The Digital Mortgage For Title Agents Westcor Land Title Insurance Company. All Rights Reserved

Transcription

1 The Digital Mortgage For Title Agents 2018 Westcor Land Title Insurance Company. All Rights Reserved

2 1. Definitions 2. erecording Overview 3. esignature Overview 4. Methods to Close 5. Availability 6. Westcor Agents: Getting Started 7. When to Use Online Signings and Notarizations 8. Consumer Benefits 9. FAQ Agenda

3 Definitions A digital mortgage is one where the critical loan documentation, specifically the promissory note, exists in digital format. It is executed electronically, transferred digitally and ultimately stored digitally. Adapted from MBA An eclosing involves electronic execution of the entire closing package. There are both in-person eclosings and remote online eclosings being executed today.

4 Models of erecording Model 1: paper originals/wet ink signatures Model 2: paper originals/wet ink signatures; indexing data Model 3: fully electronic documents, including signatures & notary Can produce Model 1 & Model 2 style submissions

5 Model 1

6 Model 2 Plus indexing and other information about the document(s) being submitted. Such as: <document>deed</document> <Grantor1Surname>Smith</Grantor1Surname> <Grantor1GivenName>John</Grantor1GivenName>

7 Model 3 PDF Document PDF Presentation precise form and layout View - Data Mapping - Validation & Security Electronic Signatures XML Data Standards PRIA, MISMO

8 ESIGN Electronic Signatures in Global and National Commerce Act (ESIGN) Federal act signed in U.S.C Definition: An electronic signature is an electronic sound, symbol, or process, attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record. 15 U.S.C. 7006(5)

9 ESIGN ESIGN also provides: A signature, contract or record may not be denied legal effect, validity, or enforceability solely because it is in electronic form. 15 U.S.C. 7001a(2) If notarization is required, it is satisfied by an electronic signature with other information required by law attached to or logically associated with signature. 15 U.S.C. 7001g

10 UETA Uniform Electronic Transactions Act (UETA) Passed in 47 states, D.C., and the Virgin Islands Exceptions : IL, NY, WA Like ESIGN, assures that electronic signatures and electronic transactions have the same legal effect as paper signatures and paper transactions Ohio UETA is in O.R.C et seq.

11 UETA and enotary O.R.C (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.

12 So, What Exactly is an Electronic Signature? Electronic Signature means an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with present intention to sign (authenticate) a record. This definition includes (for example): Typed names, A click-through on a software program s dialog box, Biometric measurements, and A digitized picture of a handwritten signature For emortgages (and enotes), evidence of document tampering or alteration is usually provided by Public Key Infrastructure (PKI) regardless of the type of electronic signature employed

13 Non-Propeller Head PKI Process Everything (characters, images, headers, footers, page numbers etc.) in the document is pumped through a process to create what we will call the fingerprint. Any change to the document alters the fingerprint. The fingerprint is then locked with a private key and stored inside the document or logically associated with the document. The fingerprint can be validated with a public key.

14 How PKI Works, Signer Math Math Math Electronic Document Math Math PKI Digital Signature (Wrapper) Fingerprint Private Key

15 How PKI Works,Receiver, Part 1 Math Math Math Math Math Fingerprint 1 Electronic Document

16 How PKI Works,Receiver, Part 2 Public Key Fingerprint 2 PKI Digital Signature (Wrapper)

17 How PKI Works, Receiver, Part 3 Does =??? Fingerprint 1 Fingerprint 2 PKI Digital Signature (Wrapper) Verification Yes secure No -- something happened!

18 Reality?

19 emortgage

20 emortgage

21 emortgage

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23 enotary

24 enotary

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26 Methods to Close In-Person The signer travels to a title/settlement office, sits down with the closing agent and a notary to execute documents electronically (typically on a tablet device). Remote Signer The signer and notary are both remote (i.e. not in a closing agent s office). Often referred to as mobile notary. Remote Online Notarization The signer connects with the closing agent and a notary via audio/video technology (no travel on either side) to execute documents 100% electronically (from a computer, tablet or mobile device). Hybrid The signer may meet either remotely or in person with the closing agent and a notary. Some documents are executed electronically and others are wet signed (when the note is wet signed this is not a fully digital mortgage).

