Notary

A notary public is an official commissioned by a state government to serve as an impartial witness to the signing of important documents. The notary verifies the signer's identity, confirms they are signing voluntarily, and applies an official seal or stamp to the document. This process -- called notarization -- deters fraud and gives the document legal standing for recording with county offices and enforcement in court.

Role in Mortgage Note Transactions

Notarization appears at multiple points in a note investor's workflow. Any document that will be recorded with a county recorder's office must be notarized, and many unrecorded agreements benefit from notarization as well.

Documents That Require Notarization

Documents That Benefit from Notarization

Forbearance agreements, promissory notes for settlement payments, and borrower acknowledgment letters are not always recorded, but having them notarized strengthens their enforceability if a dispute arises later.

The Notarization Process

The standard notarization process involves four steps:

1. Personal appearance -- the signer must appear before the notary in person (or via authorized remote online notarization in states that permit it).
2. Identity verification -- the notary checks a valid government-issued photo ID to confirm the signer is who they claim to be.
3. Willingness and awareness -- the notary confirms the signer understands the document and is signing without coercion.
4. Seal and signature -- the notary signs, dates, and applies their official stamp or seal, then records the transaction in their notary journal.

The notary does not review the legal substance of the document or provide legal advice. Their role is limited to verifying identity and witnessing the signature.

Remote Online Notarization (RON)

Most states now authorize remote online notarization, which allows signers and notaries to connect via secure video conference. RON has become increasingly common in note investing because transactions often involve parties in different states. The signer's identity is verified through knowledge-based authentication and credential analysis, and the session is recorded for the notary's records.

Not all county recorders accept RON-notarized documents yet. Before relying on remote notarization for a recorded instrument, confirm that the recording jurisdiction will accept it.

Notarization in the Collateral File

During due diligence, investors review the collateral file for proper notarization on every recorded document in the assignment chain. Each assignment from one holder to the next should carry both a notary stamp and a county recording stamp. A missing notary stamp on an assignment is a red flag -- it may indicate the assignment was never recorded, which can create gaps in the chain of title.

When auditing the collateral file, verify:

• Every assignment has a notary stamp with a legible commission expiration date
• The notary's commission was active on the date of signing
• The notary's state matches the state where the document was signed
• Recording stamps from the county follow each notarized assignment

Common Issues for Note Investors

Stale notarizations. If an assignment was notarized but never recorded, and the notary's commission has since expired, the document may still be recordable in most jurisdictions -- the notarization is valid as of the date it was performed. However, some counties may question older documents, so prompt recording is always preferable.

Out-of-state notarization. Documents are generally notarized in the state where the signer is located, not the state where the property is located. An assignment for a property in Ohio can be properly notarized in Texas if the signer is in Texas. The notary must be commissioned in the state where the notarization occurs.

Notary costs. Standard notary fees are set by state law and are typically modest -- ranging from $2 to $25 per signature depending on the state. Mobile notary services that travel to the signer charge additional travel fees, often $75 to $150 per appointment.