1. Notary Challenges: Out of State, Out of Country, & Online
Sean Holland
Regional Underwriting Counsel

2. Overview Notarizing Documents Policy Liability
Alaska Law – Basic Principles
Other States
Federal
Consular
Military
Foreign
Remote Online Notarization

3. Why does proper notarization matter?
Policy Coverage Covered Risk #2 – 2006 ALTA Owner’s and Loan policies: 2. Any defect in or lien or encumbrance on the Title. This Covered Risk includes but is not limited to insurance against loss from (a) A defect in the Title caused by (i) forgery, incompetency, incapacity, or impersonation; (iii) a document affecting Title not properly executed, acknowledged, [or] notarized[.]

4. Why does proper notarization matter?
Policy Coverage Covered Risk #9 – 2006 ALTA Loan policy: 9. The invalidity or unenforceability of the lien of the Insured Mortgage upon the Title. This Covered Risk includes but is not limited to insurance against loss from any of the following impairing the lien of the Insured Mortgage (a) forgery, incompetency, incapacity, or impersonation; (c) the Insured Mortgage not being properly executed, acknowledged, [or] notarized[.]

5. Why does proper notarization matter?
Policy Coverage
Covered Risk #6 – 2013 Homeowner’s policy:
6. Your Title is defective. Some of these defects are:
. . .
c. A document upon which Your Title is based is invalid because it was not properly signed [or] acknowledged[.]

6. Basic Principles – Overview
Statutes
Acknowledgment
Certification
Acknowledgment required for conveyances

7. Basic Principles – Statutes #1
Title 44 – State Government
Chapter 50 – Notaries Public
Regulation of notaries
Licensing
Seals
Bonds
Etc.

8. Basic Principles – Statutes #2
Title 9 – Code of Civil Procedure
Chapter 63 – Oath, Acknowledgment, and other proof
Article 1: Oaths, Certifications, Notarizations and Verifications
Title 34 – Property
Chapter 15 – Conveyances
Article 2: Acknowledgment and Proof

9. Basic Principles – Acknowledgment
AS The words “acknowledged before me” mean that (1) the person acknowledging (A) appeared before the person taking the acknowledgment; (B) acknowledged that the person executed the instrument; (i) a natural person, acknowledged that the person executed the instrument for the purposes stated in it;

10. Basic Principles – Acknowledgment
AS (continued)
(C) in the case of
(i) a natural person, acknowledged that the person executed the instrument for the purposes stated in it;
. . .
(2) the person taking the acknowledgment either knew or had satisfactory evidence that the person acknowledging is the person named in the instrument or certificate.

11. Basic Principles – Acknowledgment
Elements
Personal appearance
Execution/signature acknowledged
For purpose of instrument
Signer is known or presented satisfactory evidence

12. Basic Principles – Certification
The person taking the acknowledgment shall certify that:
 the person acknowledging appeared before the person taking the acknowledgment and acknowledged that the person executed the instrument;  and
the person acknowledging was known to the person taking the acknowledgment or the person taking the acknowledgment had satisfactory evidence that the person acknowledging was the person described in and who executed the instrument.

13. Basic Principles – Certification
In other words, the notary certifies:
Personal appearance
Acknowledgment of execution (signing)
Identification
Known to notary OR
Satisfactory evidence

14. Basic Principles – Conveyances in Alaska
(a) A conveyance executed in the state of land or an interest in land in the state shall be acknowledged before a person authorized to take acknowledgments in AS [.]
or proved in accordance with AS or  . . .

15. Basic Principles – Conveyances elsewhere in the United States
If a conveyance is executed in a state, territory, or district of the United States, the conveyance may be executed according to the laws of that state, territory, or district, and the execution of the conveyance may be acknowledged under AS

16. Acknowledgments and Notaries: Early American Practice
Acknowledgments & Deed Recording Acts
Plymouth Code of 1636
“…that all sales exchanges giftes morgages leases or other Conveyances of howses & landes the sale to be acknowledged before the Governor or any one of the Assistants & committed to publick Record and the
fees to be payd."
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17. Notary History - #1 First Person Appointed a Notary in America
Thomas Fugill
New Haven Colony
1637

18. Notary History - #2
First American Notary Removed from Office for Misconduct
Thomas Fugill
New Haven Colony
1645

19. Basic Principles – Conveyances in a Foreign Country
AS If a conveyance is executed in a foreign country it may be executed according to the laws of that country and the execution of it acknowledged under AS

