Notaries are taking to social media to ask many questions about the new mortgage standards announced this week. Here are answers to some of the most common ones.
People are saying you must be an NNA member to meet these new standards. Is this true?
No. NNA membership is not required for becoming a Certified Signing Specialist. Further, becoming an NNA member is completely separate from our background screening and exam.
The five Standards are: Adhering to the Certified Signing Specialist Code of Conduct, using a signing script, obtaining an annual background screening, maintaining a $25,000 errors and omissions insurance policy and passing the annual exam.
Will there be continuing classes that need to be paid for, and is there any other testing that will be required?
You will not be required to go through training in order to take the exam. The NNA and other providers will go through the Signing Professionals Workgroup’s verification process once it’s established to provide SPW-approved course materials that you can use to study.
The Standards include an annual exam in order to qualify for the Certified Signing Specialist designation. The details have not yet been finalized by the SPW, but the exam will include questions about loan signing documents, best practices from the new Code of Conduct, privacy issues and other topics. It does not include specific state laws. The exam will be updated every year by the SPW to reflect changes in the industry and federal regulations.
I have been told by local Title Companies that come January 2014 they will only accept background checks done by NNA?
The SPW will be approving multiple vendors to provide certification and background screening for Notaries. Each lender and title company can choose whatever background screening vendor(s) it wants to work with. Their freedom to choose means that some lenders may only accept background screenings from certain vendors, or they may accept a background check from any vendor that meets all of the searches in federal, state and local records, as recommended by the Certified Signing Specialist Standards.
As a Notary in the state of California, every four years I’m required to get a background check already. If I understand correctly, this will require testing and background checks every year. A two-year program sounds more realistic.
Many lenders and title companies are now asking Notaries for an annual background screening to help protect their customers’ privacy and ensure companies can trust the qualifications of the Notaries sent to customers’ homes for loan document signings. An annual background screening also is required to become a Certified Signing Specialist under the Standards established.
California is one of a handful of states that currently have a background screening requirement for Notary applicants. But lenders and title companies do not have access to state background checks. In addition, the state checks do not screen for many elements that are recommended under the Standards. Further, state-required background checks are only run when you apply for or renew your commission.
Due to audits by federal regulators, lenders must use vendors that can provide verification of a Notary’s background check and that all relevant records have been searched.
Why are the Standards necessary and how did they come about?
The Standards came about largely due to the passage in 2010 of the federal Dodd-Frank Act and its creation of a new federal agency — the Consumer Financial Protection Bureau (CFPB) — with sweeping powers to regulate various types of financial companies.
In April 2012 the CFPB published a Bulletin under the heading, “Service Providers,” that prompted executives at several of the top lenders and title underwriters to start addressing what happens at the signing table. The Bulletin noted that financial institutions are responsible for ensuring their service providers follow the law. Because a service provider that fails to uphold the law can harm consumers, lenders are being held accountable for the actions of their outside contractors, such as title companies and whoever they hire — including Signing Specialists.
The CFPB Bulletin told lenders to:
- Verify that their service providers comply with federal law
- Maintain “appropriate training and oversight of employees or agents”
- Establish ongoing monitoring programs and put in place enforceable consequences for providers who fall short and fail to quickly address shortcomings
In response to federal initiatives, major lenders and title companies came together as a committee called the Signing Professionals Workgroup. The members sought out advice from the NNA to create industry best-practice standards to ensure that Notaries Public hired to perform mortgage loan signings meet the qualifications of nearly every firm in the real estate finance industry; that borrowers have an improved and more consistent customer experience; and to comply with federal regulations regarding service providers.
For questions regarding your specific situation or account, email firstname.lastname@example.org or call toll free 855-762-5415.