Tuesday, October 16, 2007

buyer beware when hiring a notary public

Be explicit. Are you buying notarial services OR are you buying "signing agent" services?

You see, things are very confused in the notary business these days. Let me take a moment to explain.

Each state has its own set of laws concerning the closing of a real property transaction - purchase or refinance.

In all states, attorneys may perform the transaction.
In many states, attorneys ONLY may perform the transaction.

Many states license title insurance agents and/or producers. In those states these licensed title professionals may perform all or part of the transaction.

Here's where it gets confused. A few documents in a real property transaction require the seal of a notary public, therefore most attorneys and title professionals must by necessity also be notaries. Got that?

Enter the National Notary Association [NNA] and other notary groups who got the idea somewhere - probably from a big subprime lender - that notaries could perform real property transactions. They decided to "pretend" that the closing wasn't a closing at all so they could "pretend" that they weren't breaking any laws. They decided to call these notaries "signing agents" and started recruiting and offering advertising and marketing plans and "certification" courses - none of which had any basis in law or licensure.

This mass marketing and recruitment of notaries started about 15 years ago and has mushroomed to the point where it's not about teaching existing notaries, they actually recruit people to BECOME notaries just because they think there is big money in the real estate business.

So, if you need a notary seal on a few documents, you must be VERY careful that the notary you hire is only charging you to seal the documents and isn't adding "signing agent" fees because many don't know the difference.

Here's an example I found on the notary forum, Notary Rotary:

"What would you charge for signing a set of 1st docs on an out of state land purchase? The signing will be here and the client has all the docs. Travel would only be about a mile."

Now, I'm going to guess that the "client has the docs" means that the homebuyer is already working with an attorney or title professional in the state where they are purchasing the real estate. They are already paying the attorney or title professional to perform the real property transaction.

The homebuyer is simply involved in a remote closing, which means that they are signing documents and returning them to their attorney or title professional to complete the transaction. There are a few documents in the package that require a notary seal. This means that those few documents must be signed before a notary - just those few documents.

States regulate the fees a notary may charge per seal. The fee is usually $2 or $5. So, let's say this homebuyer has 5 documents that require notarization. If the homebuyer drives to the notary's office, the total cost for notarization will likely be $25.

Want to bet this notary will attempt to charge more, and for what?

As I post this item, there are two responses on Notary Rotary. The first implies the notary should charge, the "basement" rate -whatever the means. The second response seems to indicate that the notary should charge for time while the homebuyer reads the documents.

Homebuyer - if you are already paying an attorney or title professional to perform your transaction, review your documents and have them answer your questions before you go to the notary public. Take ONLY the documents that need notary seals to the notary's office. Do not give them any excuse for thinking they are providing "signing agent" services. Really - the situation with notaries is out of control. I know it sounds ridiculous, but it's true.

Be very careful when hiring notaries in a real property transaction. Be specific about services and get a written quote before you hire.


Diane Cipa, The Closing Specialists® said...

Just happened to bump into this so I thought I would share. I'm not certain how they thought I would see the response because no one sent it to me, but using good web tools I did find it, so here goes......This is from CD&C (whoever they are)...

A few days ago I read a very disturbing blog entitle “Buyer Beware When Hiring Notary Public;" I think all notary signing agents should check it out for themselves. Please send us your feedback at info@cdcnewsletter.com. Below please find our response to Diane Cipa of The Closing Specialists.

In response to your blog “Buyer Beware When Hiring Notary Public”. My first reaction was to ignore you, I figured you were someone who knows better but wants the attention. But as a notary signing agent I had to respond for the sake of my fellow notary signing agents who have worked very hard but are never appreciated. As a notary public if someone comes to me and ask me to notarize documents I charge them the states regulated fee which for me living in New York is $2.

However, when a Lender calls me and asks me to take documents to borrowers who in most cases live at least 30 minutes from my house it is ignorant of you to say that it is fraud for me to charge $125.00. First the Lender will email me the documents which are usually about 50 or more pages of which I am asked to print two sets. I am asked to call the borrower to confirm the signing. Most Lenders expect me to have errors and omission insurance and in addition to completing the state requirement for becoming a notary public the Lender ask that I take it a step further and get certified. Most Lenders require background checks. After the closing I have to fax back documents to the lender.

For your information …

* The Lender does not pay for my notary supplies.

* The Lender does not pay for my certification.

