Virtual data rooms offer security for remote closings
Facial recognition and other tech helps protect buyer and seller information as remote notarization gains acceptance.
- As more transactions go remote, participants have a greater need for security when sharing sensitive documents online.
- Multiple companies offer virtual data rooms to facilitate secure signings.
- If remote notarizations are allowed nationwide with the passage of the SECURE Act, the use of virtual rooms may increase.
A growing number of real estate agents and their clients use online tools to view and sign legal documents virtually, but there has been little to no guarantee that general-purpose conferencing platforms can keep sensitive information secure.
Most "solutions available don't have the authentication and verification capabilities to confirm if a person joining a virtual meeting via a web link is the person they claim to be," said Nicole Bosgraaf, spokeswoman for OneSpan, which provides online authentication and anti-fraud services for digital transactions and agreements.
OneSpan recently introduced web-enabled video conferencing with a focus on cybersecurity. The company encrypts data, strengthens firewalls and serves as a gatekeeper at virtual meetings to ensure the confidentiality of legal documents.
The company joins a rapidly growing market for secure online e-signings and virtual data rooms. iDeals, ShareVault and SecureDocs are among the many companies offering similar products.
ID verification using facial recognition
Using OneSpan's platform, participants who need to share, view and sign legal documents can meet in a "virtual room" after their identity is verified. Authentication may be done in a number of ways, depending on the meeting or transaction.
In real estate closings, facial recognition technology is often used to confirm a person's identity. People who are buying or selling a home first take a photo of their government-issued ID and upload it to the OneSpan platform, then upload a selfie. Algorithms use biometric data to compare the two photos and verify the person's identity.
OneSpan also creates an audit trail of activities on its platform. Nothing is left to memory, note-taking or second guesses. "Our audit trail captures all signing events that took place in [the OneSpan] Virtual Room, including signing privileges passed between participants, geolocation details, authentication, signing order and more," Bosgraaf said.
Remote signings in remote Alaska
Scott Myers, associate broker at RE/MAX Dynamic Properties in Eagle River, Alaska, said that the added security of secure virtual rooms for e-signings is something he plans to explore.
"We do a ton of business online with clients who are outside the state or even the country wanting residential property in Alaska," Myers said. "As we move forward in technology, that is something we could all use in my office."
In 2021, Alaska enacted rules that enable remote notarization of deeds at closings. But adoption has been slow. "I don't know of anyone who is doing it," Myers said.
With Alaska's vast expanse and extreme weather, prospective buyers would appreciate the convenience of closings that are entirely remote, he added.
"It depends on whether the lender will allow for it," said Robyn Gregorieff, owner of Alaska Mobile Notary Services, who travels from Interior Alaska to Valdez providing notary services. "I handled one remote closing, and there were 180 pages of paperwork. It's a laborious process."
RON for all
Many real estate companies and associations, including the National Association of Realtors, support the move toward fully remote transactions as a way to streamline the closing process, particularly for long-distance buyers and sellers.
NAR and others lobbied for the enactment of the Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act, which was passed by the U.S. House of Representatives in July. The act would allow for remote online notarization (RON) nationwide and set minimum standards for its use.
More than 40 states permit remote notarizations, according to the National Notary Association. California is among the few holdouts, but even in states where RON is permitted — like Alaska — rates of adoption may vary.
Myers said he looks forward to being able to complete an entire real estate transaction online. "There are no online notary services for us now. We certainly need them," he said. "Online business is a lifeline here."