27 Availability 27 States actively closing online with remote notarization and title underwriter support through Westcor counties accept erecording for deeds (covering 86% of the US population) 30: number of minutes it takes to complete an average digital signing on Notarize 10 states with legislation pending to empower their notaries to perform remote notarization. 2 GSEs that are currently purchasing loans remotely closed online

28 Getting Started Create an account on the Title Agent Network of Notarize, Inc., which is currently the only technology platform approved by Westcor. Start by going to Learn how to use the Notarize Title Portal. Sign and return the Westcor Remote Online Notarization addendum to the IAA. Be sure to complete your profile in Closepin ( Tell your lenders that you are approved for Remote Online Notarization

29 When to Use Online Notarizations Lender + Title Collaboration Title Only Refinance Purchase (Buyer Side) HELOC w/ Title Insurance Purchase (Seller Side) Cash Purchase (Buyer Side) Trailing Docs

30 Consumer Benefits Document review No more paperwork Reduced errors Closing convenience Many consumers are frustrated by the short amount of time they have to review documents. A digital mortgage allows them to easily review documents prior to the closing. Reviewing and signing electronic closing documents streamlines the process for consumers and (literally) lightens the load to store paperwork Consumers are less likely to sign trailing documents or resign documents due to errors with an eclosing. Remote online notarization allows consumers to sign from their home, after work or settling kids in bed. They can even stop to make dinner or run an errand and return to complete their closing.

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32 FAQ How can an agent participate in the Westcor approved remote online notarization program? An agent who is interested in participating in remote online notarization should take the following steps in the following order: 1. Go to and view the demo, talk to a Notarize sales representative, complete introductory training and sign a service agreement with Notarize. 2. Upon receipt from Notarize of confirmation that an agent has registered, Westcor will send the agent a remote online notarization addendum to their issuing agency agreement. 3. Go to and complete the agency profile and sign up. Upon receipt of a fully executed remote online notarization addendum, Westcor Specialty will update Closepin to indicate that the agent is eligible to participate in remote online notarizations. How does the remote online notarization process work? The online procedure is facilitated through use of a secure connection platform provided by Notarize. The platform is made available to the consumer using a pre-determined online access password and link unique to the signing event and available only to the consumer, the Notarize notary, and the title agent.

33 FAQ How does the Notarize notary verify the identity of the signer? The process involves a substantially higher level of identity validation than in a traditional notarial act. At the outset of the online transaction, the signer is required to go through an identity validation process using knowledge-based authentication (KBA) facilitated by major database providers such as Lexis-Nexis. The KBA process uses the signer s identifying information (which itself is first validated against online databases) to generate five questions based on matters of the signer s unique personal knowledge. The KBA standards are set by the Federal Bridge Certification Authority s Antecedent In-Person Proofing Supplement. Successfully answering the questions is a prerequisite to continuing the online notary transaction. If the customer succeeds, his or her identity is validated to the heightened standard required by applicable Virginia law, where the commissioned notaries currently are located and operate.

34 FAQ Is there an existing demand for this alternative form of signing? Currently there is one national lender - United Wholesale Mortgage (UWM) - that has contracted to use the Notarize procedure. UWM is the largest wholesale lender in the country and beginning February 17, 2018, UWM will advise their network of brokers that remote online notarization is available, but only through Westcor agents. Several additional lenders have been waiting for (a) a major underwriter to commit to this process and (b) Fannie and Freddie to agree to buy loans closed in this manner. With the Westcor/Notarize announcement, as well as the confirmation from Fannie and Freddie that they will accept loans closed through this procedure, we understand that additional lenders are actively registering with Notarize.

35 FAQ Can the closing agent participate in the signing? At present the platform is set up to facilitate remote notary signings where the agent does not attend in person. To accommodate those agents who wish to participate in the signing or have the option to do so, Notarize has developed an enhancement to provide this capability. A beta of that new feature will be tested, and upon validation, multiple parties will be able to participate in the signing. This is new technology and it is evolving every day. We expect this enhancement will be available within the next two weeks. Here is a link to a recent press release from Notarize about their enhanced agent participation portal: Other underwriters are telling me this is illegal. Westcor s legal team has researched the law in the states we have identified as eligible for this program. We believe the Notarize model is compatible with the applicable laws in those states.

36 FAQ Who is responsible for seller identification fraud? It is our opinion that the KBA procedure described above, which includes verification of the signer's government issued identification, is a substantially superior way to mitigate against identity theft. In the event a fraudulent transaction occurs, it will be handled the same way Westcor's claims office deals with fraud today. Are the local clerks going to accept the recording? Westcor has limited eligibility to those counties that are equipped to receive electronic recording of documents. Our analysis of the relevant statutes of the 20 states we have identified, together with the e-recording component, makes us confident that the risk of document rejection is minimal. Is this remote online notarization service available for international signings? Yes, provided that the signer has a United States social security number, which is a prerequisite for current KBA technology. In the case of foreign nationals or anyone who does not have a U.S. social security number, remote online notarization is not currently available.

37 Ready to get started? Head to notarize.com/westcor to sign up!

38 For additional questions, Please contact us! Powered by Notarize, Inc. Some material in this presentation was provided by Notarize, Inc. and is used with their permission. Revised 2/26/18