COVID-19 has provided unique issues related to real estate finance. One of the challenges during a period of lockdown orders is the ability to get a notary to physically come to the location of the borrower to sign loan documents.
In response, the mortgage banking industry and its lobbyists on the state and federal level have been pushing for remote online notarization.
The State of Illinois, through its Governor J.B. Pritzker, has promulgated several executive orders related to the rapid spread of the virus across the state. Of particular note is Executive Order 2020-14, which is a measure to promote the safety and protection of Illinois residents in response to the COVID-19 pandemic. This executive order ensures that residents can continue to conduct essential personal and business decisions and finalize necessary official documentation via remote notarization. This notarization may be completed on a remote basis by a notary public, and fulfills the following requirements:
- Contains the notary’s signature, seal, title and commission and expiration date;
- Contains other required information regarding the date and location of the remote online notarization;
- Conforms to the usual requirements for in-person Illinois notarizations; and
- Indicates that the person making the underlying acknowledgment, oath or affirmation did so remotely
Executive Order 2020-14 issues specific guidance to signatories and notaries public who have the capacity to perform their duties utilizing real-time electronic technologies featuring high-quality audio-visual communication. The temporary authority extended to Illinois notaries to conduct remote, virtual notarizations will expire automatically upon the rescinding of the Gubernatorial Disaster Proclamation of March 9th, 2020.
Specifically, Executive Order 2020-124 provides the following instruction:
- Permits two-way audio-video communications to fulfill the requirement that an individual must “appear” before a Notary Public;
- Permits any act of witnessing mandated by Illinois state statute to be completed on a remote basis via two-way audio-video communication if the communication meets specific requirements; and,
- Permits all legal paperwork to be signed in counterparts by witnesses and signatory absent an express prohibition, and lays out specific guidelines when the signing mandates a Notary Public.
In addition to the preceding stipulations, the Executive Order requires that when a Notary Public, signatory, or witness performs a remote notarization or execution of a document using two-way audio-video technology, they must be located physically within Illinois when doing so. Additionally, the Order requires that:
- The two-way audio-video communication technology must allow for direct, real-time interaction between the signatory and witness via sight/sound capabilities and recorded and archived by the signatory for at least three years;
- The signatory has to expressly state what document is being signed and every signed page being witnessed must be shown to the witness, who must sign a transmitted copy of the document and then transmit the signed copy back to the signatory within 24 hours of receiving it.
It should also be noted that neither Executive Order 2020-14 nor the Illinois Notary Public Act does not require remote notarization, and a resident may still obtain a notarization from a place of business which is still open; for example, a bank.
Illinois provides a good framework for other states to adopt, particularly on an emergency basis. We believe that more states should adopt remote notarization not only during this crisis but also as an alternative solution. The mortgage industry still has a long way to go to modernize and catch up to the ways of the 21st century. Reliance on a flawed recording system and manual notaries are areas which needed overhaul before this crisis, and these pain points have only been magnified during it.