Editor’s Note: This is the third in an ongoing series of commentaries analyzing the individual Guiding Principles of the Certified Signing Specialist™ Code of Conduct, released by the Signing Professionals Workgroup in October 2013. Get a better understanding of the new signing specialist code by reading the first and second in this series of articles.
Guiding Principle 3 of the Certified Signing Specialist Code of Conduct reads: “The Certified Signing Specialist will remain impartial to the transaction at all times.”
As a Notary Public, a Certified Signing Specialist must be a neutral third party witness. However, since the Specialist is also called to observe the signing of documents at the signing table that are not notarized (for example, the Note and rescission document), the Specialist’s impartiality has a much wider scope. This is why the Code devotes an entire Guiding Principle to it.
Here’s why a Certified Signing Specialist’s impartiality matters: Lenders providing the loan and investors purchasing the loan in the secondary market later have to be confident that the correct borrower was present at the signing table, signed the documents and made any acknowledgments and oaths necessary to consummate the loan. The parties must trust the Specialist to represent that these formalities actually took place. They will trust the Specialist only if he or she remains impartial in the process and is not complicit in any illegal or suspicious activity surrounding the transaction (seeGuiding Principle 5 on the latter).
Any Certified Signing Specialist who follows the Standards of Practice in Guiding Principle 3 will be credible. Standard 3.1 requires the Specialist not to act professionally in any transaction in which he or she is involved personally. Being a direct party or having a spouse who is a direct party disqualifies a Specialist from providing signing services because this involvement undermines or destroys the Specialist’s impartiality.
The Code also says that a Certified Signing Specialist cannot act if the Specialist or the Specialist’s close relative is indirectly involved. For example, if the Specialist or Specialist’s brother provided part of the down payment for a borrower as a gift, the Codeprohibits the Specialist from providing signing services for the borrower’s loan.
Standard 3.2
Standard 3.2 applies the same principle to a Specialist’s professional interests. With the prospect of a sales commission looming large, a real estate agent naturally wants the transaction to close quickly and without incident. If the Certified Specialist were also a real estate agent in the transaction, it would certainly color the quality of signing services the Specialist provides at the signing table.
Standards 3.3, 3.4 and 3.5
Standards 3.3 and 3.4 address two other potentially conflicting situations. The Specialist will not serve both as the attorney in fact for a borrower and the Signing Specialist for the loan because it would be highly improper for the Specialist to notarize his or signature as attorney in fact. While some would argue there is no conflict when a Specialist serves as both a Notary Public and witness to the execution of a mortgage, the Code draws a line in the sand. It is better to refrain from performing signing services than even raise the appearance of or a potential for a conflict of interest (Standard of Practice 3.5).
Standards 3.6 and 3.7
Finally, Standards of Practice 3.6 and 3.7 unequivocally prohibit offering personal opinions or recommendations to signers. Recommending the exercise of a borrower’s rescission option is specifically mentioned. This anticipates the fuller discussion ofGuiding Principle 4’s Standards on offering unauthorized advice or services that will be the topic of our next Code commentary article. However, it also fits here because any Certified Signing Specialist who offers opinions has become invested in, and is no longer independent of, the transaction.
Bill Anderson is Vice President of Legislative Affairs with the National Notary Association