Not a great deal of regulatory activity in the month of June, as spring gave way to summer and many state houses sent their lawmakers on break. Still, there were a number of important changes that our compliance experts caught, and we summarize them for you below.
The history of notaries public (aka notaries) is interesting and varied, including origins that can be traced back to the ancient Roman law, or to the 13th and 14 century English common law. In Roman times, notaries were public officials that were often traced back to Senate or to the court where their function was to record public proceedings. In England, early notaries were appointed by a representative of the Pope and were often members of the clergy. In the United States today, notaries are usually commissioned on a state-by-state basis and are generally utilized for validating signatures, administering oaths, and authenticating the execution of certain documents such as deeds.
In May, Senators Mark Warner (D-VA) and Kevin Cramer (R-ND) reintroduced federal legislation designed to expand the use of Remote Online Notarization (RON) on a nationwide basis. The Securing and Enabling Commerce Using Remote and Electronic Notarization (SECURE) Act of 2020 was originally introduced in March of 2020. The original version of the bill stalled out and never made it past an initial introduction. There is hope that the reintroduction of this bill will gain more traction on Capitol Hill due to experience with difficulties entering into many transactions requiring notarization during the COVID-19 pandemic.
A number of state lawmakers were quite busy in May. In addition, the federal government provided some compliance guidance, with both the CFPB and USDA publishing information during the month. The details are below.
We are a little over a third of the way through 2021 and massive shifts within the mortgage industry have occurred, whether due to the unexpected (COVID-19) or to the long-anticipated (URLA). While First American Docutech cannot address the unexpected for the remainder of this year (as much as we wish), we are keeping a watchful eye on changes expected to occur within the near future. The top three that we have identified are:
With state legislatures in session and a new administration beginning to work on their regulatory priorities, we saw many changes for loan document requirements in April. Several of the changes are regulators modifying rules to fit the current COVID-19 scenarios with states and officials working to maintain a streamlined and cohesive mortgage experience.
eNotes in the News
The use of eNotes continues to expand across the mortgage industry. In May, MERS® reported that 44,170 eNotes were registered on the MERS eRegistry (as of the end of April 2021). There have now been over 1,155,052 eNotes registered since the inception of the MERS® eRegistry. MERS is also reporting an 83% year-over-year increase in the number of companies transacting on the MERS® eRegistry, (as of April 2021). The use of eNotes had already started to increase before the pandemic, but public health measures initiated as a response to COVID-19 surely accelerated the use of eNotes. This acceleration will likely continue as the mortgage market shifts away from refinances and pivots towards more purchase transactions as rates increase and the demand for housing remains strong.
Recently, First American Docutech produced an informative eClosing masterclass webinar hosted by HousingWire. The event focused on helping better clarify the eClosing process and how lenders can get started to enable the optimization of the closing process as the demand for mortgage loans shifts emphasis from refinance to home purchase.
The digitization of financial transactions continues to accelerate, just as cash is giving way to electronic payments, traditional paper mortgage processes are being replaced by digital mortgage processes.
