Notary Public vs Loan Signing Agent: Key Differences and Responsibilities

Notaries public and loan signing agents both play important roles in handling legal documents, but they serve different purposes. As interest in the loan signing agent profession grows it’s important to understand the key distinctions between these two positions.

In this comprehensive guide we’ll break down the differences between notaries public and loan signing agents including their duties, training requirements, and risks. Whether you’re interested in becoming a notary public or loan signing agent, read on to learn which path is right for you!

What is a Notary Public?

A notary public is an official appointed by the state to perform certain legal formalities Their main role is to deter fraud and confirm identities and document authenticity

The most common notarial acts include:

• Witnessing signatures on documents: The notary ensures signatures are made willingly and by the person claiming to sign.

• Administering oaths and affirmations: A notary can administer oaths for affidavits, depositions, and other legal declarations.

• Certifying copy validity: Notaries can verify that a photocopy matches the original.

• Verifying document authenticity: They can confirm a document is valid and unaltered.

Notaries do not provide legal advice – they simply confirm identities and document legitimacy. Applicants must meet their state’s requirements to become commissioned notaries.

What is a Loan Signing Agent?

A loan signing agent (LSA) is a specialized notary who handles mortgage loan documents. Their main role is to facilitate loan signings for lenders and title companies.

Typical loan signing agent responsibilities include:

• Verifying identities of signers

• Explaining loan documents to borrowers

• Witnessing all signatures

• Ensuring documents are completed properly

• Delivering signed loan packages on time

Though similar, a key difference is that loan signing agents focus solely on loan transactions rather than general notarial services.

Key Differences

While notaries public and loan signing agents both perform notarizations, there are some notable differences:

Training and Qualifications

• Notaries: Must meet state requirements (age, residency, exam, etc.). Training is not required but recommended.

• Loan signing agents: Must have an active notary commission. Additional training, exam, and background screening are recommended.

Document Expertise

• Notaries: Can notarize any document type. Don’t need specific document knowledge.

• Loan signing agents: Specialize in mortgage documents. Expected to explain loan terms to borrowers.

Insurance Needs

• Notaries: E&O insurance usually not required by state. Recommended minimum is $10,000.

• Loan signing agents: E&O coverage of at least $25,000 is strongly recommended.

Income Potential

• Notaries: Typically charge $2-$10 per signature. Income depends on document volume.

• Loan signing agents: Earn $75-$200 per loan signing appointment.

Legal Liability

• Notaries: Moderate liability. Damages often limited by state laws.

• Loan signing agents: High liability. Errors could result in major financial damages.

Becoming a Notary Public

Every state has its own requirements to become a notary public. Common steps include:

• Being 18+ years old

• Passing a background check

• Having no felonies

• Being a state resident

• Taking a notary education course (optional)

• Passing a notary exam

• Purchasing a notary bond

• Filing an application and paying fees

The approval process takes 1-3 months. Once commissioned, notaries can perform notarizations statewide for 3-10 years depending on state law. They must follow all notarial rules and procedures in their state notary handbook.

Notaries should also consider supplemental insurance, a notary journal, and taking continuing education classes. Joining a professional notary association provides invaluable training, resources, and support as well.

Becoming a Loan Signing Agent

To become a loan signing agent, you must first be a commissioned notary in your state. Additional recommended steps include:

• Taking a loan signing agent training course

• Passing a loan signing agent exam

• Undergoing a background screening

• Purchasing a $25,000 E&O insurance policy

• Buying loan signing supplies (journal, printer, etc.)

• Promoting your services to signing services and lenders

Proper training and preparations help ensure you can confidently handle the signing process. Loan signing agents should also understand real estate terms and mortgage regulations.

Ongoing education, professional memberships, and background check renewals are also encouraged to stay current and competitive.

Which Path is Right For You?

When deciding between becoming a notary or loan signing agent, consider your skills, interests, and career goals.

Notaries have lower barriers to entry and a broader client base. It’s a great flexible side business for those seeking minimal training and part-time income.

In contrast, loan signing agents require specialized expertise but earn higher pay and gain exposure to the real estate industry. It’s ideal for notaries seeking full-time work with substantial training.

Both paths allow you to grow a rewarding business in your community. Weigh the pros and cons and educational requirements to choose the best fit for your needs and interests.

With proper preparations, you can find success as a notary public or loan signing agent. These officials play critical roles in validating identities, preventing fraud, and facilitating complex transactions. Consider this guide when deciding if you’re ready to pursue either notarial career path.