NSA Ethics and Best Practices 3 — Questions and Answers
Question 1: Which scenario represents a direct financial interest that would disqualify an NSA from performing a notarization?
- The NSA is paid a per-appointment fee by the signing service
- The NSA owns stock in the title insurance company issuing the title policy (Correct answer)
- The NSA drives more than 30 miles to reach the signing
- The NSA previously notarized a document for the same borrower
Correct answer: The NSA owns stock in the title insurance company issuing the title policy
Owning a financial stake in a party to the transaction creates a direct conflict of interest that disqualifies the notary.
Question 2: A borrower refuses to sign the Right of Rescission (ROR) notice, claiming they don't need it. What should the NSA do?
- Proceed without the ROR signature since it is not technically a notarized document
- Explain the ROR is required by federal law and contact the lender if the borrower still refuses (Correct answer)
- Remove the ROR from the package and return it unsigned
- Sign the ROR on behalf of the borrower with their permission
Correct answer: Explain the ROR is required by federal law and contact the lender if the borrower still refuses
The ROR is federally mandated and the NSA must inform the borrower and escalate to the lender rather than skip or alter the document.
Question 3: How should an NSA handle a situation where a document contains a blank that should have been filled in before the signing appointment?
- Fill in the blank based on context from other documents in the package
- Ask the borrower what the blank should say and fill it in
- Leave it blank and have the borrower initial next to it
- Refuse to notarize that document and contact the hiring party immediately (Correct answer)
Correct answer: Refuse to notarize that document and contact the hiring party immediately
NSAs must never complete blanks in documents; they should stop and contact the hiring party to obtain a corrected document.
Question 4: Which practice best protects an NSA from accusations of notarial misconduct?
- Keeping a detailed notary journal recording every notarial act (Correct answer)
- Retaining copies of all loan documents for five years
- Photographing the signer at each appointment
- Using a digital seal instead of a physical embosser
Correct answer: Keeping a detailed notary journal recording every notarial act
A thorough notary journal is the primary contemporaneous record that defends the NSA against allegations of improper conduct.
Question 5: A lender instructs the NSA to notarize a borrower's signature on a document even though the borrower did not sign in the NSA's presence. What must the NSA do?
- Comply since the lender bears ultimate responsibility for the closing
- Notarize it and note 'signature acknowledged by phone' in the journal
- Refuse because personal appearance is a fundamental requirement (Correct answer)
- Ask the borrower to send a photo of themselves signing as confirmation
Correct answer: Refuse because personal appearance is a fundamental requirement
Personal appearance before the notary at the time of notarization is a foundational legal requirement that cannot be waived by any party.
Question 6: Why is it important for an NSA to screen signers for mental competency before proceeding?
- To satisfy the lender's underwriting checklist
- To ensure the signer understands the transaction enough to give knowing, voluntary consent (Correct answer)
- To comply with RESPA Section 8 requirements
- To verify the signer qualifies for the loan terms offered
Correct answer: To ensure the signer understands the transaction enough to give knowing, voluntary consent
A signer must be mentally aware and capable of understanding what they are signing for the notarial act to be valid.
Question 7: An NSA is asked by a signing service to pre-notarize blank signature lines before delivering documents to the borrower. What is the correct response?
- Agree only if the signing service provides written authorization
- Decline, as notarizing a document before the signer appears is illegal (Correct answer)
- Comply if the appointment is scheduled within 24 hours
- Ask the title company whether this practice is acceptable in this state
Correct answer: Decline, as notarizing a document before the signer appears is illegal
Pre-notarization is fraud in every jurisdiction because the notary must witness or acknowledge the actual act of signing.
NSA Ethics and Best Practices 3
Which scenario represents a direct financial interest that would disqualify an NSA from performing a notarization?