NOTARY CLOSINGS, A BAD CONCEPT!
Notary closings are usually performed in refinance transactions. Your lender will send all the closing documents to a Notary Public (Notary Service) who will schedule a time to come meet you and have you sign the documents. It sounds simple, convenient and there are no attorney’s fees. That’s a win, win, win…right? Wrong.
FIRST, a notary public cannot “legally” explain the documents to you or answer any questions you may have about the documents. If they do, they are practicing law without a license.
SECOND, in order for the mortgage to be properly executed, it must be witnessed by two disinterested witnesses and notarized. The notary can serve as one of the witnesses, but who will be the other witness? It can’t be a minor or family member as, most of the time, they are not disinterested. Is the notary bringing someone? Are you going to call your neighbor over to witness? (Remember, they are supposed to actually see you sign the document) Or, is the notary going to bring it home and have some unsuspecting stranger sign it in violation of the law?
THIRD, everyone you have dealt with in the loan approval process works for the lender. If you go through with a notary closing, the notary works for the lender also. You have not had anyone work for you throughout the process. Doesn’t that in and of itself concern you? It should.
FOURTH, one of the big selling points of a notary closing is “no attorney’s fees.” That is true, there are no attorney’s fees, however, the several notary closings I have reviewed after the closing had already taken place had charged other fees that don’t normally appear on my closings. Therefore, you may not be paying any attorney’s fees, but you are probably paying more in other fees than you would have paid if you did pay an attorney.
FINALLY, what exactly is the notary doing for the closing? Are they just doing the signing? Are they disbursing or authorizing disbursement of funds? Are they providing a title policy of insurance to the bank? If they are doing any of these, are they insured for these services? (usually they are not) Are they actually following through on their responsibilities? What requires them to follow through on their responsibilities when they have no liability? They may also have all your confidential information and have no legal obligation to keep that information confidential.
As real estate attorneys, our office maintains the proper insurances. You hire us to represent you (and many times the bank simultaneously) and therefore, we are going to make sure you understand what you are signing. The title companies monitor all of the title agents’ issuance of title policies, remittance of premiums and annually audit their real estate trust accounts. You are in a much better position than with a notary and probably for less money.
“When results matter, experience counts”