Generally, most states do not impose additional requirements for performing loan signing services in real estate closings other than holding a valid Notary Public commission.
There are some states that do have additional requirements for or limitations on performing loan signings in real estate closings. These additional requirements may prevent or restrict Notary Signing Agents from performing loan signings.
These requirements and limitations are:
1. Attorney involvement: By law only an attorney may conduct real estate closings, or by advisory opinion, custom, or practice an attorney may be involved in real estate closing.
2. Fee limitation: The law may limit the fees Notaries may charge in performing loan signings.
3. Professional license: By law an additional professional license is required to conduct real estate closings.
4. Loan limitation: Limitations on how certain types of real estate loans are closed could limit Notaries in performing signing services for those loans.
States with Notary Signing Agent restrictions are:
Attorney closing states
The terms "attorney closing state" or " attorney-only state" are commonly used to refer to certain states that require a lawyer to attend or supervise the closing of real estate transactions. State law or supreme courts in these states have determined that real estate transactions involve technical legal concepts and rights that may be difficult for sellers and borrowers to understand. These states also have concluded that a non-attorney — including a Notary Signing Agent — who explains these legal concepts and rights to a seller, buyer, or borrower at a closing has engaged in the unauthorized practice of law.
In attorney closing states, lawyers ensure the legal requirements of the purchase or refinance loan are met, and that the interests of both buyer and seller are protected. While an attorney must be present, a Notary Signing Agent may still handle the notarization of loan documents. Here's a list of known attorney closing states:
- Connecticut
- Delaware
- Georgia
- Massachusetts
- North Carolina
- South Carolina
- Vermont
- West Virginia
In addition, by custom or practice an attorney may be involved in a real estate closing in the following or in parts of the following states:
- Illinois
- New Jersey
- New York
- Ohio
Escrow/title company state vs. attorney state
Companies in escrow/title company states depend on title or escrow companies to handle real estate closings. The primary difference for Notary Signing Agents who work in an escrow/title company or an attorney state is whether they are hired and how. Typically, escrow/title company states use Notary Signing Agents to conduct the signing of documents for residential loan closings. However, in attorney states, in-house staff Notaries usually handle notarizing during the closing process.
Connecticut
Attorney involvement required: Connecticut law prohibits out-of-state attorneys and persons who are not Connecticut attorneys from conducting real estate closings for most mortgage loans. Home equity lines of credit, loans that don't require the issuance of a title insurance policy, and loans for property located in other states are excluded.
Delaware
Attorney involvement required: Only a Delaware attorney may conduct the closing of a sale or refinance of Delaware real estate.
Georgia
Attorney involvement required: The Georgia Supreme Court affirmed a State Bar advisory opinion concluding that a real estate closing is the practice of law and requiring a Georgia attorney to be present or involved in real estate closings.
Indiana
Professional license required: Bulletin 135 issued by the Indiana Insurance Department states that anyone — including a Notary Signing Agent — who conducts a real estate closing must hold a title insurance producer license.
Maryland
Professional license required: The Maryland Insurance Administration issued Bulletin 16-34 clarifying that persons conducting a real estate closing must hold a title insurance producer license. Under the Insurance Article of the Annotated Code of Maryland 10-101(m), a title insurance producer independent contractor who is under the supervision of a licensed and bonded title insurance producer may also perform real estate closings.
Massachusetts
Attorney involvement required: Massachusetts G.L. 222(e) prohibits a Notary who is not a Massachusetts attorney from conducting a real estate closing. However, a non-attorney Notary who is employed by a lender may notarize a document in conjunction with the closing of the employer’s real estate loans.
Minnesota
Professional license required: The Minnesota Department of Commerce issued an advisory stating that persons conducting a real estate closing must hold a closing agent license.
Nebraska
Fee limitation: A Nebraska law has been construed to limit Notaries to charging only the maximum fee for a notarial act and the per-mile rate for travel authorized for government employees.
Nevada
Fee limitation: Nevada statute limits the fees Notaries may charge for notarial acts and travel fees based upon the time of day traveled.
New York
Attorney involvement required: Certain companies providing assignments to Signing Agents may choose to use only licensed attorneys. In some parts of the state a New York attorney may be required to conduct a closing for the purchase or sale of real estate.
New York Real Property Law 280-b.7 requires both the lender and mortgagor of a reverse mortgage loan to be represented by an attorney at the time of the closing and one attorney for each party must be present to conduct the closing.
North Carolina
South Carolina
Texas
Loan limitation imposed: Article XVI, Section 50(a)(6)(N) of the Texas Constitution protects Home Equity Line of Credit (HELOC) loans from a forced sale for the payment of all debts provided they are closed in the office of a lender, an attorney, or a title company. 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.
Effective January 1, 2022, Texas law provides that a lien securing a wrap mortgage loan is void unless the wrap loan and the conveyance of residential real estate securing the loan is closed by an attorney or a title company.
Vermont
Attorney involvement required: Requires a Vermont attorney to be present or involved in a real estate closing.
Professional license: An advisory ethics opinion permits a paralegal under the supervision of an attorney to conduct a loan closing on behalf of a consenting lender client if the paralegal’s role is ministerial in nature and the attorney is available for questions.
Virginia
Professional license required: The Virginia Bureau of Insurance has stated that anyone who conducts a real property closing must hold a title insurance license if they but once receive or handle money for closing costs.
West Virginia
Attorney involvement required: An advisory opinion concludes that a West Virginia attorney must conduct real estate closings because these transactions are considered practice of law.
Note: The information presented here is based upon the best available information at the time of publication (September 13, 2022) and is not intended as legal advice. The conditions described above are subject to change at any time due to legislative, legal case, executive, or administrative decisions or developments. Notary Signing Agents should consider the information presented here and consult with an attorney before offering loan signing services if necessary.