The True Cost of a Notary Signing Error

Many notaries think that a signing error is no big deal that can be easily fixed by going out to the borrower’s house again. After all, if the signing mistake is fixed, everything is great, right? Think again!

When a notary forgets to acknowledge a document, or collect an additional form of ID from the borrower, or print a legal size page on letter sized paper, the costs to the lender and signing agency are significant.

Let’s go through a common scenario where a notary error occurs and then backtrack to compute the true cost of the error. Let’s say that a notary doesn’t get all the signatures required from the borrower on a specific document, and that document also has to be notarized. The notary then ships the completed docs back to the lender.

The lender receives the completed loan package and a processor begins to review each document. When the omission is identified, it is flagged in the system and an internal compliance team is notified, or the signing vendor is notified directly. The signing company gets in touch with the notary to fix the document in question. The document is fixed and the original is shipped back, but not before the lender has to send out a new shipping label (Estimated Cost: $15-$20).

While is is going on, the signing company is tracking the issue, logging updates, communicating with the borrower, notary, and lender (Estimated Cost: $5). At the lender, there may be up to three people involved in emails regarding this issue (Estimated Cost: $5). Each mistake like this chips off a little piece of the signing companies trust and goodwill with the lender (Estimated Cost: $5). If enough of these mistakes occur, the lender will stop using the signing company altogether resulting in a total loss of revenue. So each notary signing error carries with it an inestimable amount of potential loss.

As you can see from the scenario above, time is money and shipping costs money. Notary signing vendors have a duty to carry out a signing correctly the first time around, to prevent these hidden costs of a signing mistake.

How long can it take to get paid for a loan signing?

We understand it can be frustrating to not get paid in a reasonable time frame. After all, we as a signing company have to wait for payment by the lender in order to disburse funds to our notary vendors. Notary agents working with Signing Stream can expect to wait up to 45 days for payment due to the major lenders and title companies we work with. Our goal is to reduce your payment time frame to within 30 days.

It may take only two weeks after your loan signing to receive payment from a title company if you are contacted directly. However, if you conduct a document signing on behalf of a large mortgage lender, you could be waiting upwards of 60 days for payment. It’s a tradeoff because a smaller title firm contacting you would not have the volume and ongoing work a large mortgage lender can offer.

Large lenders tend to use nationwide signing companies to handle their document signings. Because of this B2B business relationship, the signing company must, in most cases, invoice the lender for payment. Invoicing can be a time consuming effort, and is usually done once or twice a month. After a signing company invoices the lender, it could take one to four weeks to get paid. Some lenders insist on paying on the 30th day of Net30 payment terms.

After receiving payment, it can take a signing company one week to disburse payment to the hundreds or thousands of notaries included in that lump sum payment from the lender.

Let’s back track for a moment to see how long this whole process can take for a hypothetical signing. Assume a notary handles a closing on May 5 for a signing company that has to invoice the lender once per month. The entire month of May has to pass before the lender can be invoice. So on June 1, the lender can be invoiced for all work in May including this signing in our example.

Just to make this an average scenario, let’s say the lender pays this invoice after three weeks (21 days), or June 22. The signing company has to receive and deposit payment and wait for funds to clear, which could mean 3 days plus another 2-3 days if no holds are placed on deposited funds. After that, it could take an additional week to go through all of the individual notary disbursements included in this single lender payment. After this notary payment goes out, it can take 3 to 5 business days until finally, somewhere around July 5, the notary receives payment.

This example shows how a notary could be waiting up to two months, what seems like an eternity, to get paid for a signing. To a notary not well aware of this process, it may seem like the signing company is delaying payments for whatever reason, when the signing company is really just a intermediary of this “invoice for payment” and Net30 process. The lender’s payment procedures in most cases are the real culprit causing notary payment delays.

The upside of accepting this common scenario in the current and highly consolidated lending industry is the potential for a high volume of signing assignments. If a loan signing agent can afford to wait for payment, many signing appointments can follow. It’s also important to note that notaries should only work for signing companies that have organized and efficient accounting processes that don’t add to any potential delays in payment.

The Five Principles of Signing Stream Inc.

Established in June of 2012, by a team with an extensive background/knowledge in mortgage lending and software development, Signing Stream is dedicated to providing exceptional service with integrity. Though the document signing industry is a competitive one, the founding team at Signing Stream saw an opportunity to develop better lender services starting with document signings. This drive to “do things better,” is what led our team to foster the five guiding principles by which our company is guided:

  1. Efficiency: We do only what we can do best, use our resources the best way we know how, and waste nothing. We organize ourselves and our assets for maximum productivity and deliver the highest quality at the least possible cost.
  2. Quality: We pay attention to the details and strive to provide the greatest products and services. Our reputation is built on high standards and our dedication to being excellent. We will only provide what we would accept for ourselves.
  3. Innovation: Our creative thoughts lead to bright ideas that lead to new value for our customers. We seek knowledge, assume nothing, and question everything to endow resources with a new capacity to create them.
  4. Contribution: We exist to make a unique contribution to society. Our collective work must provide a valuable product or service. Profit is a measure of our progress and a means to expand our ability to benefit our customers and those we work with.
  5. Responsibility: All of our associates are asked to take direct responsibility for results. All are asked to take initiative and exercise good judgement when making decisions. We are responsible for each other, our company and our clients.

The Signing Stream team is devoted to providing our clients with a service that will assure convenience and accuracy. We also offer our signing agents a connection to the largest lenders in the nation as well as a work relationship focused on quality, efficiency, and integrity.