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Notary Bulletin

Certified Signing Specialist Code of Conduct: Guiding Principle 5

New-Standards-Questions.jpegEditor’s Note: This is the fifth in an ongoing series of commentaries analyzing the individual Guiding Principles of the Certified Signing Specialist™ Code of Conduct, released by the Signing Professionals Workgroup in October 2013.

Guiding Principle 5 of the Certified Signing Specialist Code of Conduct reads: “The Certified Signing Specialist will not perform an illegal, deceptive or harmful act in connection with a signing assignment and will report any suspicious activity to the closing agent handling the transaction.”

Mortgage fraud has been on the rise in recent years, and loan origination fraud is widely regarded as the most common type according to a March 2014 report by the Office of Inspector General of the U.S. Department of Justice. Loan origination fraud typically involves a borrower or industry insider who misstates, misrepresents or omits information on a mortgage application that causes a lender to fund, purchase or insure a mortgage loan. Other types of mortgage fraud include foreclosure rescue, loan modification and short sale scams.

The Code of Conduct prohibits a Certified Signing Specialist from engaging in acts of fraud, whether alone or in concert with others. In particular, the Code expressly prohibits a Certified Signing Specialist from performing the following fraudulent acts that could contribute to fraud:

  • Notarizing the signature of a signer who is not physically present (Standard 5.1)
  • Pre- or post-dating a notarial certificate with a date that is not the date on which the signer actually appeared before the Certified Signing Specialist to have his or her signature notarized (Standard 5.2)
  • Falsifying information in a closing document or notarial certificate (Standard 5.3)
  • Mailing an extra signed and sealed notarial certificate not securely attached to an actual closing document notarized by the Certified Signing Specialist (Standard 5.4)
  • Presenting only the signature page, and not all pages of the document, for signature by a borrower (Standard 5.9)

In addition, the Code requires the Certified Signing Specialist to inform the lender’s representative and closing agent for the transaction if the Signing Specialist witnesses any suspicious activity in connection with performing signing services and outlines several specific activities to report:

  • The signer appears unaware of the loan or the significance of the transaction or is being pressured or improperly influenced to sign documents, or possesses a physical disability requiring accommodation that the Certified Signing Specialist has not been trained or authorized to perform (Standard 5.6)
  • The signer affixes a signature that appears to be overtly inconsistent with the signature affixed in the Certified Signing Specialist’s Notary journal and which appears on the signer’s written identification (Standard 5.7)
  • Documents in the closing package are incomplete or contain blank spaces (Standard 5.8)
  • Actual or potential misrepresentation or falsehood known or witnessed by the Certified Signing Specialist in connection with a transaction (Standard 5.10)
  • A transaction the Certified Signing Specialist reasonably believes is unlawful (Standard 5.11)
  • Evidence of or a reasonable belief that a document or notarial certificate in the closing package has been tampered with (Standard 5.12)

The Code obliges the Certified Signing Specialist to report suspicious activity to the lender’s representative and closing agent for the transaction because both have an interest in mitigating any potential losses that could result.

There are occasions when attorneys in fact sign on behalf of the borrower, which can be a potential suspicious circumstance. In such instances, Standard 5.5 requires an attorney in fact to be approved by the lender’s representative, which usually is done prior to the signing. If use of the attorney in fact is not obtained prior to the signing, Standard 5.5 only requires the Signing Specialist to obtain approval from the lender’s representative or closing agent in order to proceed.

Finally, Code Standards 5.13 and 5.14 set the expectation that a Certified Signing Specialist will voluntarily disclose knowledge of a criminal act, whether committed personally or by others, to a lawful authority and fully cooperate with any investigation into the alleged criminal activity.

Bill Anderson is Vice President of Legislative Affairs with the National Notary Association

For a better understanding of the new signing specialist code, read other commentaries in this series of articles.

The Certified Signing Specialist Code Of Conduct: Guiding Principle 1

The Certified Signing Specialist Code Of Conduct: Guiding Principle 2

Certified Signing Specialist Code Of Conduct: Guiding Principle 3

Certified Signing Specialist Code Of Conduct: Guiding Principle 4

Comments

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Linda Hestilow Robertson

07 Oct 2014

All of these articles were Very good information. Thank you

John Clark

10 Jul 2014

Question: What do I do if I find that I have notarized a document that I later determine was false, and if I had known I would have rejected the applicant. Do I somehow cancel it, or just keep quiet?

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