Lifting the Veil On the Loan Signing Industry
Lifting the Veil on the Loan Signing Industry
By Oliver The Notary Nerd, Founder & Lead Mentor, Lions Den Notary Training
Let's be direct. The notary industry, particularly the world of the Loan Signing Agent, has transformed. What was once a straightforward professional service has exploded into a heavily marketed, often misleading, "get rich quick" opportunity. As the founder of a mentorship program grounded in Texas law, I feel it's my duty to lift the veil on this trend, expose the bad practices, and anchor you back to the one thing that will guarantee your success and longevity: unwavering adherence to your state's notary laws.
The Gold Rush: How Loan Signings Became a Marketing Machine
The boom in the real estate market, coupled with historically low interest rates in recent years, created an unprecedented demand for mortgage closings. This surge gave rise to the modern Loan Signing Agent. Signing services scaled up to meet the demand from title companies, and a new cottage industry of "gurus" and training programs emerged, many promising six-figure incomes and an easy path to success.
The core message was simple and enticing: learn the loan documents, and you can make hundreds of dollars per signing. While the opportunity is real, this marketing push created a dangerous side effect: it shifted the focus from legal compliance to transactional speed and volume. The notary's role as a public officer—a gatekeeper against fraud—was often overshadowed by their role as a closer of deals.
Troubling Trends and Bad Practices: The Underbelly of the Industry
This shift has led to troubling trends and outright bad practices that put notaries, signers, and the integrity of the entire process at risk.
The Unlawful ID Request: One of the most common and dangerous instructions a notary receives from a signing service is the request to obtain a copy of the signer's ID. As documented in a report by the National Notary Association, this practice is rampant. Signing services often claim it's for the title company's file, but this request puts the notary in direct violation of the law in states like Texas. Texas Administrative Code (TAC) Title 1, Chapter 87.50 strictly prohibits a notary from recording an ID number in their journal. Taking a photo or making a copy captures this prohibited information and more. Your duty is to view the ID, not to become an unauthorized collector of a signer's most sensitive data.
The "Guru" Who Bends the Rules: The internet is filled with self-proclaimed notary "gurus" who offer advice that is often unethical or illegal. I have personally seen training where a guru instructed new notaries who were "donating" their first few services to signing services to still record a fee in their journal, even though they were never paid. This is a falsification of a public record. Another common piece of bad advice is to simply "get the loan signed no matter what," encouraging notaries to overlook potential red flags of coercion or a signer's lack of awareness.
Pressure from Title Companies and Signing Services: A report from the American Association of Notaries highlighted instances where notaries felt pressured by both signing services and title companies to backdate documents or proceed with a signing even when the signer was not fully coherent. This pressure to "just get it done" places the notary in a terrible position: risk losing a client or risk losing your commission and facing legal action.
Your Shield and Your Sword: State Notary Law
Why has this happened? Because the focus has shifted from the notarial act to the loan package. The industry has pushed the idea that knowing the documents is more important than knowing the law.
This is fundamentally backward. Your authority does not come from your knowledge of a Deed of Trust; it comes from your commission as a public officer. Your primary duty is not to the title company or the signing service, but to the laws of your state.
Adhering strictly to your state's notary laws is your best defense. When a signing service asks for a copy of an ID, your response is not a matter of opinion; it's a matter of law. When you are pressured to proceed with a questionable signing, your refusal is backed by your legal duty to assess the signer's awareness and willingness.
Where is Fraud Most Common in the Notary Industry?
While the loan signing industry has its issues with bad practices, the most significant and damaging fraud in the notary world is almost always connected to real estate transactions, particularly deed fraud and mortgage fraud.
The FBI has consistently warned that mortgage fraud is a major threat, and a compromised or fraudulent notarization is often a key component. This can happen in several ways:
A notary is complicit in a fraudulent scheme.
A notary is negligent, failing to properly identify a signer who is an imposter.
A criminal forges a notary's seal on a fraudulent deed to make it appear legitimate.
This is precisely why your role as a gatekeeper is so critical. The simple, "boring" acts of verifying identity, completing your journal, and assessing a signer's capacity are the most powerful tools we have to combat the most prevalent and costly forms of fraud in our industry.
The allure of a high-paying loan signing is strong, but it will never be worth more than your integrity and your commission. The true path to success is not in bending the rules to please a client, but in becoming an unshakeable expert in the laws of your state. That is the Lions Den way.
The industry is full of traps, but you don't have to navigate it alone. To ensure your signings are always compliant, download our FREE Lions Den Notary Checklist. It's the exact tool our elite notaries use to protect their commission on every signing."
The Link: This text would link directly to your "Free Notary Checklist" funnel page.
https://lionsdenmobilenotary.com/lionsdenservices_tx-page
