Mark Wills explains why banks and title companies hire independent notary signing agents instead of handling mortgage signings themselves. The video covers the legal requirements and practical reasons these third-party notaries exist in the lending industry.
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I'm always asked Mark, how come banks, escrow or title companies do not simply do their own loan signings in house and save the borrower the $150 loan signing fee? Or more simply, why do notary signing agents even exist? First and foremost, signing agents are notary publics. And by law a notary public cannot not notarize a document in which financial benefit there has to be what I call a separation of church and state. Seeing that the bank will be making thousands of dollars in interest on a mortgage, I think it is safe to say they have financial interest in a mortgage being signed. It is for this reason banks cannot notarize and sign their own loan documents. They need a neutral third party, which is why they rely on escrow or title offices to find the notary signing agent. So the natural next question is, how come escrow and title offices don't employ their own notary signing agents to save the borrower's $150 signing fee? Or better yet, why wouldn't they hire a $15 an hour in office notary, charge the borrower with $150 signing fee and keep the difference as a markup or profit? And the answer is that they need to keep themselves at arm's length from fraudulent notary activity. Lets say an escrow office or title office had an employee notarize a deed of trust fraudulently because they were under pressure to close the loan. As an example, let's say that the person who signed the deed of trust was not the person who appeared in front of the notary public. This fraudulent act by the notary could lead to damages for the borrower, the bank, the seller or the buyer. Then all parties that were a victim by the notary's fraudulent act can sue the escrow or title company. Specifically, if found guilty, the title or escrow company could potentially be out thousands or even millions of dollars in damages. The way that they prevent this scenario is by hiring a third party independent notary. So in this exact same scenario, if the fraudulent notary was a contracted third party independent signing agent, the escrow or title company are not held liable. They are at arm's length from the notary signing agent. This is why escrow and title companies will never have an in house signing agent. And while our industry will always be around, they do not want to be held liable by a fraudulent notary that might be influenced to get an escrow transaction closed. So now you understand why banks, title and escrow companies hire third party notary loan signing agents. But they just can't hire any notary public who has an active notary commission. They need to hire a notary public who has knowledge of the mortgage industry, a notary public who knows where a borrower needs to sign, date and initial on all the loan documents. Now, some of you may be wondering why can't banks or escrow offices send out documents electronically to be signed with E signatures, which in theory could eliminate a fraudulent notary and act as a neutral third party. And there are actually a few reasons why E signings don't occur and probably will never. First, it's the Patriot Act. It requires a verification of identity that is only possible in person. Secondly, as it stands today, you cannot notarize documents digitally. There needs to be a human that identifies the person in front of them and then stamps the notarial acknowledgments. Even if notarizations did move to digital, the county recorder's office in every state in America would then have to accept a digital mortgage or digital copy of the Deed of Trust and accept it as an original. But deeds of trusts or mortgages are recordable documents and because of this they will likely never go digital. They require a hard copy to be stamped and recorded. And last, and most importantly, the borrower still needs someone to walk them through the myriad of forms and documents and so they're not confused as what they're signing and where they need to sign at the most. If lenders went to E signings, it would have to be a mixture of electronic signatures and printing out loan docs like the Deed of Trust or Mortgage for instance. This would still require live signatures and ultimately still require a live notary signing agent. So now you understand what a notary signing agent is and why a notary signing agent exists. And most importantly, now you know why our industry will continue to stand the test of time. As long as there are homes, as long as there are people getting mortgages on these homes, there will be need for a notary public loan signing agent. If you are interested in learning an in demand skill that won't go away that pays $75 to $200 per hour long appointment. Take my Loan Signing system course and certification. You'll get immediate and unlimited access to the training videos and my courses come with a money back guarantee. Click the link below to learn how to become a notary public loan signing agent. I'm Mark, I teach the Loan signing system and I look forward to helping you make money as a notary loan signing agent.
