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Signing Agent Tip: Explaining Loan Documents — What You Can And Cannot Do

explain-loan-docs-resized.jpgWhen Notary Signing Agents go to the signing table, they bring hundreds of pages of documents, and borrowers often have questions about them. But there is fine line between what an NSA can and cannot say, and Hotline often gets calls asking about this.

While you may describe loan documents, you are never permitted to explain how loan documents will affect borrowers. But how do you define "explain," and how do you know if you’ve crossed the line?

Why Notary Signing Agents Must Not Explain Loan Documents

As an NSA, you are not qualified or authorized to act in the role of a loan officer, escrow agent or similar professional authorized to explain loan documents. If borrowers have questions, then you should refer them to the contracting company — the title company or signing service that hired you — or to their lender.

Contracting companies want to ensure NSAs do not misdirect the borrower, or worse, create a legal liability for the contracting company or lender. If you cross the line in explaining documents, the contracting company will likely not hire you again. If the borrower suffers a loss as a result of the explanation, they might sue you to recover damages.

You Are A Presenter, Not An Advisor

A common term used to describe an NSA’s role in the signing is "presenter." Essentially, you introduce the document to be signed. You will read the title, describe the document, locate the signature lines and any places for initials.

For example, if you are presenting a deed of trust, you might say: "This is a deed of trust, and this document is recorded with the county and is evidence of the lender’s security interest in the property. It contains the name of the borrower, and the title holder of the particular property. Here is the signature line; please sign your name and enter today’s date."

You can also go through a loan package with a signer by presenting multiple documents, and pointing out places to sign and initial, as discussed above.

Keeping the presentation simple protects you from overstepping your role as a Notary Signing Agent. You may wish to follow a signing script authorized by the contracting company, if one is provided, or you may use The Notary Signing Agent Code of Conduct.

Warning Signs That You’ve Crossed The Line

But how do you avoid crossing a line to giving inappropriate advice? Avoid discussing information such as how an interest rate was calculated, how the signer should sign his or her name, or why the document is included in the package.

Offering advice is also a red flag. You should avoid offering personal opinions about the format or content of the package, or about the terms of an agreement. For example, do not tell a signer you think an interest rate seems too high, even if asked.

Any questions the signer has about the transaction, whether they should proceed with it or whether it’s in their best interest, should be directed to the contracting company.

Laura Biewer owns At Your Service Mobile Notary in Modesto, California. She also teaches seminars for the National Notary Association and is a regular presenter at the NNA’s annual Conferences.

12 Comments

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Bruce Coffman

19 Nov 2018

I have 49 yrs. experience as a mortgage lender. I know the docs for a closing in my sleep. Is it OK for me to explain the purpose of TILA or RESPA without defending or commenting on the specific numbers contained therein? Or, should I just refer any and all questions to the loan officer?

Julie

19 Nov 2018

“Avoid discussing information such as ... how the Signer should sign his or her name.” So, I’m not to tell the Signer to include their middle name in their signature of that is what the document reads ie, John Kevin Smith? BTW, I love getting these emails with all of these useful tips!

Luz Rose

19 Nov 2018

“How the signer should sing”... well if they sign wrong, we won’t get pay. And we as people don’t listen too well, and signers needs to sign exactly as their names read in the signature line. Please comment on this.

Dina Dennis

19 Nov 2018

By Law you cannot tell a signer how to sign their name. Their signature is a way to identify them. Our JOB as an signing agent is to identify THE SIGNER.. dictating how they sign is unlawful! PERIOD.

Dina Dennis

19 Nov 2018

Dictating how the signer signs his signatures is unlawful. A persons signature is how we are able to identify them. Instructing then otherwise defeats the purpose of or Role as a signing agent!

Wendy Campbell

20 Nov 2018

With over 30 years experience as a "Presenter" I have had more than one set of docs that require resigning because the borrower would not sign the way their name was typed (omitting middle initial for instance). My job extends beyond just identifying the signer... every Notary Public does that. I would at least advise the signing service/lender and let them make the call.

Oscar Rochin

20 Nov 2018

Should be compare the signature to the one on their Identification Document?

National Notary Association

21 Nov 2018

Hello. This article offers some tips for checking a signer's ID: https://www.nationalnotary.org/notary-bulletin/blog/2017/05/five-tips-authenticating-signer-id

Laura

19 Mar 2019

Bruce I would limit my discussion to general function of the document as that is your role at the signing and it only extends your time which can cut into your available time for the next assignment 😀

Laura

19 Mar 2019

I direct the signer to how their name appears on the document and indicate the lender/title direction is listed below the signature line😊

Laura

19 Mar 2019

Wendy We can let the signer know what is the lender/title expectation for signature by pointing to where their name is typed on document 😊

RONNIE RON

10 May 2019

Can anyone direct me to a place where I can learn where a borrower should sign, and how to explain each document that requires a signature? I've seen videos of signing agents briefly explaining to the borrower what they are signing and points 2 the line they require a signature or initials. most videos are asking you to buy their course so u can learn. how can I learn without having to buy someone's course?

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