Notary News

New updates to West Virginia Notary Laws Update on June 17th.

The bill focuses on remote online notarizations (RON) and remote ink notarial acts (RIN).

A federal judge in Washington DC struck down the national eviction moratorium across the country on Wednesday.

U.S. District Judge Dabney L. Fiedrich of the District of Columbia ruled that the CDC does not have the authority to create and enforce a law regarding evictions. In other words, it is outside of their purview.

A federal judge ruled Wednesday that the Centers for Disease Control and Prevention lacked the legal authority to impose a national eviction moratorium during the COVID-19 pandemic. The ruling could potentially impact millions of households that have fallen behind on rent.

Fast Company

Challenge Incoming

The Department of Justice has indicated that they plan to appeal the ruling. They have now appealed the ruling. The Biden administration has said that they are reviewing the ruling and considering their options in regard to the ruling.

The Justice Department has asked the judge to put a stay on the ruling while the appeals process plays out. No response has been given on whether or not the stay will be granted. The judge has now temporarily stayed the ruling.

The Biden administration has indicated it is attempting to pass a 50 billion dollar relief package for renters and landlords. During the moratorium it was declared that back rent would be owed when the moratorium was lifted, though no good process has been set forward, and industry analysts have indicated it will be very difficult to collect back rent for those who could not afford it, or used their stimulus funds for other expenditures.

State and Local Impact

The federal order will not preempt certain eviction moratoriums at the state and local levels.

But, expect more appeals to be filed in those locales based on this ruling. Though a complete list of local and state regulations regarding the eviction moratorium is outside our purview, one of the states whose moratorium will stand is New York.

The ruling will not affect New York’s laws because they are more stringent than the federal measure, said Sen. Brian Kavanagh, D-Manhattan, who sponsored the moratorium legislation in the Senate. “It doesn’t have any direct effect at all,” he said.

Democrat and Chronicle

The Argument for the Moratorium

Proponents of the eviction moratorium are varied.

Some say that any evictions will make the Covid crisis worse, making the virus easier to spread. They assert that is why the CDC has the authority to enforce the moratorium as it affects public health.

Others assert that during a time of crisis it is unethical to allow evictions. Many of them believe that a rental property is an investment, and that the landlords chose to take that risk.

The more fringe proponents believe that rent is unethical altogether.

The Argument Against the Moratorium

For those who support ending the moratorium, they say that while renters have been provided stimulus, landlords have not. And there have been no provisions enforcing renters to use any of the money from stimulus checks or the expanded unemployment to pay rent.

Some landlords have been hit harder than others. Most have been willing to work with renters to get through the pandemic by updating leases or allowing renters to pay what they can afford. Others have stated they have tenants that are abusing the eviction moratorium altogether, with no plan to pay rent, or use any of the stimulus funds to pay rent.

Regarding the investment argument, landlords have asserted that the moratorium goes beyond simply opening up their risk in investment. They say that if the units are empty, then that is the risk they take in the investment. But, since the renters are allowed to stay in the properties, the landlords are forced to pay additional losses that fall outside of what their investment should entail.

It should be noted that some areas and leases require the landlord to also pay utilities and other costs, and they should not be forced to do so, as many landlords find themselves in the same financial predicament of their renters. Their have been a number of court allowed evictions across the country for abuse of this. In one, tenants ran up $2,000 of utility costs in a single month to spite the landlord.

The Job Market and Unemployment

As the economy has rebounded, many employers are looking for workers. Local business owners we have spoken with say they have job openings they cannot get applicants for.

Others have indicated that the few applicants they have had, have no interest in the job. That they have basically asserted in job interviews they are only doing so to meet unemployment requirements.

While we’ll admit that some of this is anecdotal, the job problem is very real.

The coronavirus pandemic forced many businesses to close their doors and turn away customers and employees, but as many of those businesses and restaurants begin to reopen, they are looking for employees to fill available positions as they keep up with increased demand for their goods and services.

CBS 4, Miami

The Effects for Notaries

This was always going to boil over at some point.

For notaries, better or worse, this will result in a large amount of foreclosures across the country. After those foreclosures will come a lot of property sales, most likely much larger than the amount normally seen.

This can be seen as a financial positive for notaries.

