NSA - Notary Signing Agent Conducting a Loan Signing Questions and Answers 1 — Questions and Answers
Question 1: During a loan signing, the borrower asks for your opinion on their interest rate. According to the Notary Signing Agent Code of Conduct, what is the appropriate response?
- Provide a general opinion that the rate seems competitive for the current market.
- Explain that you are prohibited from offering any personal or financial advice and should refer them to their loan officer. (Correct answer)
- Suggest they research current interest rates online after the signing is complete.
- Review the Note with them and point out the section detailing the interest rate without further comment.
Correct answer: Explain that you are prohibited from offering any personal or financial advice and should refer them to their loan officer.
Guiding Principle 4 of the NSA Code of Conduct explicitly states that a signing agent must not provide legal, personal, or financial advice. Offering an opinion on an interest rate falls under this prohibition. The correct action is to decline to answer, state your role's limitations, and direct the borrower to the appropriate professional, such as their loan officer.
Question 2: You are preparing for a signing appointment and notice the date on the Deed of Trust is four days in the future. What is the correct course of action?
- Proceed to the signing and have the borrowers sign and date with the current date.
- Contact the borrower to reschedule the appointment for the date shown on the documents.
- Cross out the future date, write in the current date, and have the borrowers initial the change.
- Immediately contact the contracting company to report the post-dated document and ask for instructions. (Correct answer)
Correct answer: Immediately contact the contracting company to report the post-dated document and ask for instructions.
Signing post-dated documents, especially key ones like a Deed of Trust or Note, is a serious error. The signing agent must never proceed with a signing if critical documents are dated in the future. The proper protocol is to halt the process and immediately contact the hiring party (lender, title company, or signing service) for guidance on how to resolve the discrepancy before meeting with the signer.
Question 3: Which of the following is a primary responsibility of the Notary Signing Agent when presenting the USA PATRIOT Act Form to a borrower?
- Notarize the borrower's signature on the form using an acknowledgment certificate.
- Explain the history and legislative intent of the USA PATRIOT Act.
- Accurately record the details from the borrower's identification documents onto the form. (Correct answer)
- Ensure the borrower obtains two forms of government-issued photo ID for the signing.
Correct answer: Accurately record the details from the borrower's identification documents onto the form.
The purpose of the USA PATRIOT Act Form in a loan package is for the lender to verify the identity of the borrower to prevent illegal financial activities. The Notary Signing Agent's role is to act as the lender's representative to properly identify the borrower and accurately transcribe the identification information (type of ID, ID number, expiration date, etc.) onto the form. This form is typically not notarized.
Question 4: A borrower is hesitant to sign the Deed of Trust because they don't understand its purpose. As the Notary Signing Agent, how should you proceed?
- Advise the borrower that this document is standard and required for all mortgage loans.
- Explain that the Deed of Trust gives the lender the right to foreclose if they default on the loan.
- State, "This is the Deed of Trust; it secures the loan with the property as collateral," and point to the signature line. (Correct answer)
- Pause the signing and immediately call the borrower's loan officer to provide a detailed explanation.
Correct answer: State, "This is the Deed of Trust; it secures the loan with the property as collateral," and point to the signature line.
A Notary Signing Agent can describe a document but cannot explain its legal implications or provide advice. The best practice is to state the document's title and its general purpose in neutral terms, then direct the signer to the place for their signature. This approach avoids the unauthorized practice of law while still guiding the signing process. If the borrower still has questions, the NSA should then offer to contact the loan officer.
Question 5: After completing a loan signing, you are reviewing the documents before leaving the table. Which of the following potential errors should be your highest priority to check for and correct?
- The borrower used blue ink instead of the requested black ink on a non-notarized form.
- A missing signature or incorrect date on the Notice of Right to Cancel. (Correct answer)
- The borrower's signature is slightly different from their ID but consistent throughout the package.
- The venue on a notarial certificate lists the city instead of the county.
Correct answer: A missing signature or incorrect date on the Notice of Right to Cancel.
The Notice of Right to Cancel (RTC) is a time-sensitive and critical document in refinance transactions. An error in the signature or, most importantly, the date, can invalidate the rescission period, causing significant funding delays and legal issues. While all errors should be avoided, a mistake on the RTC is one of the most consequential.
Question 6: When conducting a loan signing for a property held in a trust, how should the borrower's signature appear on the documents?
- Exactly as their name appears on their driver's license.
- The name of the trust, followed by the borrower's signature.
- The borrower's name, followed by the title 'Trustee'. (Correct answer)
- The borrower should sign their name and also print the name of the trust next to it.
Correct answer: The borrower's name, followed by the title 'Trustee'.
When a property is held in a trust, the individual is not signing in their personal capacity but as a representative of the trust. Therefore, their signature must reflect their legal title, which is 'Trustee'. The correct format is the individual's name followed by their title, for example, "Mary E. Smith, Trustee." Signing without the 'Trustee' title can create legal issues with the document's validity.
NSA - Notary Signing Agent Conducting a Loan Signing Questions and Answers 1
During a loan signing, the borrower asks for your opinion on their interest rate.
According to the Notary Signing Agent Code of Conduct, what is the appropriate response?