By Mark Wills - Course Instructor of Loan Signing System, Forbes Real Estate Council Member, and Best Selling Author
I'm often asked, “What is the difference between an escrow state and an attorney state as it relates to notary loan signing agents?”
But before I can answer that, let’s first define the difference between an escrow state and attorney state (also known as a 'no-escrow' state).
Put simply, in an escrow state, an escrow company directs the closing of a real estate transaction. Whether it be between a buyer and seller or a lender and borrower, the escrow company is the neutral third party playing quarterback to the transaction.
One of the many duties of the escrow company in a real estate transaction is choosing where to outsource various components of the closing process — including the loan document signing appointment and which notary loan signing agent to hire for it.
In an attorney state, an attorney takes the place of the escrow company. It is an attorney who facilitates the closing process and either acts as the third neutral party or represents the buyer or seller. However, the main difference between the attorney and the escrow company is that a large portion of the closing process is handled in-house.
So what does that mean for notary loan signing agents?...
Notary Signing Agents Are Utilized More in Escrow States
In escrow states, a neutral third-party loan signing agent is hired for mortgage closings.
In attorney states, attorneys handle the loan document signing process in-house. And because of this, notary loan signings are not as prevalent in attorney states as they are in escrow states.
However, there are some cases where third party loan signing agents are used in attorney states.
But before I explain, be sure to check your state's laws regarding the loan signing process before you accept and perform a loan signing. There are numerous rules in place that are monitored by each state's respective Secretary of State and State Bar (the State Bar is a professional body of lawyers) to uphold the integrity and legality of loan signings across the nation. And as always, this blog should not be construed as legal advice.
Now, onto scenarios in which a notary loan signing agent can be used for a loan signing appointment in an attorney state.
A notary loan signing agent can be used for a signing if the property is located in an escrow state. For instance, if you are a loan signing agent in New York (an attorney state) it’s possible to be called upon to notarize a set of loan documents for a property located in California (an escrow state) if the borrower resides in or is visiting New York.
This is why signing up with as many signing agent databases is helpful for getting loan signing appointments in attorney estates. I recommend creating profiles in databases such as Notaryrotary, Snapdocs, 123notary, Notary Cafe, and Notary Resume to get signings such as this example.
There are also some states where an attorney simply needs to be present while the signing agent completes the notarization, giving signing agents another route to landing appointments in attorney states. Again, always check with your state to see which particular rules apply where you live. Here’s a resource from the NNA on the specifics from state to state.
Ultimately, the volume of loan signings performed by a notary loan signing agent is significantly higher in escrow states than in attorney states.
In any given escrow state, there could be thousands or even millions of loans that need to be closed (and documents signed) every year — and you only need 13 of those loan signing appointments a week at $150 each to be a six figure signing agent.
If you are a notary loan signing agent in an attorney state, be sure to check with your Secretary of State, local attorneys, and your own professional counsel to see how they handle loan signings.
Below is a chart of escrow versus attorney states (source: First American Title)
Are You In An Attorney State?
So What Does This Mean For You As A Loan Signing Agent?
If you're in a non-attorney state (or an escrow state), there is opportunity for you to be a busy loan signing agent with the right training.
If you're in an attorney state, be sure to check with your Secretary of State, local attorneys, and your personal counsel to learn how signings are handled in your area. It's certainly possible that you could assist in the mortgage closing process. And don't forget to sign up for every signing service available because remember — that's how notary signing agents for out-of-state loan signing appointments are found!
I'm Mark, I teach Loan Signing System, and I can teach you how to make money as a notary loan signing agent no matter where you live!