The process of acquiring a home loan is exciting and the closing is the moment that everyone looks forward to. The closings of yesteryear, however, traditionally took place with an attorney present to provide for a witness to the signature and the witness of the loan documents at large.
While an attorney is the traditional and more commonly used facilitator of the signature, is he/she really necessary and what, in fact, does the attorney do for the closing?
In most cases there is not a structured answer to that question as each closing in different. However, as we view the attorney’s part in the typical signing, we see a reason to look at another alternative for your signings as well, that being the Notary Public or Loan Signing Agent.
For the most part the attorney affords little more than a feeling of security about what we’ve signed. With the charges being significantly more than that of the notary, we feel somehow that we’ve done the best thing by virtue of the fact that a licensed attorney charged us a bundle to accomplish the task.
Did he/she do it any better or more safely than the notary could have?
The answer to that is probably not.
In nearly every state for the past twenty years, notaries have served as signing agents in real estate closings. A notary offering to service these loan closings are able to do so as a lower cost alternative for customers.
Today many notaries are specifically trained in the Real Estate closing process, whether it is as a title agent, a real estate agent, a loan officer or Loan Signing Agent; and they are certified by the states in which they live, or by a licensing agency. Although some states do not require this education, the majority of notaries that choose to work in this field will take the educational classes available through reputable organizations such as the National Notary Association or the American Society of Notaries.
Is a notary signing appropriate for your closing? That depends on the legislation in your state as to whether or not you may use a third party, or Notary Public to witness your closing.
Legislation varies so widely from state to state that the legalities of a notary helping to facilitate your loan closing will also vary in different states. Certain state laws stipulate that closings must be performed only in the presence of a licensed escrow agent while other states, such as Maryland and Illinois, require a notary to be a licensed title agent. Still other State’s legislation unequivocally requires that only an attorney may attend a signing of this nature.
After some research into the statutes of the states that legislate that only an attorney may perform real estate loan closings, we find that Georgia, Massachusetts, West Virginia and Delaware have no restrictions listed under the notary laws. However, in South Carolina the law specifically states that a notary cannot witness the signing of real estate loan documents. Then in Connecticut & South Dakota there is conflict and speculation as to whether it is strictly attorney or not.
One point that needs to be made in view of the legislation in those states that are providing for attorney-only attended signings is that very few attorneys actually attend the signings personally as many of them view a signing or closing to be a small and unimportant detail. They simply don’t believe it worth their time to attend, though they are paid very well. In a lot of cases, the attorney will send a junior member of his/her staff to attend the signing, and to do the closing. This person is not necessarily an attorney; it could be their paralegal, secretary, or even a notary they have hired just for this purpose. Then, once the signed paperwork is presented to their office, the attorney will sign off on it as if they were in attendance at the actual signing.
These attendees the attorney sends may not even have any understanding or training in real estate or loan signings and are most probably far less qualified than the Notary that has specifically trained to become a loan signing agent.
By and large, there seems to be a significant lack o turkey citizenship by real estate investment f guidance from the varying and diverse state laws and no real continuity from state to state with regards to what is and is not legal to permit the notary to do. An example of this is that in Florida it is legal for a notary to perform marriages, where in Tennessee this would be considered illegal. As with housing, each state has its own laws regarding the closings, yet the actual events do not differ greatly from state to state.
When a notary seeks out legislation that will provide for their attendance or a valid and viable description of their duties, very often it is not found; and what little legislation is found often lies hidden within some other aspect of the law. In those states which do provide for lawyer-only real estate loan closings, it seems that the actual laws are in fact a court’s decision, which of course was attended to by a judge and attorney and could in fact be looked upon as self-serving at best.
In reality, in each state that was examined which permitted the use of notary publics to close real estate loans, the complaints were minimal in comparison. The service was well liked and respected and the cost was nominal compared to that of an attorney.
In light of this and the fact that closings and signings are truly common and often witnessed in many states with minimal difficulties by mobile notaries or notary publics, it certainly appears to be in your best interests to use a notary if your state legislation provides for the use of one in a loan signing.
To discover if your state allows for notary signings, check with your loan officer. He or she will be able to answer the questions as to whether it is available in your state. Please note: This article is not meant to be construed as legal advice. Check with your own state’s laws regarding loan document closing requirements.