REAL ESTATE CLOSINGS
Are real estate closings still happening in Texas?
Texas REALTORS® has been in contact with the Texas Land Title Association, which reports that title agents and companies are remaining open. Title companies have been instituting social-distancing measures and work-at-home measures for staff who can do so. Many title companies are trying to take advantage of remote online notary services; however, TLTA reports some challenge associated with lenders accepting remote online notary services for loan documents.
What is online notarization?
Online notarization permits a signer of documents requiring notarization to “personally appear” before an online notary via real-time, two-way video and audio communication rather than appearing in-person. The documents may be signed by the signer electronically or with “wet” signatures. Wet signatures are those signed by hand in ink. Subchapter C of Section 406 of the Texas Government Code provides that an online notary public shall verify the identity of a person creating an electronic signature at the time that the signature is taken by using two-way video and audio conference technology through:
(i) the online notary’s personal knowledge or through remote presentation by the person signing of a government-issued form of identification such as a passport or driver’s license, that contains the signature and photograph of that person,
(ii) a process or service approved by the secretary of state through which a third person affirms the validity of a government-issued form of identification, or
(iii) a process or service approved by the secretary of state through which a third person affirms the identity of an individual through review of personal information from public and proprietary data sources.
What is electronic notarization?
Electronic notarization is the use of an electronic signature and stamp of a notary rather than the traditional “wet” signature and stamp or seal.
What is acceptable two-way video and audio communication?
The Texas Government Code requires the online notary to take reasonable steps to ensure that the two-way video and audio communication being utilized is secure from unauthorized interception. The Texas Land Title Association has issued a warning stating that online notarization cannot be done via Facetime, Skype or Zoom, specifically. However, there are several companies that offer services to provide remote end-to-end notarization that does not allow for unauthorized interception. They include DocVerify, Notarize, NotaryCam, Pavaso, Safedocs and SIGNiX. Still, some lenders and title insurance underwriters may require use of a company that they have pre-approved for such a service. Note that Fannie Mae and Freddie Mac have their own list of approved vendors). REALTORS® are encouraged to verify requirements with lenders and title insurance underwriters.
What is an acceptable electronic signature and/or notarization?
Chapter 15 of the Texas Property Code provides that if Texas law requires that a document be signed in order to be recorded in the county records, the requirement is satisfied by an electronic signature. If the law requires that a document or signature associated with a document be notarized, acknowledged, verified, witnessed or made under oath, such requirement is satisfied if the electronic signature of the person authorized to perform that act and all other information required to be include is attached to or logically associated with the document or signature. Still, some lenders still require “wet” (real ink) signatures rather than electronic signatures. Fannie Mae issued a lender letter on March 23, 2020, that stated that Fannie Mae would accept electronic signatures on most loan documents except promissory notes unless such note is an electronic note sold in accordance with Fannie Mae’s Selling Guide. However, as things are changing daily, REALTORS® are encouraged to check with your lender and title insurance underwriter to confirm what they will accept.
Does the signer have to be physically located in Texas to have a signature notarized by a Texas online notary?
No. The Texas Government Code authorizes an online notary to take acknowledgments or proofs of written instruments regardless of whether the signer is physically located within the State of Texas.
Will other states recognize online notarization of documents?
It is not clear whether online notarization will be recognized by states that have not adopted remote online notarization or even by some states that have. Currently, 23 states have passed remote online notarization laws, 13 of which having fully implemented procedures that allow remote/online notaries to perform online notarizations. Certain states have adopted emergency measures that allow for remote online notarization in light of the coronavirus pandemic. The American Land Title Association and other industry partners and trade associations are supporting an effort to pass the Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2020 (SECURE Notarization Act). The legislation would permit immediate nationwide use of remote online notarization and certainty of the interstate recognition of remote online notarization.
Will my client’s use of electronic signatures or remote online notarization of their documents be recognized by their lender and/or title insurance underwriter in another state?
If you want to know specifically whether the signatures on the documents your client is signing or having notarized will be recognized in another state, speak with an attorney in that state. Additionally, REALTORS® are strongly encouraged to check in with lenders and title underwriters to ensure they will recognize the remote online notarization and electronic signatures.
Are there any provisions for government-issued ID that expires during the governor’s disaster declaration due to the coronavirus pandemic?
Also, in situations where a government-issued form of identification is used to verify identity, emergency procedures were put in place by the Texas Department of Public Safety, which extended the expiration dates of identification cards, driver’s licenses, commercial driver’s licenses, commercial license permits, or election identification certificates set to expire on March 13, 2020, or after for the entire duration of the governor’s declaration of state of disaster plus 60 days after such state of disaster is lifted.