Loan Application Signings vs. RESPA Signings

​Loan Application vs RESPA Signings

There are threads on social media discussing that we as Notary Signing Agents are not to be “doing” loan applications.  It appears that a Signing Company told a notary that another notary got in trouble for conducting a Loan Application. That is correct, we are not supposed to be taking a loan application because we do not have an originator's license. (Title V of P.L. 110-289, the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”)

There is a big difference between taking a loan application and doing a RESPA signing (which is what most of us are being asked to do). 

Loan Application; is the part where the loan originator gathers all the information needed from the borrowers in order to get the file into underwriting. The originator will ask the borrower everything that is on that 1003 loan application, enter it into their software system, and upload the credit report to show liabilities, discuss loan products, interest rates, and payment information with the borrower. The loan originator will then most likely upload all this information into some sort of underwriting software that is used by the lender and that in turn will generate a list of items the borrowers need to provide to the loan originator and underwriter in order for the file to close. The originator will then print out the RESPA documents that are to be signed by the borrowers. These RESPA documents are time sensitive as they need to be signed within 3 business days from credit being pulled. 

RESPA signing; is where we (Notaries) come in. The loan originator will ask us to conduct the RESPA signing. We are not notarizing, or  taking a loan application as that has already been done by the loan originator (not the notarizing part)  We are just watching the borrowers sign their RESPA documents and gather up the documents such as bank statements, pay stubs, divorce decree, W-2s, tax returns, insurance information, homeowner's association information, letters of explanation, etc. Whatever underwriting software told the loan officer that would be needed in order to approve the loan. We (Notaries) are not there to give advice, sell a product, we are simply there to watch them sign and gather up the documents needed by the loan originator to give to the underwriter.

Knowing the difference between a Loan application vs a RESPA signing is important so that as Notary Signing Agents, we can make sure we are not doing anything illegal & therefore can expand on the services we provide without worrying about Unlawful Practice of Law or worry.
 
IMO:  we (NSA/Notaries) are Independent contractors not employees, Independent Contractors NOT Loan Originators
 
http://mortgage.nationwidelicensingsystem.org/safe/Pages/default.aspx
https://www.fdic.gov/regulations/laws/rules/6500-700.html#fdic65001008.103
 
Let me facilitate the signing of the RESPA closing documents
 
Thank You