AI-GRS Designation (Appraisal Institute)

Correct: Notary Signing Agents are bound by the Gramm-Leach-Bliley Act (GLBA) to protect the confidentiality and integrity of borrower information. When adopting new technologies like cloud storage, the agent must proactively verify that the provider uses robust encryption and meets federal and state data privacy standards. This due diligence is a professional requirement to prevent unauthorized access to sensitive financial data.

Incorrect: Testing a workflow with live borrower data before verifying security risks a data breach and violates privacy regulations. Relying on industry popularity or standard terms of service is insufficient because it does not constitute a formal review of the specific security protocols required for NPI. Furthermore, a Notary Signing Agent has an independent professional and legal obligation to protect the documents in their possession and cannot delegate this responsibility to the software provider or other parties in the transaction.

Takeaway: A Notary Signing Agent must prioritize regulatory compliance and data security over operational convenience when integrating new digital tools into their professional practice.

Correct: In many jurisdictions and according to professional best practices taught in the Loan Signing System, each notarial act must be recorded individually. This provides a clear and defensible audit trail for every document that was notarized. If a specific document’s validity is later challenged in court, a single ‘bulk’ entry may not provide sufficient evidence that the specific document in question was properly acknowledged or sworn to by the signer.

Incorrect: Consolidating entries into a single line item is a common but risky practice that fails to provide a detailed record of each specific act, potentially rendering the journal entry useless in a legal dispute over a single document. Recording only the primary documents ignores the legal requirement to document all notarial acts performed, regardless of the document’s perceived importance. Completing entries after the appointment increases the risk of inaccuracies and violates the standard of recording the act at the time it occurs, which is a requirement in many states.

Takeaway: Each notarial act should be recorded as an individual entry in the notary journal to ensure legal compliance and provide a robust defense against potential liability.

Correct: A valid US Passport is a primary form of government-issued identification. In the context of loan signings, the name on the ID must either match the documents exactly or be more inclusive (e.g., a full name instead of an initial). Since the passport is current and the driver’s license is expired, the passport is the only legally acceptable choice that ensures the signer’s identity is verified according to professional standards.

Incorrect: Accepting an expired license is a violation of notary law in almost all jurisdictions, as there is no standard 72-hour grace period for notarization purposes. Secondary forms of ID like utility bills or social security cards do not have photos and cannot validate an expired primary photo ID. Requiring an exact match for the middle initial when a more inclusive full name is provided on a valid ID is an overly restrictive interpretation of identification rules and would cause an unnecessary delay.

Takeaway: Notaries must use current, valid government-issued photo identification where the name is either an exact match or more inclusive than the name on the documents.

Correct: The best option distinguishes between ministerial duties and the practice of law. A Notary Signing Agent’s authority is limited to identifying documents and witnessing signatures. Providing an interpretation of legal consequences or explaining the execution of legal clauses like ‘Power of Sale’ constitutes the unauthorized practice of law (UPL). The correct professional response is to remain impartial and refer the borrower to the lender or an attorney for legal interpretations.

Incorrect: Providing a comprehensive overview of foreclosure timelines or statutory frameworks constitutes legal advice, which exceeds a notary’s legal authority. Characterizing a clause as ‘standard’ or ‘simplified’ to encourage a signature is an improper use of influence and provides a legal opinion on the document’s significance. Paraphrasing a third party’s legal explanation is still a violation of the notary’s limitations, as the notary is still the one delivering the legal interpretation to the borrower.

Takeaway: A Notary Signing Agent must strictly limit their role to ministerial tasks and avoid the unauthorized practice of law by refusing to interpret the legal effects of document clauses.

Correct: The Notary Signing Agent (NSA) serves as a neutral third party whose role is ministerial, not advisory. Providing an opinion on the ‘fairness’ of a loan term or interpreting the financial implications of a contract constitutes the unauthorized practice of law (UPL) and violates the core principle of impartiality. The only appropriate control is to refer the borrower to the lender or title company for any substantive questions regarding the loan terms.

