Texas Online Notary Laws are Shaping the Future for Digital Mortgage Closings
On August 19, 2018, Texas became the third state to offer remote online notary services, behind Virginia (2011) and Montana (2015) making it one of only five states to currently have a fully implemented remote notarization procedure. The newly promulgated rules to become an online notary public can be found under Chapter 87 of the Texas Administrative Code.
To become an Online Notary Public, an eligible individual must apply electronically to the Texas Secretary of State and obtain a digital certificate issued by a third-party provider that uses Public Key Infrastructure (PKI) technology and is X.509 compliant. Upon approval of the application and issuance of the digital certificate, the notary may conduct remote electronic notarization through an online platform to any individual instantaneously. This online platform utilizes a two-way video and audio conference technology that can be saved to the notary’s electronic record book.
While the Texas Secretary of State does not provide a list of approved third party vendors, websites such as DocVerify, Notarize, and SecuredSigning have built credential analysis and identity proofing standards into their website programs.. However, if the e-notary, prefers not to use a third party vendor, these security requirements may be accomplished through a laptop or computer webcam using a trusted browser, such as Google Chrome Use of 3G or 4G mobile data devices, such as hotspots or smartphone tethering, is not recommended because of the risk that the recording could be altered.
The two security procedures required after a principal presents a government-issued I.D. are identity proofing and credential analysis. Identity Verification (or Knowledge Based Authentication) is a process where the principal enters information about himself and is then tare presented with a set of questions that only he should be able to answer. This process is similar to retrieval of a forgotten password. Credential Analysis is accomplished through a system that authenticates the validity of the principal’s ID. Once those two security measures are accomplished, the notary can then electronically notarize the uploaded document and save the video recording to his/her notary book. NOTE: The Texas Administrative Code prohibits a notary from recording any identification number that was assigned by a governmental agency or biometric data such as a fingerprint.
The benefit to remote online notarization is that the principal may be located anywhere, so long as the notary is physically located within the boundaries of Texas at the time of notarization. Some have voiced a concern that proper identification may become compromised by unauthorized interception. Due to this concern, safety training is provided by the Secretary of State to educate online notaries about circumstances in which it may be appropriate to ask the principal to show his/her physical surroundings.
Texas’ remote notary laws are changing the future of mortgage closings from requiring physical presence at an office to virtual event. In fact, Fannie Mae and Freddie Mac have already endorsed webcam notarization. This new technology will allow consumers to close on homes faster, wherever they may be, causing traditional closings to fade out of popularity especially within the millennial generation. Today’s homebuyers don’t need extenuating circumstances to prefer the convenience, security, and time savings of virtual closings.
Author/Contact: Kim Lewinski
Attorney, Default Services/Creditors Rights Practice Group
T: (713) 328-1926 | F: (713) 759-6834 | E: firstname.lastname@example.org
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 National Notary Association, Remote Notarization: What You Need to Know; (Notary Bulletin June 2018 updated July 2019), https://www.nationalnotary.org/notary-bulletin/blog/2018/06/remote-notarization-what-you-need-to-know.
 Texas Secretary of State, Getting Stated as an Online Notary, https://www.sos.state.tx.us/statdoc/gettingstarted.shtml
 Texas Secretary of State, Identify Proofing and Credential Analysis, https://www.sos.state.tx.us/statdoc/identityproofing.shtml
 DocVerify, Electronic Notary Texas, https://www.docverify.com/Products/E-Notaries/Electronic-Notary-and- Remote-Notary-Platform/Electronic-Notary-Texas;
Notarize, Frequently Asked Questions; https://www.notarize.com/faq;
Secured Signing, Secured Signing Certify – Electronic Notary, https://www.securedsigning.com/products/certify.
 Texas Administrative Code §87.70.
 Texas Gov’t Code § 406.110.
 Texas Administrative Code §87.50.
 43 Tex. Reg 5355: President of American Association of Notaries expressed concern over the identify verification process.
 Lauren Silverman, Notaries Are Starting To Put Down The Stamp And Pick Up A Webcam, NPR All Things Considered (June 12, 2017).
 See, eNotarization section at www.fanniemae.com/singlefamily/emortgage and Fannie Mae and Freddie Mac, GSE Efforts to Improve eMortgage Adoption: A Follow-up to the 2016 GSE Survey Findings Report, Uniform Mortgage Data Program, Nov. 2017, p. 3.