By Kelle Shillaci
(Originally published in the May 2013 issue of The National Notary magazine)
Notary Signing Agent fees — always a prime concern for Notaries and Notary Signing Agents across the country — have become the topic of a wider, national debate in recent years, with borrowers in a number of states filing court actions claiming they were overcharged for Notary services during loan closings. Despite the persistent legal haggling over payment, a recent class action case was shut down in a California appeals court, reaffirming the right of title companies, escrow offices and signing services to pay Notary Signing Agents a flat fee for notarial and non-notarial services rendered during loan signings.
In the recent California case (Hutton v. Fidelity), a disgruntled homeowner's claim that the title company charged an excessive Notary fee for services rendered during the processing of a refinance loan package blossomed into a years-long legal battle. The borrower maintained that Fidelity National Title, who had hired the Notary, had charged $75 for performing notarizations for acknowledgments on two documents — an amount the plaintiff claimed was a violation of California law limiting Notaries to a $10 fee per signature.
The Court of Appeals of California upheld the trial court's initial decision to dismiss the case, ruling that non-notarial services connected to the signing, such as printing and couriering documents, were not governed under California's Notary fee statute. Furthermore, evidence in the Notary's journal proved critical in illustrating to the court that each notarization had been properly logged, along with the legally permissible maximum fee of $10 per acknowledgment. The court further affirmed that the additional portion of the $75 fee was for additional services provided by the Notary.
Similar cases have also been filed in Alabama, Georgia and North Carolina. With Notary fees under attack both in the courtroom and, in many cases, the court of public opinion, it's never been more crucial for Signing Agents to take protective steps when it comes to determining fees, tracking and recording all Notary transactions in their Notary journals, pursuing the proper channels when it comes to collecting fees, and adhering to Notary best practices at all times. These strategies and safeguards are the Notary's best line of defense for protecting oneself against legal suits.
Step One: Understanding Signing Agent Fees
In a typical mortgage loan signing, the lion's share of an NSA's fee is for performing mostly non-notarial services — printing the loan package, driving to and from the appointment, following instructions to obtain signatures on documents, most of which do not require notarization, and couriering documents to the shipper. NSAs perform these valuable services as "Signing Agents" and not as "Notaries." Understanding that NSAs provide "loan signing services" is an important distinction both the California trial and appellate court grasped in rendering their verdicts in the case.
Step Two: Determining — Or Agreeing Upon — Your Fees
Generally, when you accept a loan closing assignment, you are working directly with an escrow company or title company, not the borrower. The company hiring you is the one who typically determines your fee per loan package, usually offered as a lump sum. In contrast, most Notary fee statutes assume the Notary is performing notarial services for, and being paid by, the signer directly.
It is up to the individual Notary to decide if the amount offered by the contracting company is acceptable, or if they want to negotiate a higher fee. Before committing to a job, factor all of the costs, including travel time, photocopying, or other business expenses, to ensure appropriate compensation.
Fees will vary between companies, so do your research before agreeing to a work order, using Internet searches or seeking advice from Notary colleagues who have worked with the company. (Note: The NNA's LinkedIn discussion threads are a valuable place to reach out to other NSAs nationwide for their input.) Does the company have a good reputation in the industry? Are they known for paying Notaries in a timely fashion? Once you have agreed to work for a company, they are the only ones with whom you should discuss your fee or payment — never the borrower.
In rare cases where it is up to you to determine how much you charge for your services, carefully factor your fee based on the standard fee for a notarization in your state plus the costs of any additional services or travel expenditures related to the signing. Communicate these costs clearly to your signer, or whoever has hired you for your services, and receive an explicit agreement in writing before agreeing to and performing the notarization.
Step Three: Maintaining And Safeguarding Your Journal
As the California case illustrates, a Notary's journal provides clear evidence indicating each notarial act performed, and the actual fees collected — it was this critical paper trail that provided the best defense against the plaintiff's claims. Should you ever be called to testify in a court hearing, your best protection against liability is a well-organized and properly maintained journal. Whether or not your state requires one, keeping a record of each notarization and fee illustrates that you charged the appropriate and legal amount. Also, be sure to store all completed Notary journals in a secure location. In the California case discussed above, the notarial transactions in question dated back several years prior to the legal action, and the Notary had kept all journals as required by law and was able to quickly prove that the proper fees had been collected and no laws were broken.
Step Four: Don't Go After The Borrower
One of the biggest — and potentially lawbreaking — mistakes a Notary can make is to go after the borrower for payment on fees that were established by a title or escrow company. The only entity with which you should ever discuss payment is the one that offered you the job, generally the title company or signing service. Pursuing the borrower for loan signing fees could be a violation of the federal Real Estate Settlement Procedures Act (RESPA), which prohibits certain service providers, such as NSAs, from charging unlawful fees. Assume that in most cases, borrowers have already been charged by the company; therefore, if you go after them for additional payment, you could actually be breaking the law.
Notary Signing Agents provide a valuable and professional service to both contracting companies and borrowers. As Notaries, they help authenticate critical transactions, and as Signing Agents, they ease the burden for escrow officers. As the battle over fees continues to be waged in the courtroom, NSAs nationwide should continue to focus on best practices and performing their critical role with due diligence.