VA Administrative Rule (2016)
Rule/Regulation
SummaryThe State Corporation Commission has revised its settlement agent rules and clarified that NSAs who handle funds in connection with a loan signing assignment or real estate closing must be licensed as a settlement agent.
AffectsTitle 14, Agency 5, Chapter 395 of the Virginia Administrative Rules.
Changes
- Includes in the definition of "settlement agent" the following: "Any person, other than a party to the transaction, who conducts the settlement conference and receives or handles money shall be deemed a 'settlement agent' subject to the applicable requirements of Chapter 27.3 and this chapter."
AnalysisIn Virginia, for quite a few years now Notary Signing Agents could perform loan signings without becoming licensed as a settlement agent if they did not handle funds at a loan assignment -- essentially not handling checks for closing costs. When the State Corporation Commission published proposed rule amendments for settlement agents, the Deputy Secretary of the Commonwealth and 176 Notaries wrote comments expressing concern that Notaries would be required to obtain a license as settlement agents under the proposed rules. In its formal response to the comments, the SCC issued the following guidance to clarify its position: "A Notary Public may obtain signatures on closing documents without a title insurance license or settlement agent registration when acting on behalf of a properly licensed and registered settlement agent provided that the Notary Public does not receive or handle money, and/or does not sell, solicit, or negotiate a contract of title insurance." So, the practice in Virginia will remain as it has been: as long as a Notary does not handle a check for closing costs, the Notary may operate without a settlement agent license.
Read the adopted administrative rule.