20. Outside Alaska AS
Notarial acts may be performed outside the state for use in the state with the same effect as if performed by a notary public of the state by
(1) a notary public authorized to perform notarial acts in the place in which the act is performed;
(2) a justice, judge, magistrate, clerk, or deputy clerk of a court of record in the place in which the notarial act is performed;

21. Outside Alaska AS 09.63.050 (continued)
(3) an officer of the foreign service of the United States, a consular agent, or a person authorized by regulation of the United States Department of State to perform notarial acts in the place in which the act is performed;

22. Outside Alaska AS 09.63.050 (continued)
(4) a commissioned officer in active service with the armed forces of the United States or a person authorized by regulation of the armed forces to perform notarial acts if the notarial act is performed for a merchant seaman of the United States, a member of the armed forces of the United States, a person serving with or accompanying the armed forces of the United States, or their dependents;  or
(5) a person authorized to perform notarial acts in the place in which the act is performed.

23. Outside Alaska AS 09.63.050 Notaries of other states
Judicial officials of other states
US consular officials
Commissioned officers in the military
Outside U.S. – persons authorized to notarize documents under local law

24. Outside Alaska – Other states
How do you know if someone is a licensed notary public in another state?
You can take their word (or stamp) for it, or you can verify.

25. Outside Alaska – Other states
Little consistency in who regulates notaries;
California – Secretary of State
Florida – Department of State, Division of Corporations
New York – Department of State, Division of Licensing Services
Oregon – Secretary of State
Washington – Department of Licensing

26. Outside Alaska – Other states
Just Google: verify [state] notary license Example:

27. Outside Alaska – Judicial officers
“justice, judge, magistrate, clerk, or deputy clerk of a court of record in the place in which the notarial act is performed”
Why would you want to?
No central registration as with notaries
What qualifies as a court of record in the state in question?
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28. Outside Alaska – Overseas
Consular officers
At American embassies or consulates
Best option for getting documents notarized overseas from standpoint of security
No requirement that signers be U.S. citizens or residents
May not be workable in terms of timing
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29. Consular Signings – the challenge
Your transaction is all set to close, you have documents ready to sign, and then you find out . . .
. . . the buyers are off travelling around England.
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30. Consular Signings – the challenge
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31. Consular signings – the challenge
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32. Military signings Who can do it?
commissioned officer in active service with the armed forces of the United States
person authorized by regulation of the armed forces to perform notarial acts
Whose signatures can be notarized?
merchant seaman of the United States
member of the armed forces of the United States
person serving with or accompanying the armed forces of the United States
their dependents

33. Outside U.S. – foreign law
“a person authorized to perform notarial acts in the place in which the act is performed” Preliminary question: Will the lender involved in the transaction accept a document notarized outside the United States under authority of foreign law?

34. Outside U.S. – foreign law
Verifying whether you can rely upon notarization by a a person located in a foreign country is a two step process.
Figuring out who can notarize documents in that country
Confirming that the notary proffered is a legitimate notary
Options:
Sleuth it out on your own (Wikipedia, Google, etc.)
Rely upon accepted verification - apostille

35. Outside U.S. – foreign law
How comfortable are you with being responsible to verify a specific notary in a particular country?

36. Outside U.S. – foreign law #1
Don’t limit your search to official sources. Google the notary’s name. “Jose Luis Reyes Vazquez”

37. Outside U.S. – foreign law #1

38. Outside U.S. – foreign law #2
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39. Outside U.S. – foreign law #2
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40. Outside U.S. – Apostille A
What the heck is an apostille?
Or, as Wikipedia says:
Not to be confused with Apostle (messenger, esp. Christian); or an apostil, meaning a marginal note or gloss.

41. Outside U.S. – Apostille B
The apostille itself is a stamp or printed form consisting of 10 numbered standard fields. On the top is the text APOSTILLE, under which the text Convention de La Haye du 5 octobre 1961 (French for Hague Convention of 5 October 1961) is placed. This title must be written in French for the Apostille to be valid (article 4 of the Convention). In the numbered fields the following information is added (may be in official language of the authority which issues it or in a second language): From Wikipedia – Apostille Convention

