Editor’s Note: This is the second in an ongoing series of commentaries analyzing the individual Guiding Principles of the Notary Signing Agent Code of Conduct, released by the Signing Professionals Workgroup in October 2013. Get a better understanding of the new Signing Agent code by reading the first in this series of articles.
Guiding Principle 2 of the Notary Signing Agent Code of Conduct focuses on the importance of notarization in a mortgage loan or real property transaction.
The first three Standards of this Principle underscore the central function of notarization: identification of the signers. The Notary Signing Agent must exercise a high degree of care in verifying the identity of signing parties and reasonable care when performing other notarial duties (1.1). This is not to depreciate the tasks of affixing a seal (2.4, 2.5), recording a journal entry (2.6), safekeeping both the seal and journal (2.8), and legibly completing and imprinting the seal on the notarial certificate (2.9). Nor does it imply that a Signing Agent should perform these responsibilities less carefully. Rather, the contrast emphasizes the true significance of the identification function in preventing forgeries — the single greatest threat to lenders, borrowers and property owners in real property transactions.
The next two Standards illustrate this high degree of care. The Signing Agent will accept only valid, state-approved identification credentials and will not accept an unauthorized credential in order to expedite the closing of the transaction or for any other reason (2.2). In cases in which the names appearing on a borrower’s identification do not match the name on the borrower’s loan documents, the Signing Agent will only proceed if the discrepancy can be reconciled by examining written identification carefully or by the oaths of credible witnesses, if allowed by law.
The Code promotes use of a Notary seal and journal (2.4 and 2.6), even by a Notary Signing Agent who operates in a state or jurisdiction where a seal and journal are not required by law. In a matter related to journals, the Code also requires the Signing Agent to complete a Notarial Evidence Form (2.7) as required by a lender, title company or contracting company. The Notarial Evidence Form is a business record of all notarizations performed in a loan or real property transaction (see the Definitions). It is not the same as a journal record. While the Notarial Evidence Form is created by the Signing Agent, it is then returned to the lender or closing agent along with the signed documents. Lenders rely on the form to comply with government or meet their own business practices.
Standard 2.10 directs the Notary Signing Agent to complete all notarial certificates in the presence of the signing parties. The signers deserve the opportunity to witness the Signing Agent notarize their closing documents in person and be assured that when the appointment is over all documents for their transaction have been properly signed and notarized.
Guiding Principle 2 also urges the Notary Signing Agent to follow all industry best practices in notarizing closing documents. However, as Standard of Practice 2.12 points out, if a particular practice is not required by state law (for example, a journal thumbprint), the Signing Agent will not refuse to perform a notarial act if a signing party refuses to comply with the practice.
In devoting one of ten Guiding Principles in the Code to notarization, the Signing Professionals Workgroup clearly recognizes notarization to be a Notary Signing Agent’s single most important duty. However, while notarization is one of ten Guiding Principles, it is only one of ten. The Signing Agent's duties cannot be reduced to notarization. The remaining Guiding Principles will bear this out.
Bill Anderson is Vice President of Government Affairs with the National Notary Association.