WHY you wait for your Pay?
Regulars on 123Notary.com will recall my thoughts about “do the work now” – get paid Much later (or not at all). In this blog entry I will explore the reason for, and the history of this nearly unique payment morass.
In virtually every other transaction, cash, order by phone or internet; it’s pay first – get later. I tried at Walmart to leave with just a T-shirt; asking the cashier to “invoice me” – it didn’t work. Everyone wants their money first, they deliver the goods second. However, notaries are asked to process edocs, and enclose an invoice; or submit a month end form – for usually much later payment. Why? Well I’m going to tell you exactly why.
First, it’s necessary for http://kenneth-a-edelstein.com to define some terminology. While you often see the term “closer” on your confirmation page or in the docs; most of us are more properly known as “signing agents”. I know, some don’t like the use of “agent”, but just for now please allow me to use that term for notaries who are skilled at processing “loan packages”.
The true “closer” takes risk! They sign off on the completeness of the closing and facilitate the transfer of the property. Risk? – yup, and lots of it. If an item is missed, eg: past due water bill, and the closer missed it – the funds to pay the bill come from the closer’s pocket. I took a course at a local college to learn “the ropes” about becoming a true Closer. The open ended liability scared the poo out of me. There is no one who offers “oops, I missed that” insurance for true “loan closers”. The professor at the school strongly cautioned prospective closers to apprentice for a year or two with a professional prior to striking out on their own.
What has this got to do with notaries waiting for their pay? Bear with me. It’s necessary for me to lay the foundation for what will follow shortly.
Back to the true “loan closer”. They made A LOT of money. Often approaching two thousand on a single closing. Most of the revenue was processing “pick ups” – whereby the closer takes care of some of the “loose ends” involved in the transfer of the property. We all know it is a good idea to be named on the HUD, as disbursements MUST be made promptly when the closing is complete – per Federal law. That’s good for the notary.
Backing up a bit – it’s the Closer who arranges for those checks to be issued to notaries, and, of course many others. With the “purse strings” in hand, the closer certainly made sure that their own considerable fees where promptly disbursed. Thus the closer earned a substantial fee, and was paid upon completion of the Closing.
Seeing the big bucks, title insurance companies brought the formerly “remote” closing function “in house”. However, the notary (signing agent) function still had to be done “remotely” as required by law (unless the borrower went to the title Co.).
However, the “remote notary function” seems to have inherited the “paid after the close” – but without the big bucks that the true Closer earned. As mentioned the Closer took risks, if there was no closing – there was no pay for the closer. Does that sound familiar? “Sorry notary, we earned nothing – you earn nothing, or a pittance. BUT, you never make the big bucks.
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