I'm often asked, “What is the difference between an escrow state and an attorney state as it relates to notary signing agents?”
But before I can answer that, let’s first define the difference between an escrow state and attorney state or also known as a no-escrow state.
Frankly, there are probably more complex answers than the one you're about to receive, but I'm going to make it simple as it relates to being a notary loan signing agent.
In an escrow state, an escrow company directs the closing of a real estate transaction. Whether that be between a buyer and seller or a lender and borrower, the escrow company is the third neutral party playing quarterback to the transaction. Since the escrow company controls many factors of the closing, the escrow company chooses who they outsource various aspects of the closing process (including the loan document signing process and which notary signing agent to use).
In an attorney state, an attorney facilitates the closing and either acts as the third neutral party or represents the buyer or seller. However what really differentiates the attorney from the escrow company is that a large portion of the closing process is handled in-house.
So what does that mean for notary signing agents?
In escrow states, 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, loan signings are not as prevalent in attorney states as they are in escrow states.
However, there are some cases where a third party loan signing agent could be used in attorney states.
But before I get there, always be sure to check with your state’s laws as it relates to loan signings before you accept and perform a loan signing. There are a number of rules to follow established and monitored by the Secretary of State and State Bar (the State Bar is the professional body of lawyers). This blog should not be construed as legal advice.
As an example, in attorney states, a loan signing agent could 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 or is visiting New York.
This is where signing up with as many signing agent databases is helpful in getting loan signings in attorney estates. You should create 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 signings. Again, always check with your state for their particular rules. Here’s a resource from the NNA on the specifics from state to state.
Needless to say, 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 signed every year. And you only need 13 signings a week at $150 each to be a six figure signing agent.
If you are a 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)
So what does this mean for you as a loan signing agent?
If you are in a non-attorney state (or an escrow state), then you could be a busy loan signing agent. Still confirm that signing agents are used in your state, but chances are you could be a busy 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 be sure how signings are handled. It's possible that you could still assist in the process. And sign up for every signing service available since that's how notaries for out-of-county or out-of-state loan signings are found!
About the Author
Mark has been an active professional loan signing agent for nearly 15 years. He owns a loan signing service that does thousands of signings a year. He is the course instructor of the top rated Loan Signing System agent training course.