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June 26, 2018

Which rules are laws, Lender practices, or best practices?

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Notary Rules or Industry Rules?

It is confusing with all the standards in the Notary business. When 123notary teaches Notary practices, we are not teaching laws, but solid practices. Many Notaries argue with us about our practices because they are not required by law. That is the whole point — we are not teaching law because we are not authorized to, and because we don’t know it. We do know solid notary practices, and teach it as you can get into trouble for not knowing your basics. However, notaries have many misconceptions about the rules of the industry. So, let me clarify.

1. You can always over sign — industry practice (not a law)
Is this a Notary law, industry practice, or what? This statement means that you can sign a document with a name that is longer than the name typed in the signature line. However, that does not make it legal to notarize that longer name unless you can prove the name with an ID. Pleasing the Lender is one aspect of being a Notary. Obeying the law is a much more important one. If you displease the Lender you get fired. If you get in trouble with the law you can end up in jail. Pick your poison.

2. The name on the ID has to match
Please keep in mind that there are four names we have to keep track of:
(a) The name on the ID
(b) The name typed on the signature section of the document.
(c) The name signed on the document
(d) The name on the acknowledgment.

In theory these names could all be different variations, but it is cleaner if they are identical. The critical points are that:

(e) The name on the Acknowledgment must be identical or matching but shorter than the name on the signature line of the document. If the signature on the document says John W Smith, you can put John Smith or John W Smith in the Acknowledgment to please the law, but the shorter name might not please the client.
(f) The name on the Acknowledgment must be provable based on the name on the ID, but does not have to be an exact match. The ID could say John W Smith and you can put John Smith in the Acknowledgment if you like.
(g) The name signed on the document can be identical or matching but longer than the name typed on the document to please most Lenders, but legally notarizing the longer signature or shorter signature is dependent on proving all of the components of their name with an ID.

3. The Lender is the boss of the Notary Public (true for signings, but not for the actual notary work)
The Lender is your boss as to the general assignment, and what happens with loan documents. They are NOT your boss about Notary issues and you should not ask them for Notary advice ever as they might have you do something illegal out of ignorance or greed. You ask your state’s notary division if you have a Notary question and perhaps the NNA hotline and that’s it. The Notary can ask the Lender their preference in how something is notarized if there is more than one legal way to do it, but you can not ask a Lender how to do your job. You are the appointed Notary, not them. If they want to do it their way, they should come over with their stamp and do it their way which hopefully is legal — but, it is their commission at stake if it is not legal. Don’t risk your commission depending on the Lender or Title for Notary advice.

4. The Notary is the boss of the Lender?
The Notary is a state appointed official who represents their state, although the state is not the entity that pays them. If there is a discussion between the Lender and the Notary as to how a Notary act is done, the Notary dictates how it should be done. If there are multiple legal ways to do something such as fixing a mistake by crossing out and initialing vs. attaching a loose certificate — then, the Notary can ask for the Lender’s preference, but not for advice. However, there are liability issues with doing cross outs and initialing. It looks like tampering and you don’t want to end up in court. So, once again, it is the Notary’s discretion as to how problems are solved when there are multiple methods to solve. You can ask the Lender what they like or you can dictate to the Lender what you are going to do. But, the Notary is the boss of Notary work. If they don’t like it, they can find another Notary. It is best if you explain the reasons why you want to do something a particular way. If your reason sounds prudent, there is a chance you might get some respect for your decision. Most Notaries don’t think issues out carefully and do not have well thought out reasons for anything they do. Read our course more and become reasonable! Your commission might depend on it.

5. Send me a loose certificate or jurat in the mail (illegal)
Acknowledgment or Jurat certificates must be stapled to the documents they are associated with. If there is one floating around, you cannot create another one until you destroy the original yourself. Some states do not allow creating new certificates for botched notarizations and require you to do the notarization all over again. Consult your notary handbook on this issue, especially in California where there are many new rules created in the last few years that I have heard about but not actually read to my satisfaction.

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You might also like:

The ID says John Smith
http://blog.123notary.com/?p=19953

What is the cleanest way to rectify an error on a certificate?
http://blog.123notary.com/?p=20018

13 ways you might get sued as a Notary
http://blog.123notary.com/?p=19614

5 books every notary should own (and read)
http://blog.123notary.com/?p=3668

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