* The Lender does not pay for my errors and omission insurance.

* The Lender does not pay for my background check.

* The Lender does not pay for the pages they ask me to fax back to them.

* The Lender does not pay or provide the paper for me to print more than a 100 pages.
* The Lender does not provide the toner for my printer.

* The Lender does not pay my internet service so that I can access email ...accessing the loan documents.

* The Lender does not pay for gas or toll for me to get to the location most convenient for their borrower.

* The Lender does not pay maintenance for my car.

* Some Lenders do not pay me if the borrower does not show up.

* Some Lenders do not pay me if the borrower refuses to sign.

* Some Lenders do not pay me if the loan never gets funded.

* Some Lenders do not pay me at All!

Its easy for an ignorant person to describe the notary signing agent’s duties as a “point here sign here job” but when the borrower ask me questions such as What is my interest rate, What are my monthly payments, When is my first payment due, Where should I send my payments among other things, the Lender expect me to know the forms and be able to show the borrower where to find that information.

Lets not forget the borrowers who decide to read the loans documents details which means I have to sit there for more than an hour. Ms. Diane Cipa, I am sorry but my notary signing agent fees of $125 is more than reasonable!



Diane Cipa, The Closing Specialists® said...

OK, so here's my response to CD&C:

Though my opinion of notary signing agents as a provider of settlement services in lieu of an attorney or licensed title agent/producer is fairly well published, the post you are referring to is directed to those transactions in which the notary is NOT being asked to perform in the capacity of a signing agent.

Anonymous said...

Dear Diane Cipa,

I am directing this comment to you.
I am a Mortgage Broker, a Real Estate Broker, and a Notary. I've been a Closing Agent Since 1978, a Real Estate Broker since 1979, and a Mortgage Broker since 1981.
What planet do you live and work in? It's certainly not earth. With someone with so many creditible credential posted on your profile. You must be living in another world. I guess you do not know what being "down to earth" means. Somone with so many years of experience should have written something helpful and TRUTHFUL. It's quite obvious, you are not qualifed to share you opinion in this matter. Who are you suppose to be impressing? Everything in your statements are bias and incorrect. Take my advise. Leave the beneficial insights to the real pros. If I were you. I'd ask for refunds in all the so-called training classes and schools you paid to take. Your negative and ill advised crusade isn't in ANYONE'S interests except for yourself.

Diane Cipa, The Closing Specialists® said...

Why, thank you, anonymous for directing your comment to me. I do appreciate your having taken the time to read the post.

I note lots of notary activity on the site today and so let me say hello to you all. Welcome to Title Insurance Talk, my consumer oriented blog. Some of you may have visited Radical Title Talk, which is more of an insider's discussion.

In this post we are discussing a scenario in which a consumer is already working with an attorney or title agent who is performing the closing. Here's is the specific section which you may wish to re-read:

[Now, I'm going to guess that the "client has the docs" means that the homebuyer is already working with an attorney or title professional in the state where they are purchasing the real estate. They are already paying the attorney or title professional to perform the real property transaction.

The homebuyer is simply involved in a remote closing, which means that they are signing documents and returning them to their attorney or title professional to complete the transaction. There are a few documents in the package that require a notary seal. This means that those few documents must be signed before a notary - just those few documents.]

The consumer in this scenario has need for a notary in the traditional sense NOT a signing agent. Do you understand the difference?

I imagine that we do have in our notary audience this evening quite a few who do understand. If so, you may wish to comment and help your notary brethren. I would hate for the consumer and professional readership this blog has to read the responses and note the lack of reading comprehension.

You see, notary signing agents on the whole seem to think they are better readers than the average mortgage consumer. If that is the case, this blog post should be far simpler to read and explain than FHA reverse mortgage instruments and disclosures, wouldn't you agree?

Anonymous said...

My name is James Arndt, I am a California Notary Public. I am also an engineer. I can read and comprehend, so please don't group me with someone that cannot. In regards to your item, I would charge the state regulated fee of $10 per signature (not seal, as you stated); thus, 5 signatures on one 1 doucment is the same as 5 documents with 1 signature each.
However, Notary Public's are free the charge for added expenses such as travel (in case you have not notice, gas prices are near $3 per gallon), not to mention wear and tear on a mobile notaries vehicle. Since I am strictly a mobile notary a travel fee would always be included in my fees. What a client would be paying for is conveniece (spelling?), if they wish to pay just the standard regulated fee, then go to a Notary Public that has an office and office hours that are normally the same in which the client would have to be at work. It's not rocket science, but do the math, pay a notary to come to me at my convenience; or take time off of work and hope to find a notary at his/her office. Hmm, lose pay or pay someone a small fee to come to me.