42. Outside U.S. – Apostille C
1.Country ... [e.g. Hong Kong, China]
This public document
2.has been signed by [e.g. Henry Cho]
3.acting in the capacity of [e.g. Notary Public]
4.bears the seal/stamp of [e.g. High Court of Hong Kong]
Certified
5.at [e.g. Hong Kong]
6.the ... [e.g. 16 April 2014]
7.by ... [e.g. the governor of the special administrative district of Hong Kong, China]
8.No ... [e.g ]
9.Seal/stamp ... {of the authority giving the apostille}
10.Signature

43. Outside U.S. – Apostille D
Norway Certifying Authority: Governor of County of Hordaland Fylkesmannen Hordaland

44. Outside U.S. – Apostille E
HCCH – Hague Conference on Private International Law

45. Outside U.S. – Apostille F
Some countries where available:
Some countries where not available:
Australia
Canada
European Union – all countries, even the United Kingdom
China (except Hong Kong & Macao)
South Korea
Japan
Philippines
Mexico

46. Remote Online Notarization
Historical Model Precondition – eClosing capability Legal Framework National Trends Competing Models RON’s Future in Alaska

47. Historical Model Paper conveyance documents
Physically signed by grantors
Personally appearing before notary
Originals manually delivered to recording official for recording
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48. What are the elements of eClosing?
Electronic Documents Electronic Signatures Electronic Notarization Electronic Recording
An eClosing involves using some combination of electronic documents, electronic signatures, electronic notarization, and electronic recording.
An electronic document is a “native digital” document, as opposed to a scanned-in image of a paper document.
An electronic signature is a sound, symbol, or process applied by the signer to an electronic document in place of a wet-ink signature. eSignatures can take many forms, but the three most common versions are holographic (aka hand-drawn with a mouse, finger, or stylus), cursive typeface, and standard typeface.
An electronic notarization is the process of applying the notary’s electronic signature and notarial stamp or seal to an electronic document.
And lastly, electronic recording is the process of recording the electronic document in the county records in its original digital form without breaking the document’s tamper seal. This is different than the form of electronic recording that exists in many jurisdictions today which simply involves uploading a scanned-in image of a paper document.
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49. What are the elements of eClosing?
Electronic Documents
A “native digital” document. NOT a scanned-in image of a paper document.
Electronic Signatures
A sound, symbol, or process applied by the signer to an electronic document in place of a wet-ink signature. Most common versions are holographic (aka hand-drawn), cursive typeface, and standard typeface.
An eClosing involves using some combination of electronic documents, electronic signatures, electronic notarization, and electronic recording.
An electronic document is a “native digital” document, as opposed to a scanned-in image of a paper document.
An electronic signature is a sound, symbol, or process applied by the signer to an electronic document in place of a wet-ink signature. eSignatures can take many forms, but the three most common versions are holographic (aka hand-drawn with a mouse, finger, or stylus), cursive typeface, and standard typeface.
An electronic notarization is the process of applying the notary’s electronic signature and notarial stamp or seal to an electronic document.
And lastly, electronic recording is the process of recording the electronic document in the county records in its original digital form without breaking the document’s tamper seal. This is different than the form of electronic recording that exists in many jurisdictions today which simply involves uploading a scanned-in image of a paper document.
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50. What are the elements of eClosing?
Electronic Notarization
The process of applying the notary’s electronic signature and notarial stamp/seal to an electronic document.
Electronic Recording
The process of recording the electronic document in the count records in digital form.
An eClosing involves using some combination of electronic documents, electronic signatures, electronic notarization, and electronic recording.
An electronic document is a “native digital” document, as opposed to a scanned-in image of a paper document.
An electronic signature is a sound, symbol, or process applied by the signer to an electronic document in place of a wet-ink signature. eSignatures can take many forms, but the three most common versions are holographic (aka hand-drawn with a mouse, finger, or stylus), cursive typeface, and standard typeface.
An electronic notarization is the process of applying the notary’s electronic signature and notarial stamp or seal to an electronic document.
And lastly, electronic recording is the process of recording the electronic document in the county records in its original digital form without breaking the document’s tamper seal. This is different than the form of electronic recording that exists in many jurisdictions today which simply involves uploading a scanned-in image of a paper document.
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51. Types of eClosing? Three basic types along a continuum
Each method incorporates varying amounts of four elements
Hybrid
Only “procedural” documents are electronic
Paper deed/mortgage are wet-signed
Traditional identity verification by notary
In-Person
All documents are electronic
Documents are e-signed in personal presence of notary on laptop or tablet
Traditional identity verification by notary
Remote Online
All documents are electronic
Documents are e-signed in a remote online session
