customer’s particular needs. It shouldn’t be all about convenience. Everyone should understand why and what they’re signing. You need a professional to help guide you through the process.