By MICHAEL ROBINSON, National Notary Association
Originally published at MortgageDaily.com, March 17, 2011. Reprinted with permission.
Notaries Are Key To Rebuilding Trust In Mortgage Transactions
The nationwide foreclosure scandal in 2010 shocked the country with the massive amounts of money lost nationwide. A significant part of the blame was placed on improperly performed notarizations. But this doesn't tell the whole story.
The clear message that emerged from the crisis is that many people -- whether they are signers or employers -- do not understand the duties and responsibilities of the Notary Public office. As a result, many firms unintentionally or even deliberately ignored proper procedure in pursuit of higher profits.
Had more lending institutions supported proper Notary procedures, many of the problems associated with flawed foreclosure documents could have mitigated or even prevented.
To rebuild trust in mortgage transactions requires that ethical notarial practices be given priority in the workplace -- not only by the Notaries themselves, but by their employers, document signers, as well as all persons relying on the integrity of the document. Each group must play a part in strengthening trust in notarization, as described below.
You must support your Notaries following the law.
Pressuring Notaries to cut corners or violate procedures in order to achieve time and cost efficiencies has to be eliminated from the workplace.
Mortgage professionals must support Notaries with workplace policies that clearly state the Notary will not be penalized for attempting to follow the law. Employers must understand the ethical code their Notary-employees follow and support it. It’s only natural that companies want to complete documents in the shortest time possible.
However, notarial procedures that may seem to be a nuisance can actually keep an employer out of court or worse, jail. Even if not required by state law, a properly kept Notary journal is a powerful protection against lawsuits accusing a company of negligence or misconduct, as it provides physical evidence of how a notarization was conducted.
You must follow state law, no matter who tells you otherwise. Notaries should never let anyone -- whether it is a supervisor, signer or co-worker -- convince them that violating or circumventing proper procedure is acceptable.
A properly performed notarization is one of the strongest defenses against mortgage document fraud. It is the Notary's responsibility not only to know and follow state law, but to refuse to perform any illegal or slipshod notarization, no matter who asks for it. If state laws do not clearly address an issue, Notaries should always follow recommended best practices when notarizing.
Mortgage Document Signers
Understand that properly performed notarization protects you from potential fraud and financial loss.
Obtaining a home loan is a stressful, complicated process, and many signers become frustrated if the process is delayed because a Notary asks them to personally appear and present proof of identity. While proper notarization of loan documents may take more time, it also protects the signer from possible mortgage fraud and identity theft. Signers can help Notaries do their job properly by understanding the role of Notaries and working with the Notary to ensure the transaction is completed lawfully and ethically.
If there is a clear lesson to be learned from this crisis, it is that we cannot compromise essential protections for our most important transactions. We must work together to develop a strong, ethical workplace culture for notarization that fully complies with state laws and best practices. By doing so, the mortgage industry will not only take important steps to shield itself from the type of staggering losses seen in 2010, but also to rebuild public trust in the mortgage process itself.
Michael Robinson is the External Communications Director for the National Notary Association, the leader in best practices, training, and advocacy for the nation’s 4.8 million Notaries.