Remote Transactions

Please keep in mind that the title underwriters, agents, and financial institutions you work with will need to be in agreement on the technology being used and related security compliance procedures.

Questions & Clarifications Regarding Illinois Executive Order 2020-14:

• Does the emergency authorization apply to only an Illinois commissioned notary and Illinois notarial acts? Yes. "Both the notary and the customer must be physically present in the State of Illinois at the time the remote notarization is performed" (see Guidance, Requirements Paragraph No. 2); ""Notary" means a person who is authorized to perform notarial acts such as taking an acknowledgment, administering an oath or affirmation, taking a verification upon oath or affirmation, and witnessing or attesting a signature as provided in 6-101 of the Illinois Notary Pubic Act." (see Guidance, Definitions) (additional note: no reference is made in EO 2020-14 or Guidance to the recognition of out of state electronic or remote notarizations consistent with paragraph 2 of Section 20 of the Illinois Conveyances Act, 765 ILCS 5)

• Can a County Recorder reject a document because it has been electronically or remotely notarized? No. "Any documents remotely notarized during the term of Executive Order 2020-14, shall be deemed valid and treated as if the document had been notarized via in-person transaction." (see Guidance, Requirements Paragraph No. 8)

• Can a County Recorder reject a certified paper copy of an electronically signed or notarized document because it is a copy? No. "A paper or tangible copy of an electronic document that a notary public has certified to be a true and correct copy satisfies requirements of law that the signatures and attestations contained in the document are original and authentic." (see Guidance, Requirements Paragraph No. 9)

• Can standards be set by a financial institution or underwriter beyond those set forth in Executive Order 2020-14 and related guidance? Yes. "Executive Order 2020-14 does not prohibit Illinois notaries from utilizing the electronic or remote notarization platforms available that meet industry standards and each of the requirements provided by the Governor’s Executive Order." (see Guidance, Requirements Paragraph No. 6)

• What remote online platforms can be used? Without making endorsements, please note that commonly approved vendors in Illinois include DocVerify, Nexsys, Notarize, NotaryCam, and Pavaso, while others being discussed for purposes of more immediately utilizing the remote notarization executive order have included Zoom Pro and Microsoft Teams live; at a minimum, Section 2(b) of EO 2020-14 and paragraph 3 of the Guidance Requirements confirm the need for audio-visual communication to be recorded; however, all three fundamental aspects of security immediately below should likely be considered when choosing a platform.

Based on initial feedback for those looking to implement this temporary authorization, a few fundamental aspects of security appear to dominate the conversations:

• How are audio-visual recordings created and stored on the platform you are seeking to utilize?

• What methods are being used to identify individuals and witnesses in the audio-visual recording?

• What tamper-evident assurances are being provided regarding signed documents?

A shared understanding of these fundamental security aspects may help title underwriters, agents, and financial institutions looking to implement remote online notarizations and closings pursuant to the Governor's and Secretary of State's temporary authorization. Also understanding standards set forth by the Mortgage Industry Standards Maintenance Organization (MISMO) will be important to the acceptance of remote closings and related loans being considered during this emergency period.

Another important aspect for any remote closings and related loans being considered during this emergency period is their acceptance by Fannie Mae and Freddie Mac. Fannie and Freddie have published eClosing vendor lists over the past few years and recognized remote online notarizations (see e.g. Fannie June 2019 guidance); however, on March 31, 2020, Fannie Mae and Freddie Mac issued updated guidance in response to activities during the emergency COVID-19 period, which included standards for the approval of remote online notarizations.

In summary of Fannie and Freddie's March 31st guidance update, Illinois authorized remote online notarizations will be recognized if they meet some additional standards not present in the Governor's Executive Order 2020-14 or Secretary of State's Guidance . Below are a highlight of these additional requirements, which tend to revolve around the topics of identity proofing, recordings/storage, and tamper-evidencing:

Freddie Bulletin 2020-08:*

Pursuant to Attachment C to Bulletin 2020-8, "...a remote Electronic notarization process is permitted in the following States [which includes Illinois], subject to the requirements in Bulletin 2020-8," which requires:

• • At least two-factor identity authentication, including using a government-issued photo ID that has a signature, credential analysis and identity-proofing;

  • Tamper-sealed notarized documents and system security sufficient to:(A) prevent interference with the authenticity, integrity and security of the notarial ceremony or corruption or loss of the recording of the same, and (B) protect the communication technology, electronic record and backup record from unauthorized use;

  • The remote online notary must keep a secure electronic journal of the notarial act, including evidence of identity of the principal (a video and audio conference can be the basis for satisfactory evidence of identification) and maintain a backup of the electronic record; and

  • Recording of the notarial ceremony with storage for the minimum period required by applicable laws or if no period is specified in the applicable law, for seven years

In addition, Mortgages closed using the Remote Online Notarization process must meet the following requirements: (click here and scroll to "Remote Online Notarization" regarding Section 1401.16)

On April 10th, Freddie further clarified its position regarding remote notarization:

Q6: [NEW 04.10.20] Does Freddie Mac permit loan closings in which the notary public a) witnesses the borrower wet-ink signing of loan documents remotely (via Zoom, Skype, etc.) and b) receives the borrower’s signed documents via FedEx/UPS/USPS to complete the notarization?

Freddie Mac does not restrict Sellers from using this process as long as the notary that is licensed in that state is comfortable notarizing documents signed through such process, consistent with applicable state law, and the title insurance company provides title insurance on such loans without any caveats/restrictions. If the process is only enabled pursuant to a temporary executive order of a state’s governor, the process would not be acceptable upon expiration of that Executive order.

Note: This process should not be confused with Remote Online Notarization, as Remote Online Notarization is electronic notarization of electronically signed documents using two-way secure audio/video live connection in compliance with applicable state laws and Freddie Mac minimum standards published in Guide Bulletin 2020-8.

Fannie Lender Letter 2020-03:*

"Lenders may sell loans with remotely notarized loan documents in the states listed in the table below, on the following terms and conditions [which includes Illinois]," including that "The system used for the remote notarization must meet the following minimum standards [mirroring Freddie Bulletin 2020-08 requirements regarding the system used for the remote notarization]"

Due to COVID-19, these guidance updates also allow the use of powers of attorney to execute loan and closing documents for loans with applications dates on or before May 17, 2020; click here for more information and links from the American Land Title Association.