Furthermore, if a Title Company calls to do a Notarization, rarely does the client have the documents already. Just as CD&C stated the fees that the notary incures are not paid for by the title company ro anyone else for that matter.

Most Notaries are mobile, so good luck on finding one that will do the type of signing you mentioned. I have found most will not leave thier house for less than $100. I will if it is reasonable travel. I always ask what is going to be notarized, give a quote and agree on a fee;
if a client does not like it, then they are free to look elsewhere.

Are you in business to lose money?
Then dont expect a Notary to be in business to lose money either.

Diane Cipa, The Closing Specialists® said...

Hi, James. Thank you for your comments because I think you have helped crystalize the point I was trying to make. That is that a consumer who is hiring a notary should be able to go to the office of a notary public and sign only those documents which require a notary seal, pay the regulated fee and leave. In that case, it's simply a traditional notarial service.

Contrast this with a transaction in which a title company or signing service hires a notary to act as a signing agent which involves other services and hence a different price.

I only use on-staff closers. when we have a borrower who wants a remote closing, we download and prepare all documents, make all of the copies and courier those copies to the borrower with explicit instructions showing them where to sign. Their questions are answered by our staff and the mortgage lender. They are instructed to go before a notary to sign certain documents. Over the years, this simple task has been easy, but for some reason during the last year, it's not. We have had several instances in which our borrowers have been hard pressed to find a notary who will simply witness those few documents.

Why? I believe that many notaries presume that as soon as they learn the documents are mortgage related that they can command a signing agent fee and that is not right.

So, it's a fair warning to consumers that it's "buyer beware when hiring a notary public."

Diane Cipa, The Closing Specialists® said...

Note to consumers. If you are having trouble finding a notary who does not want you to come to them, try one of those vehicle title transfer places or Kinkos or AAA or your local bank. There are lots of good old fashioned notaries willing to do good old fashioned notary work.

I wonder if the departments of state will consider when appointing a notary whether or not the notary has the ability and willingness to serve the public without charging a mandatory travel fee? NNA, any thoughts on that?

Karen Crabtree said...

I have read through all the comments about Notary Signing Agents, and I am her to tell you guys you sound like children squabbling. I am a Notary Signing Agent and I am proud of the jobs I have done. My thoughts on this matter are if they wish to hire a Signing Agent then it is their choice. If you check the 1003 the Signing Agent fee is usually listed as payable. Diane, we Notary Signing Agents don;t slam your job so why pick on us? As one person said that responded we have to know the docs as well as the LO or Escrow Officer. We may not be able to give them advice but our borrowers due appreciate the fact that we can point them in the right direction for their answers. Like I said it's their choice. Not all Notary Signing Agents are evil like the one that must have burnt you for you to have such a bad opinion of Notaries. You know the Signing Agent must know what they are doing or they wouldn't get calls back. It's really that simple not as complicated as you think it is.
And for the record most if not all states that have Non Attorney Real Estate Signing, enter the Notary Signing Agent, do regulate these Notaries. And try not to come across so argumenative when replying to my post.

Diane Cipa, The Closing Specialists® said...

Hi, Karen: I'm going to guess the regulations you are referring to are those that cover only notarial duties.

Here's a traditionalist's point of view. The performance of a closing in a real property transaction is the practice of law. I believe this is the case in all states - even those who are silent on the issue UNLESS there exists some specified authority for others. In PA, this specified authority rests with title insurers, realtors, and mortgage lenders - all of whom must be licensed. Each category is restricted. For instance, a title insurer may only perform closings in connection with the issuance of a title policy. A mortgage lender may conduct closings of its own transactions. Realtors have their own sets of restrictions. Nowhere in the notary law in PA is there identified any authority to perform a real estate closing.

That said, you may wish to visit this link to Clearing Title blog for some other recent comments on the issue.


I appreciate your taking time to comment and hope that at some point the notary community will understand it's about regulation. The well qualified signing agents who have related experience or have learned by trial and error how to do a good job should not be afraid of regulation and licensure.