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 Knowledge Base Index :   General Notary Public Information

E-signing and e-notarization

Since this article is for notaries, let's consider an e-signing to be a session where a client meets with a notary and electronically signs at least one document (and perhaps some paper documents too). An e-notarization is the electronic notarization of a document. Sometimes the only documents that are e-signed don't need notarization, so e-signing and e-notarization don't always go together.

Ways to e-sign

There are many ways to e-sign a document. The federal ESIGN law (which controls some, but not all American e-signings) says that:
The term "electronic signature" means an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.

This means that clicking a box that says "click here to agree" or typing one's name on the keyboard could be a valid electronic signature. It is a common misconception that a signature is not a real signature unless it is reasonably secure. Some people think a signature isn't real if it is in pencil, if it is hand-printed in block letters instead of cursive, or if it is just typed in a computer file with no security measures. But a signature is not invalid just because it was made in an insecure way; it is just harder for a person who wants to rely on the signature to prove that it is genuine.

Public key cryptography

Two ways of e-signing deserve special attention. The first is the public key cryptographic signature. This deserves an article of its own, but briefly, the person signing obtains in advance a digital certificate and stores that digital certificate on his computer. During the signing, the document being signed and the digital certificate are combined using sophisticated mathematics so that the signed document can't be changed without becoming invalid. Also, no matter how carefully the signed document is examined, there is nothing in there that will help to forge a signature on a different document.

Mortgage notes

The second special e-signing is signing a transferable record. An example of this that is becoming more common is an electronic note for a mortgage loan. Traditionally, a note was paper, and if a mortgage was sold to a different lender, the original paper note would be handed over to the buying lender. If the lender had to foreclose, the lender would have to produce the original note in court; a copy wouldn't do.

Of course, electronic files can be copied perfectly, and there is no way to tell the difference between an original and a copy. A lender who needs to foreclose can't be asked to produce the "original" e-note; that doesn't mean anything. Instead, the federal ESIGN law requires that e-notes be controlled in a system that reliably tracks who is in control of the e-note at any given moment. One system that accomplishes this is the MERS eRegistry.

In most states, notes are not notarized. In any case, a note e-signing without an Internet connection probably won't be possible, because the signing process needs to be under the umbrella of the system that keeps track of who is in control of the e-note. Most likely, the borrower will have to log on to the website of the lender, trust company, or the like, to e-sign the note.

Why e-signings might not include e-notarization

Usually notarized documents are shown to, or filed with, a government agency. For example, deeds are usually filed with county clerks, and travel permission letters are shown to immigration officers at borders. Most agencies are not ready to accept electronic documents, so even if the private parties in a transaction are ready for electronic documents, the notarized documents are often still paper.

Ways to e-Notarize

As far as the federal ESIGN law is concerned, any of the many methods of signing that the client can use may also be used by the notary, even just typing the notary's name in a word processing document. However, states have responded to this in a variety of ways. Some have done nothing. Some have passed the Uniform Electronic Transactions Act or the Uniform Real Property Electronic Recording Act, or both. Some states do not allow electronic notarization. Some do, but require that the notary obtain a special e-notary commission, or register their intent to e-notarize with the appropriate official.

In those states that allow e-notarization, only one or a few of the possible e-signing methods might be allowed. As an example, Pennsylvania requires a separate application, and that approved notaries use a public key certificate from the National Notary Association (although their web site indicates they began a transition to a multi-vendor system in January, 2008).

Some documents not eligible

The federal ESIGN law does not enable e-signatures for wills, adoption, divorce, and some other documents. However, states could authorize e-signing of documents that are not covered by the federal law.

Article Details
Date Created June 22, 2009
Submitted by: Gerry Ashton <ashtongj@comcast.net>
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