What NSAs Need To Know About Regulations, Training And Certification
(Originally published in the May 2013 issue of The National Notary magazine)
Few can doubt that Notary Signing Agents are facing a sea change in the way they conduct business. As the mortgage industry recovers from the Great Recession and the foreclosure crisis — and adapts to new regulatory initiatives — every facet of a Signing Agent’s performance at the signing table is coming under scrutiny. (See January 2013 issue of The National Notary.) There is a growing expectation that lenders and title companies will hold NSAs to higher standards of training, certification and professional conduct. No longer will the mortgage industry consider what happens at the signing table an afterthought.
In this issue, The National Notary digs deep to help you understand how the world of Signing Agents is transforming, why, and what changes you can expect in the very near future. You will hear from National Notary Association executives who, over the past year, have been working closely with lenders, title companies and mortgage servicers to improve collaboration with Notaries. And you will also hear from First American Mortgage Services which — amid an industry facing an ever-changing regulatory environment — felt it was imperative that it communicate with Notaries directly to ensure sound, legal notarizations.
After perusing these pages you will have a clearer understanding of how your industry is changing and what to expect in the coming months.
As a real estate and finance leader for more than 25 years, Robert A. Camerota, Sr., knows signings. From the boom years of the 90s to the financial crises of the 2000s, he has been through the market’s highs and lows, and has become expert at adapting to them. Today, Camerota serves as First American Mortgage Services’ Chief Operating Officer of the Origination and Valuations Divisions — divisions that rely highly on properly and legally performed notarizations. The changes now looming over the industry are so significant that Camerota will attend the NNA 2013 Conference in June to interface directly with the Signing Agent community. He recently spoke to editors of The National Notary in a rare, candid interview. His remarks follow:
NNA: There have been a lot of regulatory changes made to the mortgage industry in the wake of the foreclosure crisis. In what ways do these regulatory changes impact the role of signing professionals, as well as how First American selects its signing professionals?
CAMEROTA: While numerous regulatory changes redefine how mortgages are originated and serviced, and ultimately impact every entity in the lending ecosystem, there are two underlying themes that we believe have a direct impact on the role of signing professionals: vendor management and consumer experience.
Vendor management — Increased responsibility and accountability for the actions of vendors in the closing process have caused loan originators to take a closer look at those who provide outsourced services on their behalf when closing a mortgage. Loan originators are defining and documenting their closing processes for regulators and investors, including the process for selecting and monitoring signing professionals. Even at a transactional level, the individual results of state and federal loan audits can affect vendor selection and lead to new performance criteria for signing professionals.
Consumer experience — With the Consumer Financial Protection Bureau (CFPB) now collecting and tracking consumer complaints, loan originators are further compelled to provide a positive consumer experience. As such, they are evaluating every “touch point” with the borrower, including the loan document signing, to support a consistent and high-quality consumer experience.
For First American and its independently contracted signing professionals, these regulatory changes have been challenging because each loan originator can have a different interpretation of the quality criteria needed to select and manage the performance of those who provide closing services. By working together as an industry to define best practices for signing professional quality, we believe it is possible for us to help lenders meet these new regulatory requirements while bringing a level of standardization that also helps independent signing professionals and improves the borrower’s closing experience.
NNA: In this increasingly regulated climate, we understand that there is a shortage of highly qualified signing professionals. Is that true, and how do title companies such as First American ensure that the signing professionals they use are capable of performing their role responsibly and efficiently?
CAMEROTA: It is true that the current volume of refinance transactions is straining the existing network of qualified signing professionals for originators and title and settlement companies. This has been the direct result of a lapse in the number of Notaries who retained their commissions in the economic downturn, and current historic low interest rates and government programs that have kept refinance volume high.
We find that the basic practices for managing performance quality, including the contracting, qualifying, and performance monitoring of signing professionals, continue to be effective in times of high volume. Once an independent signing professional is added to our network, they are eligible for appointment opportunities in their designated area, and their performance is tracked for quality. Signing professionals may be reprioritized for minor infractions and discontinued within the network for major or ongoing quality issues.