Identity verification by notary accomplished through new, technology- assisted methods
Broadly speaking, the eClosing continuum includes three basic types – hybrid, in-person, and remote online. These methods incorporate varying amounts of the eClosing elements discussed on the last slide.
“Hybrid” (“procedural” documents only closing) – At the low-end of the spectrum is the Hybrid or procedural documents only eClosing. This “entry-level” eClosing only involves electronic documents that do not need to be notarized or recorded, such as loan disclosures and settlement statements. The remainder of the closing takes place in a traditional manner.
In-person – The middle-tier approach to eClosing involves electronically recording electronic documents with electronic signatures and electronic notarizations. The closing takes place in-person utilizing a shared computer or tablet.
Remote Online – The final type, what some might call a “true” eClosing, involves electronic everything like the in-person approach. Unlike the in-person approach, however, a Remote Online eClosing takes place…wait for it…online! The signer and the notary need not be in the same room, or even in the same state!
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52. What is necessary to eClose?
FOLLOW THE ROADMAP
To complete a “true” online, remote eClosing, we must have legality, capability, and willingness to use and accept each of the following:
Electronic Documents
Electronic Signatures
Electronic Notarization
Electronic Recording
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53. Legality, Capability, and Willingness
Yes. In other words, we must answer three questions:
Legality – Is the use of electronic documents, signatures, notarizations (in-person and remote), and recording legal?
Capability – Is the recording official capable of accepting electronic documents with electronic signatures and notarizations for electronic recording?
Willingness – Is the recording official willing to accept electronic documents with electronic signatures and notarizations for electronic recording?
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54. As to Willingness . . .
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55. As to Willingness . . .
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56. Major Laws Addressing eNotary
1999 – UETA (“transactions”; other exclusions)
2000 – Fed. ESIGN (foreign/interstate commerce)
2005 – URPERA (eRecordings)
2010 – RULONA (eNotary)
2017 – MBA-ALTA Model Act (remote notary)
2018 – RULONA Amendments (remote notary)
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57. Legality of eNotarization
eNotarization is recognized in most states and in most circumstances:
ESIGN (federal); UETA (47 states); URPERA (31 states)
BUT legal recognition ≠ authorization for state’s notaries
AND eNotarization ≠ remote online notarization
Electronic: in-person electronic notarization
Remote Online: notarization conducted over the internet (this is necessary for remote online eClosing)
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58. eNotarization States
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59. Legality of Remote Online Notarization
Explicitly authorized in 9 states:
Virginia (2011) – Broad approach
Montana (2015) – Restrictive approach
Texas and Nevada (passed 2017)
Indiana, Tennessee, Minnesota,
Vermont*, Michigan (passed 2018)
Explicitly rejected in some states: IA, UT, WV
Exploratory: CA, CO, DC, FL, KY, LA, MD, MO, OH, OK, PA, SD…
MBA-ALTA Model Legislation (2017)
ULC proposed RULONA (2018)
ULC proposes new provisions to RULONA in July 2018:
The Revised Uniform Law on Notarial Acts (RULONA) is designed to modernize and clarify the law governing notaries public, their responsibilities and duties, and to provide a stable infrastructure for the performance of notarial acts with respect to electronic records. The 2018 Amendment to RULONA authorizes notaries public to perform notarial acts in the state in which they are commissioned for remotely located individuals using audio-visual communication technology regardless of where the individual may be located. This amendment is not limited to foreign located individuals; it extends the authority to any remotely located individuals. This amendment was prepared in response to a rapidly emerging trend among the states to authorize the performance of notarial acts by means of audio-visual technology.
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60. RON States as of July 2018
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61. 2018 RULONA Status

62. Montana
Starting October 1, 2015 – Remote notarization authorized via real-time, two-way audio-video communication – web cam
Identification: signer personally known to notary, or identified by credible witness
Documentary evidence to identify signer is NOT OK
Location of notary - Montana
Signer is legal resident of Montana (except proxy marriage)
Transaction type (only four authorized)
Real property located in Montana
Because of location limitation, not likely to encounter

63. Virginia Since 2011 Electronic notarization vs. Remote notarization
Permits Virginia notaries to perform notarial acts via live-feed videoconference
No requirement that signer be in Virginia
No requirement that notary be in Virginia
No requirement that seal disclose remote notarization process used
Seal indicates electronic process, but not clue whether remote procedures used

64. Virginia
Code of Virginia § Jurisdiction; powers outside the Commonwealth
. . .
B. Any notary commissioned pursuant to this title may likewise perform notarial acts outside the Commonwealth, where such notarial acts are performed in accordance with this chapter.
D. An electronic notarial act performed in accordance with this chapter shall be deemed to have been performed within the Commonwealth and is governed by Virginia law.

