Generally, there are four kinds of state restrictions that may apply to Signing Agents and their ability to handle loan signings: attorney only states, fee restriction states, states that require an additional license, and loan package type limits.
The following states have restrictions that Notary Signing Agents should adhere to:
Connecticut
Prohibits out of state attorneys and non-attorney Notaries from conducting closings for most mortgage loans in Connecticut. This excludes home equity lines of credit, other transactions that don't require the issuance of a title insurance policy, and property located in other states.
Delaware
Requires an attorney admitted to the state bar to be present or involved in the closing of real property transactions.
Georgia
Requires an attorney admitted to the state bar to be present or involved in the closing of real property transactions.
Indiana
Requires a title insurance license for all closings.
Maryland
Requires a title insurance license for all closings.
Massachusetts
Requires an attorney admitted to the state bar to be present or involved in the closing of real property transactions. A Notary who is employed by a lender may notarize a document in conjunction with the closing of his or her employer's real estate loans.
Minnesota
Requires a closing agent license.
Nebraska
Limits the fees Notaries may charge (to the statutory maximum fees for notarial acts only). No ancillary fees, such as a courier fee, may be charged.
Nevada
Limits the fees Notaries may charge (to the statutory maximum). These fees include an hourly travel fee based upon the time of day traveled.
New York
Certain companies providing assignments to signing professionals may choose to only use licensed attorneys.
North Carolina
Limits the fees Notaries may charge (to the statutory maximum fees for notarial acts). No other ancillary fees may be charged.
South Carolina
Requires an attorney admitted to the state bar to be present or involved in the closing of real property transactions.
South Dakota
Authorities conflict about whether Notary Signing Agents can conduct signings without being an attorney.
Texas
Home Equity Line of Credit (HELOC) loans are subject to Article XVI, Section 50 of the Texas Constitution. Title 7, Section 153.15 of the Texas Administrative Code, clarifies that the closing must occur at the permanent physical address of a lender, an attorney, or a title company. This includes an indoor office or a parking lot.
Starting on January 1, 2022, wrap mortgage loans may only be closed by an attorney or a title company. A wrap mortgage loan is a residential mortgage loan that is (a) made to finance the purchase of residential real estate that will continue to be subject to an unreleased lien that attached to the residential real estate before the loan was made and secures a debt incurred by a person other than the wrap borrower that was not paid off at the time the loan was made, and (b) obligating the wrap borrower to the wrap lender for payment of a debt the principal amount of which includes the outstanding balance of the debt and any remaining amount of the purchase price financed by the wrap lender.
Utah
House Bill 47, clarifies the performance of notarial acts by a Notary, the receipt or delivery of a document, and the receipt of money for delivery to the escrow agent for the transaction does not require an escrow license. Prior to House Bill 47, Utah's insurance code restricted Notaries from handling funds without an escrow license.
Vermont
Requires an attorney admitted to the state bar to be present or involved in the closing of real property transactions.
Virginia
Restricts Notaries from conducting real property signings without an escrow license if they but once handle monies for closing costs.
West Virginia
Requires an attorney admitted to the state bar to conduct the closing of real property because these transactions are considered practice of law.
What are Notary attorney states?
The terms "Notary attorney state" or "real estate attorney state" are commonly used when referring to which states require a lawyer at closing for real property transactions. These deals involve legalese that may be difficult for borrowers to understand and if a title agent, escrow officer or Notary Signing Agent provides explanations, it could be considered the unauthorized practice of law.
In attorney closing states, lawyers serve as a third-party to ensure the legal requirements of the purchase are met, and that the interests of both the buyer and seller are protected. While an attorney must be present, a Notary Signing Agent still handles the notarization part of the process. Here's a list of attorney states for real estate closings:
- Connecticut
- Delaware
- Georgia
- Massachusetts
- New York
- South Carolina
- South Dakota
- Vermont
- West Virginia
What is an escrow state vs. attorney state?
The primary difference for Notary Signing Agents who work in an escrow or an attorney state is whether they are hired and how. Companies in escrow states typically use independent Notary Signing Agents for home loan closings. However, in attorney states, in-house staff Notaries usually handle notarizing during the mortgage closing process.
Note: These notices are based upon the best available information at the time of publication (February 18, 2021) and are not intended as legal advice. The conditions described above are subject to change at any time due to legislative, executive or administrative decisions or developments.