NSA - Notary Signing Agent Preventing Unauthorized Practice of Law Questions and Answers

Question 1

A married couple signing a Deed of Trust asks the Notary Signing Agent, "We're listed as 'community property,' but our friend said we should be 'joint tenants.' What is the legal difference and which one is better for us?" What is the appropriate response from the NSA?

Accepted Answer

Explain that they cannot give legal advice and must direct the question to their lender, title company, or an attorney.

Answer

Provide a brief, factual definition of both community property and joint tenancy so they can decide for themselves.

Answer

Advise them that community property is the standard and most common vesting for married couples in their state.

Answer

Suggest they cross out 'community property,' write in 'joint tenants,' and initial the change on the document.

Question 2

Which of the following actions by a Notary Signing Agent constitutes the unauthorized practice of law (UPL)?

Accepted Answer

Advising a borrower that waiving their three-day right to cancel would be a good idea to expedite the loan funding.

Answer

Stating, "This is the Closing Disclosure, which summarizes your final loan terms and closing costs."

Answer

Pointing to a signature line and saying, "Your signature is required here."

Answer

Referring a borrower's question about a specific fee to their loan officer.

Question 3

During a signing, a borrower points to the prepayment penalty clause in the Promissory Note and asks, "Can you help me understand what this means for me financially if I sell my home in two years?" What is the NSA's most appropriate course of action?

Accepted Answer

State that they cannot interpret loan terms and advise the borrower to contact their loan officer for an explanation.

Answer

Read the clause aloud word-for-word without offering any interpretation.

Answer

Explain that such clauses are very common and usually only apply for the first few years of the loan.

Answer

Calculate a hypothetical penalty based on the loan amount to illustrate the clause's effect.

Question 4

A document in the loan package contains a blank line where the borrower is expected to write in a date, but the instructions are unclear. The borrower asks the NSA what date they should use. How should the NSA proceed?

Accepted Answer

Instruct the borrower to stop and contact their lender or the title company to get the correct information.

Answer

Advise the borrower to use the current date since that is the most common practice.

Answer

Tell the borrower to leave the line blank so the title company can complete it later.

Answer

Suggest looking at other documents in the package to find a date that seems appropriate.

Question 5

To avoid engaging in the unauthorized practice of law, a Notary Signing Agent must refrain from which of the following activities?

Accepted Answer

Expressing a personal opinion on whether the loan's interest rate is fair.

Answer

Verifying the signer's identity using a government-issued photo ID.

Answer

Ensuring the borrower dates the document with the actual date of the signing.

Answer

Attaching the correct notarial certificate as required by state law.

Question 6

Which of the following statements is an acceptable practice for a Notary Signing Agent and would NOT be considered the unauthorized practice of law?

Accepted Answer

Naming the document and stating its general purpose, such as, "This is the Deed of Trust, which secures the loan with the property as collateral."

Answer

Defining the legal term 'encumbrance' for a borrower who asks for its meaning.

Answer

Recommending that the borrowers add a trust amendment before signing.

Answer

Assisting the borrower in deciding whether to initial or decline an optional credit insurance agreement.