This may be slightly tempered by the drastic increase in the price of properties during the crisis. Some economists have argued that Covid has created a bubble in the housing market. One that may lead to another crash in housing prices.

An earlier end to the moratorium, while still popping the bubble, may do so before it gets too large. Most of us remember in 2007 the bubble was too large and left many homeowners under water, compounding the crisis.

Whatever way you personally feel about this situation, it is something that will have a large effect on the notary industry.

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Mortgage rates are starting to rise as lenders try to stem new applications.

Lenders have been swamped with new applications as low interest rates have led to rising home prices and, more importantly, applications.

Why Slow Apps?

While low interest rates have kept the real estate engine moving during the COVID era, some lenders were already finding the low interest rates untenable.

A couple of large lenders had already capped applications based on loan size, while instead focusing on things like fulfilling PPP (Payroll Protection Program) loans. One large lender we know of stopped fulfilling home loans under two million dollars.

Other lenders stepped forward to fill the gap, but growing numbers of lenders are growing wary of the large number of loans at such low rates.

The Bustling Housing Market

As millions have lost work and thousands of businesses have failed, the housing market has helped to buoy the economy.

The massive drop in rates has led to large gains in home prices in most markets, while refinancing has opened the door for lower payments during a time when many need them.

But, long term forecasts are more uncertain. The last thing the industry wants to see is a market with declining prices as we move forward. And let’s face it, neither do buyers, especially after so many were left under water for so long after the real estate crash of 2007.

How Far Will Rates Rise?

Right now we are seeing rates rise between a quarter and a half a point. But, some analysts see this continuing as lenders try to make loans more profitable, hedging their bets from the low interest rates.

Refinance rates are a little more stable, but higher rates appear to be on the horizon. Business outlets like Fox Business are starting to advise those looking to refinance to do so sooner than later.

Has This Affected Notaries?

In some cases, yes. Between the busy market and some notaries sitting out signings due to the pestilence, there has been a notary squeeze for some.

Online signings have (very) slowly started to creep in, but quickly changing rules, no national standard, and work from home have all complicated the situation.

While work from home has been a blessing for many, large institutions are running into issues with training. In an industry where a single typo on a 40 page doc can wreck a transaction, training employees to exacting standards in all 50 states is onerous.

Especially when you are training tens of thousands of them.

If we’ve learned anything in the last year it is to expect the unexpected. Notary demand will remain strong, though.

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The hybrid closing is something a few notaries are starting to be affected by.

As the move to online closings takes baby steps, the hybrid closing is a new trend to take a look at.

Are they the future of the industry, or just a stop gap on the way. With the slower than projected growth of remote online notarizations (we’ll have more on that soon), hybrids are starting to emerge.

What is a Hybrid Closing?

A hybrid closing is one in which part of the closing is done remotely, while another part is performed in person.

The banks are looking towards them as a way to split the work done in the closing.

So here is how it works.

A closing package is composed of several files that need to be notarized. They can all be done in person, but they don’t have to.

For example, in attorney states, under the temporary rules in place, some closings are now being done with some docs remotely, while other documents that require an attorney are done in person.

New York state is the leader in this right now, but it is still in its infancy.

Will This Only Affect Certain States?

Truthfully, right now we are not sure. We only know that a few of the large lending institutions are giving it a try. Only the future holds how much of this will potentially affect the industry.

We do know that lenders put more weight behind certain documents than others. The law in many states does as well. So, those documents are being split under the hybrid closing model.

Since the laws right now are so disconnected across the country, and many are only temporary because of COVID, it is tough to tell where this will spread to.

Does That Mean Two Notaries for One Closing?

For some closings, yes.

And we think that the messiness of these closings will be one factor that decides the future of the hybrid closing model.

Are two notaries for one closing a good idea? A good part of us says it is not. One set of documents. Two notaries. A lot of room for error there.

What if you have an experienced and professional notary for one part of the transaction, and a not so good notary on the other end. It could potentially create a bit of chaos in a lot of ways.

However, that does not mean it will not happen.

If the rewards outweigh the risks, large lenders will follow.

Can the Same Notary do Both Parts of the Hybrid Closing?

There is no reason not.

As many of you know, we now offer online notaries. Some of you are already signed up with us for those services.