Incorrect: Providing an overview of industry standards or using the Loan Estimate to justify a fee involves the NSA in the negotiation or explanation of the loan’s merits, which exceeds their legal authority. Similarly, attempting to help a borrower make an ‘informed decision’ by interpreting how different documents interact can be construed as giving legal advice, which is a violation of notary ethics and state laws.

Takeaway: A Notary Signing Agent must remain a neutral witness and refer all questions regarding the interpretation or fairness of loan terms to the lender to avoid the unauthorized practice of law.

Correct: The loan document package serves as the definitive legal and financial record of the transaction. It ensures that the loan is legally enforceable through documents like the Promissory Note and Deed of Trust, and that it complies with federal regulations such as the Truth in Lending Act (TILA), which requires the Right to Cancel notice for certain refinances. Furthermore, a complete and accurate package is required for the lender to sell the loan on the secondary market to entities like Fannie Mae or Freddie Mac, as missing documents render the loan ‘unsalable.’

Incorrect: The suggestion that the package is a temporary set of instructions is incorrect because these are permanent legal records intended for long-term enforcement and compliance. The idea that the package is a marketing portfolio is incorrect as its primary function is legal and regulatory, not promotional. The claim that the documents are non-binding or can be modified after signing is incorrect because loan documents are legally binding contracts once executed, and any modifications would typically require a formal re-signing or an amendment process.

Takeaway: A complete loan document package is essential for ensuring legal enforceability, regulatory compliance, and the ability to sell the loan on the secondary market.

Correct: A valid, unexpired government-issued photo ID, such as a U.S. Passport, is a primary and acceptable form of identification for loan signings. In notary practice, the name on the identification must be consistent with the name on the documents; having more information on the ID (a full middle name) than what is on the document (a middle initial) is generally acceptable, whereas having less information on the ID than the document would be a cause for rejection.

Incorrect: Using an expired driver’s license is a violation of standard notary law and lender requirements, which strictly require unexpired identification to prevent fraud. Non-photo identification like utility bills cannot substitute for government-issued photo ID in the context of identifying a signer. A signature affidavit with witnesses is a procedure typically reserved for ‘credible witness’ scenarios where the signer has no acceptable ID at all, not as a supplement for using an expired document when a valid passport is available.

Takeaway: Notary signing agents must always use unexpired, government-issued photo identification and ensure the name on the ID is consistent with or more complete than the name on the loan documents.

Correct: A credible witness must be impartial and disinterested in the transaction. Because the listing agent stands to gain a commission from the successful closing of the loan, they have a financial interest that disqualifies them from serving as a credible witness to verify the borrower’s identity.

Correct: Under the Gramm-Leach-Bliley Act (GLBA) and professional standards for Notary Signing Agents, protecting Non-Public Personal Information (NPPI) is mandatory. This includes ensuring that digital workflows use end-to-end encryption and that no residual data is left on personal hardware or insecure cloud platforms, as the NSA is responsible for the data while it is in their possession.

Incorrect: Setting a folder to private is insufficient because public cloud providers may still have access to the data, and a 72-hour delay in deletion is a significant security window (Option B). The NSA cannot delegate their duty of care to a software provider (Option C). General risk disclosures do not exempt the NSA from the legal requirement to use secure, industry-standard methods for handling sensitive financial information (Option D).

Takeaway: Notary Signing Agents must maintain the confidentiality and security of borrower data by using encrypted digital workflows and ensuring no PII remains on personal devices.

Correct: The Identification Affidavit is a sworn statement where the borrower affirms their identity and any name variations used in the past or present. The Notary Signing Agent’s critical role is to verify the signer’s identity according to state law and ensure the document is executed exactly as prepared by the lender or title company. Signing exactly as typed is a standard requirement for loan documents to ensure they are legally binding and match the lender’s records for the transaction.

Incorrect: Omitting signatures for variations can lead to the document being rejected by the lender’s underwriting department, as these aliases are often pulled from credit reports. Modifying printed names on legal documents without explicit authorization from the title company or lender is generally prohibited and can invalidate the document. Verbal confirmation is insufficient for a sworn affidavit, which requires a written signature and often a jurat or acknowledgment to be legally effective.

Takeaway: Precise execution of the Identification Affidavit, including signing exactly as typed and verifying identity against state-approved identification, is essential for document integrity and loan funding.