The Notary Signing Agent "Loan Closing" -

Process, Preparation & Pitfalls

Perhaps it would be best to cover the events, from the desire for a mortgage, or re-finance, to
funding; chronologically, as the timeline is the only common aspect. The borrower completes a
Loan Application (more on the importance of this later), and numerous other documents. These
are usually signed at the location of the Lending Institution (bank), in the presence of the Loan
Officer (LO). Once approved by the bank, the processing becomes very interesting indeed.

The LO's bank will lend money to the borrower based on the Mortgage as collateral for the loan.
Banks do not like to take any risk whatsoever. What if the borrower does not have "clear title" to
the property? To protect the bank, the bank requires the borrower to pay for "Title Insurance"
issued by a "Title Co.". So the next step is for the LO to contact a Title Co. to arrange for the
insurance. Note that from this point forward the Title Co. "calls the shots"; as the Title Co. is the
only party taking "risk". If they do not issue the necessary insurance, there is no loan.

Eventually, after the loan has been approved, and the Title Insurance has been approved -
usually about 2-3 weeks after the Loan Application; the stage is set for the actual processing of
the paperwork. Various documents must be notarized, and it is the role of the Notary Public to
check the ID's of affiants on notarized documents; and there will be many! The mortgage is
always notarized; and frequently two copies are processed; in case the messenger sent to
record the mortgage at the local county clerk's office loses it on the way. That actually does
happen.

At this point the documents, typically from 80 to 125 pages are computer generated and ready
for the Notary Signing Agent to bring to the borrower. But first a qualified NSA must be selected.
As it is the Title Co. who is most interested in proper completion of the paperwork, they take on
a leadership role to get the documents signed by the borrowers. But, not wanting to actually
deal with, or have to select notaries, they often use a Signing Service (SS) to actually choose
the notary.

At this point the Signing Agent gets a call asking if they are available to be at so and so location
at such and such a time. If not, they call the next agent on their list. If it works for the agent's
schedule, they negotiate a fee. That fee is based on the requirements to process the Loan
Package. Variables include the number of pages, the distance to the borrower, time of day
(extra for me to be there at 7AM on Sunday), etc. Also discussed are how and when the
package is to be sent to the Signing Agent - overnight, usually via FedEx or E-mail. The latter
has usually has an additional fee. Once an agreement is reached, the Signing Service, on
behalf of the Title Company sends a "work order" to the Signing Agent.
Now the ball is in the Notary Signing Agent's court. Everyone who did anything prior to this point
is depending on the NSA to get the borrower's signatures and initials completely, and to do the
requisite notarizations accurately. The NSA must also make sure any "non borrowing spouse" is
present to sign docs as required by state law. There is much for the NSA to do. First the
borrower must be called to confirm the "work order" as to contact information and address and
to verify the scheduled time of meeting; and that all will bring proper ID to the table. Next, the
NSA must receive and print two sets of the loan documents (borrower copy and bank copy). A
good NSA will explain what will take place at the "signing" and remind the borrower to have their
photo ID (and a copy to submit) ready for the meeting. A really good NSA will ask the borrower
what name is on their ID, as the property "vesting" name sometimes differs from the name on
the borrower's ID. If so, the NSA contacts the Signing Service to get the documents corrected,
or the borrower finds appropriate ID matching the documents.

Finally, usually with barely enough time to print and drive; the E-doc is received and two sets
printed. If there is adequate time after printing, some NSA's like to pre-notarize the documents
so they are able to devote their full attention to the signing process. Map in hand, GPS
programmed, hoping the traffic is light; the NSA departs for the scheduled meeting with the
borrower. A good NSA always uses a GPS to find the borrower's location and does not get lost
in the process. After dark jobs usually require a powerful flashlight to see house numbers in
residential neighborhoods.

The NSA shows their ID and requests the ID of the borrower(s). Then, the page by page
completion of the documents begins. A single flaw, omission, or unreadable date (usually by the
borrower) will often result in a complete re-draw of everything. The experienced NSA knows to
"swap a page" from the borrower's copy to allow a redo of a page with an error. The process
usually takes about an hour, depending on the size of the Loan Package, how much the
borrower wishes to read, and the amount of information to be entered. Often the borrower has
questions and "attempts" to contact the LO. If, as is sometimes the case; the borrower receives
the package directly, days prior to the Notaries arrival; they are expected to read it and ask their
LO any questions. But, some borrowers want to ask questions of the Notary Signing Agent.

Title Co.'s and Signing Services tell the NSA to "explain the documents, but do not give legal
advice". It's a really fine line between the two. Most NSA's choose the side of caution and only
define terms and assist the borrower to find documents with desired information (the interest
rate, the APR, the pre-payment penalty). At this time, the computer generated replacement for
the original hand written Loan Application is signed. This is one of the most important
documents. It is on this document that the borrower has made claims about their credit
worthiness, salary, etc. Any false statement on this document would allow the Lending
Institution to demand the loan be paid in full immediately! Also, many of the numbers on this
document will be wrong - because time has passed since it was originally signed - some debts
shown will be higher or lower.

Having been on several thousand signings the environmental aspects of the borrower's
premises are worthy of comment. They range from a well lit kitchen table in an air-conditioned
room - to, and I am not making this up - a fruit fly infested room where the borrower pursues his
hobby of "naturally" raising Iguanas! There are many other pitfalls. In New York the Notary is
mandated to only use black ink; but Pinellas County, Florida will not record a mortgage unless
all signatures are in blue ink! I have been asked several times (verbally, of course), to
"backdate" my notarization date, as the papers have expired (borrower out of town, rate lock
expired, etc.). In New York that is called Forgery, a class D Felony - worthy of seven years in
prison!

Finally the documents are signed and notarized, the borrower given the Notary Oath - and it's
off to FedEx to ship the documents to the Title Company. Well, not exactly. First some
documents must be faxed, (lots of them if it will fund same day); and an airbill very carefully
prepared. Phone calls must be made to report success or failure "at the table", and an invoice
prepared. At last all is ready and the papers are handed off to FedEx.

Although the borrower thinks the "closing" has been completed - it actually has not even started.
If I was a true "closing agent" - I would have a checkbook and be able to write the check on the
spot. It used to be done that way many years ago. Now, the papers are received by the Title
Company and they review them for errors. If their included documents, often called "junk docs"
(because they tend to be 4th generation Xerox copies), are completed and notarized correctly
they approve issuance of the Title Insurance and pass the paperwork to the Lending Institution.
At that time the papers are again reviewed, this time the review is for the papers that originated
from the bank. The bank, with the knowledge of Title Insurance approval; will at last do the real
"Closing" - which allows for issuance of the check that the borrower has been seeking.

Thus, the Notary Signing Agent is an integral part of the process. Important documents are
notarized to assure the validity of the signatures. No system is perfect. A notary can be fooled
with a good forgery. So can a State Trooper, with a phony Driver's License. But, the bulk of the
impersonation potential is filtered at the source by the NSA's diligence in pursuing valid ID and
using their stamp and embosser on documents. Borrowers like to sign papers in the comfort of
their own home/office - at their convenience. The licensed and professional notary, though a
part of the system that caused the recent mortgage "melt down" disaster; was never a causative
factor. If not for the diligence of professional notaries pursuing the NSA craft, things would have
been much, much worse.

http://kenneth-a-edelstein.com