NSA Loan Documents and Procedures 3 — Questions and Answers
Question 1: Before beginning a loan signing appointment, what is the first thing an NSA should verify about the borrower?
- Their credit score
- Their identity using a current government-issued photo ID (Correct answer)
- That they have homeowner's insurance
- Their employment status
Correct answer: Their identity using a current government-issued photo ID
Verifying the signer's identity with a valid, government-issued photo ID is the NSA's primary duty before any documents are signed.
Question 2: An NSA arrives at a signing and the borrower says they need to make a correction to a dollar amount on the Closing Disclosure. What should the NSA do?
- Cross out the number and write in the correct amount
- Allow the borrower to initial the change and proceed
- Contact the lender or signing service for instruction before altering any document (Correct answer)
- Refuse to proceed and reschedule the appointment
Correct answer: Contact the lender or signing service for instruction before altering any document
NSAs must never alter loan documents on their own; any corrections require authorization from the lender or title/escrow company.
Question 3: What does it mean when a loan package is described as 'dry funding'?
- The loan funds before documents are signed
- Funds are disbursed only after documents are reviewed and approved post-closing (Correct answer)
- The borrower pays closing costs without an escrow account
- The closing occurs without a title company present
Correct answer: Funds are disbursed only after documents are reviewed and approved post-closing
In a dry funding state, the lender reviews signed documents before releasing funds, meaning money is not available on the day of signing.
Question 4: Which of the following best describes a 'wet funding' closing?
- Funds are disbursed on the same day documents are signed (Correct answer)
- The closing takes place near a body of water
- Funds are held in escrow for 3 business days after signing
- The borrower's attorney must be present for disbursement
Correct answer: Funds are disbursed on the same day documents are signed
In wet funding states, loan funds are disbursed on the same day the loan documents are signed and notarized.
Question 5: What should an NSA do if a borrower refuses to sign the Right of Rescission notice?
- Skip the document and proceed with other signatures
- Explain its purpose and contact the lender or signing service for guidance (Correct answer)
- Sign as witness on the borrower's behalf
- Complete the closing without that document and note it in the return package
Correct answer: Explain its purpose and contact the lender or signing service for guidance
The NSA should explain the document's purpose and immediately notify the lender or signing service, as the rescission notice is legally required.
Question 6: After a loan signing is complete, documents should be returned to the title or escrow company in what manner?
- Via regular US mail at the lowest available postage
- According to the specific shipping instructions provided by the hiring party (Correct answer)
- Held by the NSA for 30 days before delivery
- Scanned and emailed, with originals shredded
Correct answer: According to the specific shipping instructions provided by the hiring party
NSAs must follow the exact return shipping instructions provided by the lender, title, or signing service, typically using an overnight carrier.
Question 7: When a borrower asks the NSA to explain whether they should accept the loan terms, the NSA should:
- Provide a full breakdown of the interest rate and monthly payment
- Recommend the borrower consult a financial advisor and decline to advise (Correct answer)
- Compare the terms to current market rates
- Tell the borrower the terms look standard and proceed
Correct answer: Recommend the borrower consult a financial advisor and decline to advise
NSAs are prohibited from giving legal or financial advice; they should refer borrowers to their lender, attorney, or financial advisor for such questions.
NSA Loan Documents and Procedures 3
Before beginning a loan signing appointment, what is the first thing an NSA should verify about the borrower?