Editor’s Note: This is the fourth 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.
Guiding Principle 4 of the Notary Signing Agent Code of Conduct reads: “The Notary Signing Agent will not provide legal, personal, financial or other advice or services to the signer in connection with a signing assignment nor explain the terms of any closing document presented to the signer.”
As Notaries Public, most Signing Agents know that state laws generally prohibit non-attorneys from engaging in the unauthorized practice of law. This means a Signing Agent may not draft documents and provide legal advice (Standard 4.1), unless of course he or she is a licensed attorney.
Since a Notary Signing Agent also is called to be impartial (Guiding Principle 3), the Signing Agent must remain above the transaction and not offer personal advice of any kind to document signers about the loan or transaction. This might happen if the signer asked the Signing Agent for an opinion about the signer’s mortgage broker or interest rate (Standard 4.8).
Standard 4.2 requires a Notary Signing Agent to clearly inform the signer that his or her role in providing signing services precludes answering the signer’s specific questions about the closing documents. This disclosure is best communicated at the outset of the signing appointment before the process of signing documents begins, although many Signing Agents also make it a point to tell the signer during the phone call to confirm the signing appointment.
The Code’s Standards of Practice outline five specific areas that are off-limits for explanations: the borrower’s loan terms (Standard 4.5); the signer’s closing costs(Standard 4.6); the exact funding or disbursement date, if not identified in a particular document presented to the signer (Standard 4.7); loan products, which include specific loan programs (such as a Home Affordable Refinance Program or HARP loan); and mortgage loan professionals.
The Code does allow Notary Signing Agents to describe a signer’s loan terms and closing costs in a general way. For example, a Notary Signing Agent could say, “The Annual Percentage Rate (APR) is a rate that includes the interest rate and costs of the loan factored into a yearly rate that you can use to shop for loans with other lenders.” However, the Signing Agent could not say, “Your APR is comprised of the following costs…” and then proceed to itemize the specific costs of the signer’s loan that make up the APR. The Signing Agent also may respond to a signer’s specific question by identifying a document in the closing package with the information and having the signer read it (Standard 4.3).
In presenting documents, Standard 4.4 requires a Notary Signing Agent to follow a signing script provided by the contracting company. This script provides language Signing Agents can use to explain the general purpose of the documents in such a way that does not constitute unauthorized advice. The Signing Agent may also identify the number of pages in the document and indicate how it is to be initialed, dated or signed.
Since a Notary Signing Agent may not provide advice nor explain documents, it is imperative that the Signing Agent knows to whom he or she may turn when a signer asks for an answer to a specific question. Standard 4.9 places the onus on the Signing Agent to have the contact information of the lender’s representative and closing agent at hand before documents are signed, and Standard 4.10 requires the Signing Agent to disclose this contact information to the signer.
Bill Anderson is Vice President of Government Affairs with the National Notary Association.
For a better understanding of the new Signing Agent code, read other commentaries in this series of articles.
The Notary Signing Agent Code of Conduct: Guiding Principle 1
The Notary Signing Agent Code of Conduct: Guiding Principle 2
Notary Signing Agent Code of Conduct: Guiding Principle 3