NNA Loan Signing Agent Procedures 2 — Questions and Answers
Question 1: Under TILA, which type of loan typically gives the borrower a three-business-day right of rescission?
- A purchase-money mortgage on a new primary home
- A refinance of the borrower's primary residence with a new lender (Correct answer)
- A loan to buy a vacation home
- A commercial loan secured by an office building
Correct answer: A refinance of the borrower's primary residence with a new lender
Rescission applies to non-purchase loans secured by a primary residence, such as refinances with a new lender and HELOCs.
Question 2: When counting the three-business-day rescission period, which days are excluded?
- Saturdays and Sundays
- Only federal holidays
- Sundays and federal legal public holidays (Correct answer)
- Saturdays, Sundays, and state holidays
Correct answer: Sundays and federal legal public holidays
For rescission purposes, business days include Saturdays but exclude Sundays and federal legal public holidays.
Question 3: A borrower asks the signing agent whether a lower interest rate would be available elsewhere. What should the agent do?
- Give a personal opinion based on current market rates
- Refer the borrower to the lender or loan officer (Correct answer)
- Advise the borrower to postpone signing
- Call another lender to compare rates
Correct answer: Refer the borrower to the lender or loan officer
Signing agents cannot give financial or legal advice and must refer loan-term questions to the lender.
Question 4: Which loan document is typically signed but NOT notarized?
- Deed of trust
- Promissory note (Correct answer)
- Signature/name affidavit
- Quitclaim deed
Correct answer: Promissory note
The promissory note is the borrower's promise to repay and normally requires only a signature, not notarization.
Question 5: How many copies of the Notice of Right to Cancel must each person entitled to rescind receive under Regulation Z?
- One
- Two (Correct answer)
- Three
- One per household
Correct answer: Two
Regulation Z requires that each consumer with the right to rescind receive two copies of the notice.
Question 6: A borrower's ID shows 'Robert J. Smith' but the loan documents print 'Robert James Smith.' What is the best course of action?
- Have him sign exactly as the documents print if ID supports that name under state law, or contact the hiring company (Correct answer)
- Cross out the printed name and write the ID name
- Refuse the signing outright
- Let him sign any variation he prefers
Correct answer: Have him sign exactly as the documents print if ID supports that name under state law, or contact the hiring company
The signer should sign as the name appears on the documents only when the ID adequately supports it; otherwise the agent contacts the hiring company.
Question 7: What is the primary purpose of a Compliance Agreement (Errors and Omissions/Compliance) in a loan package?
- To waive the right of rescission
- To have the borrower agree to cooperate in correcting clerical errors in loan documents (Correct answer)
- To certify the notary's commission is valid
- To authorize the lender to change the interest rate
Correct answer: To have the borrower agree to cooperate in correcting clerical errors in loan documents
Borrowers agree to sign corrected documents if clerical errors or omissions are later discovered.
NNA Loan Signing Agent Procedures 2
Under TILA, which type of loan typically gives the borrower a three-business-day right of rescission?