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71 RON vendor can demonstrate the use of their technology, as well as compliance with minimum requirements. » Identity proofing through multifactor authentication including capabilities such as digital identity verification utilizing forensic technology that exceeds the capabilities of the human eye and knowledge-based authentication (also known as "KBA") that relies on multiple components of the consumer identity (previous addresses, loan transactions, and other identifiable information) to verify identity. » E-Notary requirements for those holding state seal who wish to conduct RON, along with electronic record requirements. » Recording requirements up to life-of-loan, of the notarial ceremony with cutting- edge information security preservation requirements. » Document security requirements including the tamper-sealing of electronic documents so that they cannot be altered by a third- party without the documents clearly indicating the interference. » A standard for "papering-out" the transaction which permits the printing of documents if necessary for ease of Recorder's Office use, and Document Custodian management. Even though the state laws vary, a RON provider that is MISMO certified and retrofitted for servicing likely follows the most conservative, consistent standard, making the variables largely blocking and tackling. But in evaluating providers, servicers should certainly consider these factors. FEDERAL INVESTORS/INSURERS AFFIRMATIVELY SUPPORT THE USE OF RON Nearly every federal investor and insurer including the FHA, the VA, the FHFA, Fannie Mae, and Freddie Mac have authorized the use of RON for loan modification transactions. 9 THE FEDERAL HOUSING FINANCIAL AGENCY (FHFA)/FANNIE MAE (FNMA)/ FREDDIE MAC (FHLMC) e FHFA/FNMA/FHLMC has broad, published acceptance of RON for both origination and servicing, including loss mitigation. 10 Notably, both entities accept delivery and servicing of loans with electronic documents, including security instruments or mortgage loan modification agreements that have been electronically notarized. THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD)/THE FEDERAL HOUSING ADMINISTRATION HUD has applauded the efforts of states and other agencies who have adopted and implemented RON during the COVID-19 crisis and urges the Conference of State Bank Supervisors to "secure additional flexibilities, wherever possible, to facilitate the full functioning of the real estate mortgage market within the confines of the President's directive to avoid public interactions wherever possible." 11 Further, the FHA does not regulate the use or format of the notarization of documents. Instead, the mortgagee must ensure that the mortgage and note comply with all applicable state and local requirements for creating a recordable and enforceable mortgage, and an enforceable note, including the requirements for notarization of these documents, stating that, generally, that state law governs what requirements are applicable for proper notarization of a document. 12 THE VETERAN'S ADMINISTRATION e VA reminds lenders and servicers to be cognizant of GNMA Guidelines, but explicitly authorizes for VA guaranty the use of RON provided that the "notarization is valid and effective under applicable law and regulations." 13, 14 GINNIE MAE GNMA announced its Digital Collateral Initiative (All Participants Memorandum 20-10) in July of 2020, which implements the policy, technology, and operational capabilities necessary to accept electronic promissory notes and other digitized loan files as collateral for GNMA securities (Digital Collateral). However, while the GNMA Digital Collateral Guide prohibits digital modification of e-notes/e- mortgage transactions, it is silent on whether digital signatures can be leveraged on paper documents. A clarification or expansion of even this narrow use case (e.g., permitting digital signatures on paper documents) would assist in industry adoption of RON. Of course, the hurdles to make the shift to digital are not without challenges. However, in the words of Tony Robbins, "Change happens when the pain of staying the same is greater than the pain of change." Does it hurt enough yet for the default industry? Time will tell. With a background in high-risk regulatory solution management, operations, innovation, and human-first strategies, Courtney ompson has recently launched Consigliera. Consigliera is a consultancy focused on revolutionizing mortgage servicing by building bridges between financial institutions and the fintech community to deliver meaningful, connected, efficient solutions. Since 2014, ompson has been the SVP in charge of Flagstar Bank's best-in-class default mortgage operations team, delivering industry-leading transparency into, and the strongest control environment around, the default mortgage servicing process. Passionate about servicing transformation she led the bank's partnerships with the fintech community through its mortgage-specific fintech accelerator program. 9 See infra Federally Backed Enterprise Broad Adoption of RON with standards similar to GNMA. 10 See FNMA Selling Guide A2-4.1-03, Electronic Records, Signatures, and Transactions. See also Freddie Mac Bulletin 2020-8. 11 See HUD's Position with regard to expanded use of digital notarization. 12 See SFH COVID-19 QA. 13 See VA Circular 26-20-10.

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