We all have to change with the times. And while online notarizations only represent a tiny fraction of our business right now, the fact is that they probably won’t several years from now.

Look, we all have to embrace and adapt to change. The notary industry, and every other thing in our life, is constantly changing. You either change with the times or get left in the dust.

Might it be our preference to find an online notary close to the physical part of the signing? We think so, but to be honest, it is too early to tell. We are looking at a very new and emerging topic here.

What Does This Mean for My Business?

In the short term, probably not much. But, we like to look ahead, and you should, too.

It is best to be out in front of the market. To be ready if and when the next trend comes down the pipeline. To be ready to jump on new trends before our competitors.

This is the best reason why performing a hybrid closing needs to be on your radar.

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Don’t we all want market rates for our work? The Massachusetts Supreme Court has agreed.

Though this mainly affects static signings, almost every state has laws regulating the amount that may be charged for a notarization. Laws that when the average notary looks at the prices, it gives them the willies.

Notary pricing laws had a proper place and purpose. They ensured that everyone had access to notarize documents at a price that was reasonably affordable. The premise being that the need to the public outweighed the need to the notary.

So, the notary was allowed to charge a fair price and the signer knew they weren’t getting price gouged. A win-win as we like to call it.

A win-win at the time.

Market Rates Change with the Times

But, times move on. And the rates a notary could charge did not.

The notary was required to eat any new costs. The notary was held captive by inflation. None of these costs could be passed on to the consumer and work as a static notary went from a decent career to just a job, if one was lucky, which most are not.

Over time all the profit was gone and other businesses started to offer services as a loss leader. So, the corner store may offer notary services, or maybe a bank or other business. They weren’t making money. They were just getting people in the door.

Heck, we know all about that. Sunshine offers static notary services in our office in Hudson, Florida. And while they are here, they get to find out all about our other wonderful notary services.

Market Rates in Massachusetts

A Massachusetts notary had enough.

Massachusetts law was codified in 1836! How much inflation do you think has happened since then? Under most documents, he was only allowed to charge $1.50. That’s the price of a candy bar today! (and not even the king size)

State law bars notaries for charging more than $1.25 per document, but that he and his wife were charged $10 a document, so he wants his money back

Universal Hub

Now, was the $1.25 for every document? Or even correct? The court said it was not. That this was a misunderstanding of the law. One that needs to be fixed.

The important part here is the court affirmed the right of the notary to charge market values.

Why Have a Lawyer When You Can Have a Historian?

The rest of the case revolved around changes in society since 1836. Arguments over language. It appears common English spoke in the United States has evolved since then.

Go figure, huh?

So, once the historians had their say and explained to everyone what the law may have meant when they wrote it in 1836, the notary prevailed, even if the court said it was a misinterpretation.

A very important misinterpretation that took historians to attempt to parse. Note to lawmakers. If it takes a historian to tell you what a law may or may not mean, maybe it is time to update or scratch that law altogether.

But, why don’t we instead focus on the important takeaway.

The Massachusetts Supreme Court ruled/affirmed that notaries may charge fair market prices.

New Notary Technology

So, why is this important to today’s mobile and online notaries? It does not affect the daily operations of your business.

Or does it?

Since mobile and online notaries offer services beyond notarization, prices charged are already at market price. Some might say that technology has helped us move on from 1836.

But, there are a couple of positive takeaways.

Mobile and online notaries are less likely to be subject to future draconian laws themselves. What if you were told you could only charge $25 for a mobile signing for the next 200 years?

Can anyone say conniption fit?

The other side is that it could make you more competitive in the market.

A Possible Market Rate Example

Why don’t we look at the corner store? They may now charge $20 for a document they used to charge, let’s say, $8 for.

You cannot compete with $8. You probably don’t even want to try, which is why you looked for more lucrative areas of the notary business to begin with.

But, at $20, you may be able to compete. It may give you access to a market you could not touch before. You offer convenience that cannot be matched, especially when you can charge competitive pricing.

And being more competitive in the market is never a bad thing.

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Your Nationwide Notary Signing Service

Increase your efficiency and bottom line with Sunshine’s Mobile Notary Services and Online Notary Services. Sunshine is always there when you need us.

GET STARTED

Or Call us at (727) 817-0000