The Difference Between a Loan Signing Agent and Notary Public

There are nearly 4.4 million notaries in the United States and many of them are also loan signing agents. But how do they differ? Here is everything you need to know.

What is a loan signing agent?

Notaries and loan signing agents (LSAs) provide essential services for legal transactions. A loan signing agent notarizes and certifies financial and legal documentation related to loan documents. A notary is a public officer who is certified to witness and confirm the signing of documents. Whenever a contract crosses a desk, the need for a notary probably isn’t far behind. Here’s a few examples of documents in various industries that often require a notary:

• Financial services: deeds, loans, mortgage closing documents, auto title transfers
• Legal services: custody agreements, wills, trust, power of attorney, affidavits
• Business services: employee contracts, leases, construction agreements

What is the difference between a loan signing agent and a notary public?

All signing agents are notaries — but not all notaries are loan signing agents. Becoming an LSA requires additional certification and training. The job of a notary is fairly limited in scope, so they stamp a wide variety of paperwork. LSAs, on the other hand, are trained to process loan documents. The mortgage and financial services industries tend to involve more complicated and sensitive transactions, which is where the expertise of an LSA becomes valuable.

Like a notary, LSAs may not offer legal advice, clarification of terms, or interpretation of the documents they assist with. They are simply brought in at the final stages of the loan to assist with document handling and processing. And because LSAs receive access to private financial information about borrowers, they are required to undergo background checks on an annual basis. This prevents mortgage fraud and helps keep consumers’ information secure. In addition to these periodic background checks, LSAs are trained to process loan document packages. This involves printing loan documents correctly, using a mailing service to return signed documents, and following any additional instructions required by the lender or title company.

How loan signing agents can take notarization online

As face-to-face services waned during the pandemic (and interest rates dropped to historic levels), demand increased in the real estate market and so did the demand for remote online notarization (RON). According to an ALTA survey, RON transactions increased 547% in 2020 compared to 2019. Moving past lockdowns, it looks like online notarization is here to stay as more and more states pass laws authorizing RON.

Notaries and LSAs who are authorized to perform RON transactions often meet with borrowers using a secure, all-in-one digital platform where everything — from sign-on to signatures — happens digitally. Nixing printers and in-person meetings doesn't just save time and paper; it makes for a more efficient, secure, and error-proof closing process. 

Kelly Cooper Spencer, COO of Thrive Mortgage, speaks to the benefits of RON first-hand: “eClosings provide unparalleled efficiencies in funding. There are almost no cleanups or corrections; we can see when all the documents are signed; and it’s a consistent, improved process on the back end.” Here’s what that looks like:

• Greater efficiency: RON allows borrowers to close loans from their living room, mitigating frustration and delays. It makes notarization more accessible to people who lack adequate transportation, live in remote areas, have non-traditional work schedules, or have health issues that make travel difficult.

• Enhanced security: Manually reviewing a photo ID or passport isn’t 100%  reliable. Humans make mistakes, and identity fraud is a threat. RON adds a layer of protection by using the latest verification technologies (like knowledge-based authentication) and verification from third-party databases.

• Reduced errors: Nothing’s worse than a “d’oh!” mistake. An overlooked initial box costs time, money, and frustration. When a RON transaction is processed in a certified platform, missed fields are flagged in the system in real-time.

Now that you understand the intricacies of notaries, LSAs, and RON, you’re just a click away from a better loan signing experience. Platforms like Notarize℠ supply the secure technology, best practices and support for seamless, online notary services.