The NNA has learned that, according to the Minnesota Department of Commerce, most Notaries who take on loan-signing assignments are required to become licensed as a closing agent.
This situation came to light in recent weeks after a number of NSAs contacted the NNA Hotline when they received “2015 Mobile Notary Questionnaires” from the Department of Commerce, which regulates the state’s Notaries and real estate closing agents.
The Department submitted the questionnaire to mobile Notaries who listed themselves on 123Notary.com in an effort to identify and help correct issues for those who might be operating out of compliance with state law. The questionnaire specifically asked questions such as has the Notary “notarized any real estate or title document, and picked up, shipped, or otherwise handled any check or other form of payment which includes funds required to close a real property transaction.”
Closing Agent defined
Minnesota law defines a closing agent or real estate closing agent as follows: “Any person whether or not acting as an agent for a title insurance agent, a licensed attorney, real estate broker, or real estate salesperson, who for another and with or without a commission, fee, or other valuable consideration or with or without the intention or expectation of receiving a commission, fee, or other valuable consideration, directly or indirectly provides closing services incident to the sale, trade, lease, or loan of residential real estate, including drawing or assisting in drawing papers incident to the sale, trade, lease, or loan, or advertises or claims to be engaged in these activities.”
Just what constitutes “closing services” is not expressly explained in statute. However, in the view of the Department of Commerce, NSAs in the state need to be licensed because they often:
- Charge or receive fees in excess of the per-notarization fee set forth in statute;
- Explain documents to borrowers;
- Receive trust funds (e.g., a check for closing costs); and
- Advertise that they offer loan signing services.
State law lists the persons who are exempted from licensing, but the exemptions will not apply to most independent contractor NSAs.
Becoming a licensed Closing Agent
The solution for NSAs is to apply for a closing agent license in Minnesota.
To qualify, an applicant must take an eight-hour pre-licensing closing agent course approved by the Department and pay a $115 application fee and an additional processing fee charged by the online licensing system vendor, for a license expiring on June 30 every two years. You can visit their website for more information about closing agent licensing requirements.
The Department of Commerce emphasized to the NNA that it is taking a “light-handed approach” in sending out questionnaires and responding to Notaries.
The Department’s tactic is to ask Notaries who are performing closing services without a license to stop providing loan signing services or obtain a license before continuing to offer services as opposed to issuing consent orders to cease and desist.
However, the Department also emphasized that any Notary who fails to complete the questionnaire, or after taking the questionnaire fails to provide additional information to the Department within 10 days, could be subject to administrative action including, but not limited to, a maximum $10,000 civil penalty per violation.