National Mortgage Professional Magazine April 2014
The Leadership Issue: A Look Inside Visionary Organizations
ortgage Finance Industry The duties of a notary l The signer must appear in person before the notary at the time of the notarization. This is necessary in Taken together, these elements of notarization protect the interests of all parties to a transaction. By providing a layer of trustworthiness to mortgage transactions, notaries provide value to lenders and others. In the current regulatory environment, financial institutions and the thirdparty vendors they hire are required to protect consumers, and they can be hit with steep penalties for any lapses. Because there is so much documentation involved with a single mortgage, it’s all the more important to make sure that it is handled properly. Given the involvement of notaries in the lifecycle of a single mortgage, by performing their duties correctly every time—and keeping a proper record of it—they help ensure the integrity of the loan and any transaction involving it. Many people in the industry, however, don’t fully understand the role of a notary and often expect them to do things that they cannot legally do. It can be a particularly difficult situation if the request is coming from the notary’s supervisor or a regular client. Among other things, Notaries cannot: l Skip any of the elements of the notarization, including personal appearance and proper identification. This undermines the whole purpose of the notarial act. l Backdate the notarial certificate. The notarial certificate verifies that a notarization took place on a particular date. By backdating, the notary commits false certification, a crime in most jurisdictions. l Determine the notarial act. Determining whether an acknowledgment or jurat is needed is a legal decision that is against the law unless the Notary also is a licensed attorney. l Offer advice or explanations about the loan documents. This generally falls outside the Notary’s expertise and could constitute the unauthorized practice of law. continued on page 79 with QM ((A-t-R) A-t-R) A C Count ount o on nC Calyx alyx 41 Compliant Compliant • Efficient Efficient • Reliable Reliable • Affordable Aff ffo ordable F or m ore tthan ears, For more han 20 yyears, tthe he preferred preffer e red loan loan o origination rigination p platform latform 800.362.2599 email@example.com www.calyxsoftware.com ww w.calyxsoftware.com n National Mortgage Professional Magazine n APRIL 2014 By definition, a “Notary Public” is a stateappointed official who serves as an impartial witness to the signing of important documents. In that role, notaries are considered “ministerial” officials, meaning that they are expected to perform their duties according to the procedures laid down by their state’s laws and regulations without exercising significant personal discretion. Most people think of a notarization as a ubiquitous act, as in, “I need to get this notarized.” But there are different types of notarial acts, and each has a specific purpose. The two most common types are acknowledgments and jurats. In taking a signer’s acknowledgment, a notary verifies the authenticity of the signature on a document. In performing a jurat, a notary verifies that an individual has sworn or affirmed the truth of a particular statement. Both notarial acts are authorized by law in all U.S. jurisdictions. There are essential elements common to each notarial act: order to complete other essential elements. l The notary must positively identify the signer. The whole point of a notarial act is to verify that a specific individual signed a document or asserted the truth of a statement. l The notary must determine the signature is the signer’s free and voluntary act. Certain jurisdictions require the notary to ascertain the awareness or competence of the signer. l The notary should keep a clear and complete record of every notarial act. NationalMortgageProfessional.com attention to the signing ceremony involving notary signing agents and borrowers at the closing table. In part, this has been driven by regulations from the Consumer Financial Protection Bureau and other government agencies. It also is driven by the desire to improve the overall customer service experience. A special committee called the Signing Professionals Workgroup (SPW), comprised of executives from major lenders and title companies, came together in late 2012 to review the role of notaries. With representatives of the National Notary Association serving as advisors, the SPW met throughout much of 2013 to develop best practice standards for the independent Notaries who take on loan signing assignments. In October 2013, the SPW published the Certified Signing Specialist Standards that include a Code of Conduct; a standardized script to use as a guide at loan signings; annual background screenings; an annual exam; and a recommended minimum level of Notary errors and omissions insurance. Notaries who meet the SPW Standards will earn the Certified Signing Specialist designation. Since late 2013, the SPW has been developing procedures for implementing the certification program. The point of the SPW Standards is to provide lenders and title companies with broadly acceptable best practices that can provide a consistent closing experience for all of the parties involved in the mortgage transaction.