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-document 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 somedocuments 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
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The signing from hell
The Signing from hell….
I have been a notary signing agent for many years now and for the most part I have enjoyed it tremendously. I love the freedom and independence that it affords me and I enjoy meeting wonderful new people from all walks of life. As with most jobs there are good and bad days. This is the tale of one of those bad days. Probably the worst day as a signing agent ever-for me that is.
The story begins
Get ready for a hell of a story. Here we go. I got a call late on a Friday afternoon from one of my title company schedulers (Fidelity National Title) for a job on the following day, a Saturday. I gladly accepted. I received the confirmation and then proceeded to call the borrower to verify time and place. Saturday came and I made my way over to the borrower’s home. When I drove up to the borrowers home the first thing I noticed was the house was VERY run down, and I couldn’t help wondering to myself if the bank knew what they were doing in granting a loan for this property but who am I to judge.
Going up the stairs…
So I parked and then proceeded up the stairs to the house and could see and feel that the whole house was crooked, like on slant. It was obvious It had once been a single family house that somebody who obviously didn’t have a contractors license had chopped it up and made some what I call make shift apartments out of it. And you could actually see the termites crawling on various pieces of exposed wood. But again it is not my place to judge. So I went to what looked like the only real front door (as there were several) and knocked. I heard what I thought was an animal with paws approaching the door.
The Signer and his long clicking toe nails!
But to my surprise it was a young man. But not just an ordinary man but a man with the longest toe nails I have every seen (that is what I heard coming to the door the clicking of his toe nails hitting the floor as he walked). He was also the filthiest person that I have seen as well who living in a house and not on the streets. He was wearing dirty boxers and a dirty torn tee shirt. Then to top it off there was a smell that I cannot to this day describe. While I stood motionless in disbelief and shock, I heard a sweet woman’s voice saying ‘is that her, is that the lady…tell her to come on up…please come on up’…and I cannot tell you why but I went into the door way and accened up a dark stairway and I heard what I assumed was the young man that opened the door who now was behind me start turning about 4-5 locks one by one and as they clicked and locked behind me and I became terrified..truthfully I thought I was going to see my maker that day but I kept on climbing the stairs and the further I ascended up the stairs the stench got worse.
The air was so thick… I could have cut it with a knife…
I could hardly breath. There was absolutely no ventilation. The air was so thick I could have cut it with a knife. And I thought to myself I must have lost my mind. To this day I still cant explain why I didnt just turn around when the front door first opened and just leave. When I reached the the top of the stairs it was very dark and as my eyes started to adjust there was more horror. Dishes and trash pilled everywhere and there were two extremely dirty mattresses one on the floor which the young man who had let me in proceeded to ly down on and cover himself up with a dirty blanket and the other which was sitting up on a mattress frame was the lady who I presumed had called out to m. She was sitting on the edge of the mattress with two swollen legs that resembled tree trunks with clearly to me looked like flesh eating disease. There was an abundance of open sores and I’ll just leave it at that. She then says to me that they had just painted the floor and I was to sit in that area…I said excuse me….and she then pointed to a 10 foot corner that had a coach that clearly had been freshly painted…I thought to myself I must be in the twlight zone or on one of those candid camera tv shows….
The signing begins..
I sat down and asked for the documents (they had been overnighted to the borrower; it was one of those WAMU deals, and I guess it it obvious now why they went out of business…lol) and the signers ID. She looked puzzled but asked the young man to get up and look for the requested items….he reluctantly got up and looked for a few minutes but to me it didnt seem that he was really looking or knew what he was looking for. He was wandering around aimlessly and then told the lady that he could not find them. She accepted this and all I’ll say is that I was so grateful that the ID and and loan docs couldn’t be found…I immediately got up let them know I had to go for I had another appointment and if the missing items came up please call so we could re-schedule another appointment (yes, I lied) and then with the young man in front leading me out I proceedded to the stairway and headed down the steps.
No ID? No problem, let’s reschedule.. time to go!!!!
Thankfully he had the unlocked those locks and he was opening the door when I reached the foot of the steps. I thanked him and bolted through the door gasping for air as I went. I really didnt realize how much I was shaken up until I reached my car. I fumbled for the key, opened the drivers door, sat behind the drivers seat and began trembling. I could still smell that dreadful smell. Dear god, I had brought it with me. Before I could compose myself, in a state is horror, I once again heard those clicks of those toe nails and looked up to see the young man at my passenger side car door excitingly letting me know that he had found the loan doc’sI could hear him saying “Oh Miss, Oh miss I got what you need” and me being the quick thinker I am, I asked him had he found the ID as well. He looking disappointed said oh no…and walked back to his house. All I could do was just sit there and try to regain my composure. Soon after however I felt sick to my stomach and I opened the door leaned my head down towards the street concrete and everything that had been in my stomach come up….After about 15 minutes I started the car up and went home. I opened my front door and stripped down and left it all outside. Clothes, briefcase and all. I took a long hot shower and washed the clothes I had been wearing. After this I immediately sat down and sent Fidelity a very long recap of all of these events and told them NOT to send a request that I go back…ever. When Monday came I got a an apology via email from Fidelity and that was the end of it. I never heard one thing about it ever again. Shortly after however, I did receive my full fee of 150.00. Of this I was thankful.
I was polite through the whole ordeal!
In closing, there is one thing I want to add. Although I was very uncomfortable with the whole situation. The borrower and who I presumed was her son, never new for one minute that I had issues with any of what I described here. I was cheerful, kind and professional throughout all of it.
Until next time…