The challenge comes when “highly qualified” is defined differently by each loan originator, as this can narrow the available network of signing professionals that meet the customized criteria. One lender may require signing professionals to wear certain apparel while another may have a 30-item checklist of do’s and don’ts for the signing process. While title and settlement companies can use technology to track those signing professionals that qualify under each lender’s unique criteria, these dissimilar requirements can ultimately limit the closing times and signing options available to the consumer, putting additional strain on the availability of qualified signers.
NNA: Should signing professionals be required to meet certain qualifications in order to perform their role, including compliance certification, education courses, or other professional training, as determined by the hiring company?
CAMEROTA: Yes. With some banks and mortgage lenders, loans originate from centralized call centers, and other retail facilities are conducted by Internet and phone; the only face-to-face contact the consumer may have during the loan process is with the signing professional. While the signing professional is a subcontractor of the settlement provider, in the eyes of the consumer, the professional at the closing table represents the lender. The ability of the independent signing professional to influence the consumer’s perception of the lending experience is not new, but regulatory changes are now creating pressure for loan originators to monitor this aspect further through qualifications, certifications and training.
NNA: Should there be industry-established standards for Notary signing professionals nationwide, and, if so, what should they include?
CAMEROTA: We believe that industry-established standards, created in partnership with lenders, settlement providers and the Notary signing professional community, would be beneficial. First, we recognize the strain on independent signing professionals who service multiple lenders, because they are trying to meet each lender’s unique requirements. If lenders and signing professionals work together to develop industry-wide standards, it will create a more unified approach to all transactions. Second, as we’ve seen in other areas of the financial services industry, wherever an existing standard has already been defined (such as MISMO®), regulators are more likely to incorporate some or all of the criteria identified — especially if key stakeholders have been involved in the creation of such standards.
A nationwide standard for Notary signing professionals could be categorized through four major areas:
1. Certification (organizational and state credentials, and education/training — this is an area where we rely heavily on the expertise of associations like the NNA).
2. Performance (punctuality, accuracy, communication and speed of tasks performed).
3. Professionalism (appearance and behavior during the transaction).
4. Customer Service (ability to handle consumer requests and inquiries during the transaction or refer them to the appropriate source for answers).
NNA: In addition to professional certifications, what qualities does First American look for in its network of independent signing professionals? Specifically, how do professionalism and customer service factor in?
CAMEROTA: In addition to the items noted above, proper certification and consistent performance have always been basic requirements for First American’s network of independently contracted signing professionals. We foresee the qualities of professionalism and customer service becoming more significant factors in how signing professionals will be selected in the future. For example, there is more emphasis now from originating lenders on Notary appearance, and we provide lender-prescribed “dress codes” to inform Notaries of the lenders’ requirements we receive regarding appropriate business attire, even when signing in the consumer’s home or other location (such as a restaurant).
Another area of challenge for signing professionals is handling consumer inquiries during the signing. We want the Notary professionals to remain objective during the transaction, so we provide detailed instructional sheets that assist them in directing consumers to the lender or the settlement provider for specific loan details.
To evaluate these important qualities, we conduct surveys directly with consumers after the signings, whenever possible. If a signing professional shows up in a tank top and shorts, or comments inappropriately on the terms of the loan, those quality issues can be cause for a lowered rating or even immediate discontinuation from our network.
NNA: We understand First American launched a White Glove Program for signing professionals. Can you explain how it works and why you chose to create it?
CAMEROTA: We’re very proud of our network of independent signing professionals who have earned acceptance into our White Glove program. These are the Notary signing professionals who have continually met our highest criteria in all four categories: certification, performance, professionalism and customer service. We review their qualifications on a weekly basis. These top-tier individuals are called first by our scheduling team about available business and are granted exclusive access to available business opportunities via our online tools.
We developed this program because we recognized that a segment of our signing professionals were providing exceptional service to consumers on a continual basis and wanted to align them with our originating lender clients that have increased their quality requirements. These are the most dependable Notaries; they consistently show up on time, follow the training required by our lenders, and provide a positive, professional signing experience for consumers. We hope that signing professionals not already in the program will be inspired to work toward qualifying for this high level within First American’s network.