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Updated 10-11-22. Notary Signing Agents encounter many different types of documents during loan signings. Some of these documents require notarization or have other signing instructions. In this article we answer common questions about Compliance Agreements, a document found in many loan packages.
What is a Compliance Agreement?
A Compliance Agreement is a document in a closing loan document package in which a borrower agrees to “comply” with requests from the lender or closing agent to correct typographical or clerical errors and inadvertent mistakes in the loan documentation after the loan has closed.
For example, the property address on the loan may be misspelled or contain a missing digit. Or the document may not have been signed correctly and need to be re-executed. The borrower may be required to respond to a lender’s written request for assistance correcting errors within a specific time period.
What is the purpose of a Compliance Agreement?
The Compliance Agreement is often required for originating lenders to sell, convey, or market a loan to a secondary market investor such as Fannie Mae or Freddie Mac. As a condition for doing so, the lender must ensure the loan documents conform and are acceptable to investors.
Does a Compliance Agreement require notarization?
Compliance Agreements are commonly notarized with either a verification on oath or affirmation (jurat in some states) or acknowledgment. The Notary should check the Compliance Agreement for notarial certificate wording to indicate if a notarization is required and the type of act needed. However, not all Compliance Agreements require notarization.
Are there other names for a Compliance Agreement?
Yes. A Compliance Agreement may also be referred to as an “Errors and Omissions Compliance Agreement,” a “Document Correction and Re-Execution Agreement” or a “Document Correction Agreement.” Sometimes a Compliance Agreement may be included together with several other different certifications on a single form.
David Thun is an Associate Editor at the National Notary Association