65. Notarial Act “Shall be Deemed” to Have Been Performed in Virginia?

66. Texas Enacted 2017, effective July 1, 2018
Notary physically present in Texas
Identity established by both credential analysis and identity proofing
Audio/visual record covering both establishing identity and acknowledgment
Notary seal indicates that remote notary procedure used

67. Texas Features form basis for Model Bill Mortgage Bankers Association
American Land Title Association

68. 2018 RULONA Amendment
Revised Uniform Law on Notarial Acts Amendment adopted in October 2018: “The 2018 Amendment to RULONA authorizes notaries public to perform notarial acts in the state in which they are commissioned for remotely located individuals using audio-visual communication technology regardless of where the individual may be located. . .This amendment was prepared in response to a rapidly emerging trend among the states to authorize the performance of notarial acts by means of audio-visual technology.”
Note:
In the state where commissioned
Location of signers irrelevant
“rapidly emerging trend”
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69. Key Principles from NASS Standards, MBA-ALTA Model & RULONA (2018)
Technology Neutrality as to means of eNotarization and authentication processes
Mandatory Disclosure in the notarial certificate
Multifactor Authentication to identify signer
Robust Audit Trail including audio-video recording
Notary Located in State at time of notarial act; overseas signer rule
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70. Multifactor Authentication in MBA-ALTA Model Legislation
Remote Presentation of ID credential
Credential Analysis of ID credential
Identity Proofing of individual
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71. Multifactor Authentication in RULONA (2018)
“… at least two different types of Identity Proofing processes or services.”
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72. Title Concerns Associated with RON
Three primary concerns:
Intrastate validity
Interstate recognition
Fraud, undue influence, and capacity of signer
Associated risks:
Document may not give constructive notice
Document may not get evidentiary presumptions
Document may be set aside
Bankruptcy: Trustee “strong arms” mortgage
Foreclosure: Borrower may challenge mortgage
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73. Interstate Recognition
State notarial reciprocity statutes?
Nearly all states accept documents notarized by notaries “in” other states, but where did something happen when it happened online?
The idea of “personal appearance” via a “remote appearance” overturns centuries of legal and commercial tradition
Full Faith and Credit clause of the US Constitution?
No known case holds that states must recognize notarial acts
Limits and “the land taboo”
Interstate Recognition of Notarizations (IRON) Act of 2010 (vetoed)
Dormant Commerce clause?
Prohibits economic protectionism by states, but permits legitimate local purposes that cannot be served by other means
Preserving integrity of public records seems like a legitimate local purpose
Otherwise innocuous state laws, but for the invention of new technology
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74. Interstate Recognition (cont.)
Why not just have express recognition for everything?
Internet does not recognize state borders
Enormous economic incentive for tech companies to “disintermediate and consolidate” nationwide notary business into one centralized location
States likely to compete to be host of that centralized business – “the Delaware of notaries”
Significant portion of tech companies’ cost of doing business is authentication requirements
Reducing authentication requirements leads to increased fraud risk
Race to the Bottom
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75. Alaska – what is needed
Statutory authorization for remote notarization, electronic notarization, and electronic signatures
Multi-factor identification: credential analysis and identity proofing
Audio/visual recording
Notary physically present in Washington
Notary seal indicates use of remote procedures

76. Alaska – way ahead Alaska Land Title Association draft bill
Incorporating MBA-ALTA Model (similar to 2018 RULONA Amendment, but more comprehensive)
Enacting URPERA – Uniform Real Property Electronic Recording Act

77. RON Trend
Currently 10 states have enacted IN, MI, MN, MT, NV, OH, TN, TX, VA and VT 27 states likely to see bills in 2019 or 2020 AK, AL, AZ, CA, CO, FL, GA, HI, IA, ID, IL, KS, KY, LA, MO, MS, ND, NE, NJ, OK, OR, PA, SC, SD, UT, WA and WI

78. What you can do
HB 1570 – would have added local city option for recording fee surcharge
TAN alert

79. Questions? Sean Holland Regional Underwriting Counsel
First American Title Insurance Company
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