Updated 2-16-22. When 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 is founder of CoachmeLaura.com and 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.