NSA Legal & Ethical Standards 2 — Questions and Answers
Question 1: A borrower asks the NSA to notarize a document without the borrower being physically present. What must the NSA do?
- Notarize it if the borrower signs via video call
- Refuse unless the state specifically authorizes Remote Online Notarization (RON) (Correct answer)
- Proceed if the title company approves
- Notarize it as long as the borrower's identity can be verified by phone
Correct answer: Refuse unless the state specifically authorizes Remote Online Notarization (RON)
Traditional notarization requires personal appearance; RON is only permitted in states that have enacted enabling legislation.
Question 2: Which federal law most directly governs the handling of nonpublic personal information obtained during a loan closing?
- Truth in Lending Act (TILA)
- Gramm-Leach-Bliley Act (GLBA) (Correct answer)
- Real Estate Settlement Procedures Act (RESPA)
- Fair Credit Reporting Act (FCRA)
Correct answer: Gramm-Leach-Bliley Act (GLBA)
The Gramm-Leach-Bliley Act requires financial institutions—and service providers like NSAs—to protect consumers' nonpublic personal information.
Question 3: An NSA discovers mid-signing that the loan APR disclosed in the Truth-in-Lending statement differs from the rate the borrower expected. The NSA should:
- Correct the figure and initial the change
- Advise the borrower to sign and dispute later
- Stop the signing and contact the lender or title company for guidance (Correct answer)
- Explain the discrepancy and continue if the borrower agrees
Correct answer: Stop the signing and contact the lender or title company for guidance
An NSA must not alter documents; when a material discrepancy is found, the proper step is to halt and notify the responsible party.
Question 4: Under the NNA Code of Professional Responsibility, an NSA must avoid any action that creates a conflict of interest. Which scenario represents a conflict of interest?
- Accepting a signing fee from the title company
- Owning stock in the lender whose loans you close (Correct answer)
- Working for multiple signing services in the same state
- Traveling more than 50 miles to a signing appointment
Correct answer: Owning stock in the lender whose loans you close
Owning a financial stake in a lender creates a direct conflict because the NSA could benefit from completing the signing regardless of borrower concerns.
Question 5: A borrower who is deaf requests that a family member interpret during the notarization. The NSA should:
- Refuse the family member to maintain impartiality
- Allow it and note the interpreter's presence in the journal (Correct answer)
- Require a certified court interpreter only
- Delay the signing until a professional interpreter is arranged
Correct answer: Allow it and note the interpreter's presence in the journal
An NSA may allow a voluntary interpreter while recording the interpreter's presence in the notarial journal to document the circumstances.
Question 6: What is the primary reason NSAs are prohibited from giving legal advice about loan documents?
- It would create liability for the title company
- Providing legal advice without a license constitutes unauthorized practice of law (UPL) (Correct answer)
- Federal regulations prohibit it under RESPA
- It could delay the closing and cost the lender money
Correct answer: Providing legal advice without a license constitutes unauthorized practice of law (UPL)
Explaining the legal effect of a document or recommending a course of action crosses into legal advice, which is UPL for non-attorneys.
Question 7: An NSA signs a notarial certificate stating the borrower personally appeared and was identified, but the borrower actually appeared via RON in a non-RON state. This constitutes:
- A minor procedural error correctable by re-notarization
- Notarial misconduct and potentially false certification (Correct answer)
- An acceptable accommodation if the lender authorized it
- A RESPA violation only
Correct answer: Notarial misconduct and potentially false certification
Falsely certifying personal appearance when it did not legally occur is notarial misconduct and can constitute a criminal false statement.
NSA Legal & Ethical Standards 2
A borrower asks the NSA to notarize a document without the borrower being physically present.
What must the NSA do?