The National Notary Association is urging Virginia Signing Agents to voice opposition to a proposed regulation that would require NSAs in the state to become licensed settlement agents.
The State Corporation Commission is taking public comments through February 16, 2016. Notary Signing Agents who want to comment can do it through the Commission’s website. Scroll down to find entry INS-2015-00170 and click the “submit comments” link.
You also can send comments via U.S. mail to:
Joel H. Peck, Clerk
State Corporation Commission
c/o Document Control Center
P.O. Box 2118
Richmond, VA 23218
Make sure to include a reference to “Case No. INS-2015-00170.”
Impact on Virginia NSAs
Under the proposal, anyone conducting a closing conference to sign real property documents and receiving funds would have to meet the licensing requirements for settlement agents. “Anyone” would include Notary signing agents. Among the requirements, you would have to obtain:
- A license as a title insurance agent. To obtain a license, you’d have to take a pre-licensing course, pass the title examination and be appointed by a title insurance company.
- An errors and omissions insurance police of at least $250,000 per claim or occurrence;
- A fidelity bond of at least $100,000 per claim or occurrence; and
- A surety bond of at least $200,000.
Below are the comments the NNA submitted.
The NNA’s Comments
The proposed regulations will require 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 of the Code of Virginia and accompanying regulations.
This would mean that independent contractor Virginia Notaries Public who are signing agents would be required to become licensed as a settlement agent. We strongly urge you to reconsider this policy.
The duties of signing agents hardly rise to the level of requiring an additional license and the attendant financial responsibility of settlement agents in the commonwealth. The essentially clerical functions of signing agents include:
(1) receiving documents for a loan signing and printing them out, if the documents are received electronically;
(2) couriering the documents to the appointment at which documents are signed;
(3) presenting papers to be signed or initialed;
(4) notarizing any applicable instruments; and
(5) delivering the signed documents and any stipulations received from the borrower at the signing appointment to the overnight shipper or settlement agent handling the closing.
It should be pointed out that signing agents operate only under the direct supervision of a lender or a settlement agent. The signing agent may not advise a borrower about a loan or explain the terms of any document presented to the borrower; such advice and explanations may only be provided by the lender or settlement agent. If a borrower poses questions at a loan signing appointment, the signing agent may not answer the question, but instead must contact the settlement agent by phone from the signing table.
If the Bureau of Insurance adopts the proposed regulations, Virginia would be only one of four states that require Notaries Public who are involved in residential finance transactions to obtain a closing agent or title insurance producer license. In fact, in the last couple of years two jurisdictions – Utah and the District of Columbia – repealed their licensing requirements or provided carve-outs for Notaries Public because they understood the purely clerical and ministerial functions of a Notary Public do not necessitate licensure.
The rise of the signing agent in the commonwealth of Virginia and elsewhere is a pure expression of the marketplace in action, a sheer product of market need. The demand comes from lenders and settlement agencies, who seek to better serve Virginia consumers and expedite processing of a rising tide of loans, and from consumers, who seek convenience and ease in obtaining a mortgage. The many Notaries in communities around Virginia willing to be on call to bring their services as an impartial witness to the remotest client provide a sound business solution. It is the position of the National Notary Association that state governments should encourage – or at least not impede – the operation of what has proven to be an exceedingly useful vocation.
We respectfully urge you to reconsider the proposed regulation and to clarify in it that signing agents are exempt from the licensing requirements of settlement agents.
Text of the proposed Virginia regulation