The Des Moines fintech company LenderClose announced Thursday it has made what it believes is the first-ever remote online notarization used to close a mortgage loan in Iowa. 

Remote online notarization transactions were authorized last week as part of a COVID-19 emergency declaration by Gov. Kim Reynolds. The order, which suspended the requirement for a notary to be physically present for the signing of real estate loan documents, accelerated a new state law that was set to go into effect on July 1 permitting the use of e-notary services. 

Using the LenderClose platform, borrowers and lenders securely e-sign and notarize the entire closing transaction using a computer, smartphone or tablet. Lenders have the option to use their own online notary public or rely on a pool of online notaries public already in the LenderClose system. 

LenderClose is one of three software vendors currently approved by the Iowa secretary of state for notaries to use, along with DocVerify and Signix. 

The initial closing facilitated this week by LenderClose was made for a Collins Community Credit member. Other credit unions planning to use the LenderClose RON platform for mortgage closings include Community Choice Credit Union, Serve Credit Union and Financial Plus Credit Union. 

Several Iowa banks have been actively engaged in developing electronic mortgage closings, but had been held back by the inability to have documents notarized electronically, said Bob Hartwig, legal counsel and lobbyist for the Iowa Bankers Association. “I know that we will have several members working on getting it implemented here very quickly,” he said. 

Both the Iowa Bankers Association and the Iowa Credit Union League had lobbied for the legislation in 2019 to make e-notary services available in the state. 

The Iowa secretary of state’s office has approved 162 applications for individuals to become e-notaries as of Thursday, spokesman Kevin Hall said. The agency does not maintain any information regarding numbers of e-notary transactions that have been conducted, he said. 

In anticipation that the Iowa governor’s decision will spread to other states, LenderClose CEO Omar Jordan has opened the technology to credit unions and community banks outside Iowa. 

“Community lenders in any state where remote online notarization is legal or on its way to being approved should reach out immediately,” said Jordan, who last week became one of Iowa’s first approved remote e-notaries.