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Wednesday, November 23, 2011

Notaries at Loan Signings— Just What Are You Signing, and Why?

It’s a bit of a moving target—the constantly changing selection of forms and documents that notaries who
double as signing agents encounter in loan document packets.
Generally, such forms are drafted solely from the point of view of the lender/title company, and are meant
to address some factor that’s been found to delay or even stop the processing and funding of loans.
While the lender/title company’s need to implement problem-solving procedures or forms is
understandable, we’re disturbed by the fact that so many of these forms seem to burden the
notary/signing agent with the lion’s share of risk.
We’re observing more tasks being given to the notary/signing agent, even ones that seem more
appropriately handled by the lender/title company prior to the signing.  Worse, notary/signing agents are
themselves being asked to take various written oaths about those tasks, thus placing themselves directly
BETWEEN lenders/title companies and liability that might arise over the tasks in question.
Is that really your role?  No!  You must, therefore, learn to carefully read the various forms you’re asked
to complete and sign, and decline to sign those that make you responsible in any way that exceeds good
sense or reason.
Faced with just such an evaluation, a concerned member faxed us a copy of a “notary’s affidavit” that
has the notary swearing in writing that—among other things—the signer’s photo ID was “original” and the
signature on the signer’s photo ID “matches” the signature(s) on the document requiring notarization. In
the wake of identification verification procedures stemming from Section 326 of the Patriot Act, such
“affidavits” are now quite common.
But WHOA!  Why would anyone other than a fake ID expert or handwriting expert sign an oath containing
such statements? Yet notary/signing agents do so all the time. We’ve seen varied wording of this clause
in other documents; for example, the notary is asked to sign a statement that he/she examined the
signer’s photo ID and it “appeared to be genuine and the signature on the ID appeared to be the same
as the document signer’s.”  The language stating the ID and signature “appear” a certain way is
reasonable. In our opinion, the language stating the ID is “genuine” and the signature “matches” is not.
Another trouble spot involves the signature line of forms that notary/signing agents are directed to sign.
Always make sure the signature line accurately reflects your true identity or position. Do not sign on a
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