The more knowledgeable you are about the overall loan process the more comfortable you’ll feel when you perform your signings. Here is a very general outline of the loan process and the key players to show you where you will fit into the big picture.
• Borrower: The person or persons applying for a loan. This will usually be for the purchase of a home, to refinance an existing home loan, for a second mortgage or home equity loan.
• Broker/lender: A borrower applies for a loan through a loan broker or directly to a lender, such as a bank or credit union. Borrower information is collected on a loan application, and the qualifying process begins. The broker/lender matches the qualifications of the borrower to an appropriate loan. The borrower will make payments directly to the lending entity.
• Escrow/title Company: An escrow is opened by the broker or lender with a title or escrow company. The title/escrow company performs a title search to make sure the title to the property is clear of any liens, and then issues title insurance and a Preliminary Title Report. The escrow company is also the guardian of any funds from any parties to the transaction that are to be held in escrow during the closing process and then disbursed at closing.
• Closing: The title/escrow company arranges for the borrower to finalize and sign the paperwork required by the lender. This is the precise moment the signing agent enters the picture to perform the loan signing. After all signatures and notarizations are performed and any rescission (right to cancel) period has elapsed, the Deed of Trust is filed with the county recorder’s office. Finally, the escrow funds are disbursed to the proper payees (including your signing fee), and the process is complete.
The escrow officer or their assistant is the person the notary signing agent will most likely be dealing directly with (unless you’re working through a signing service). The escrow officer’s job is to coordinate the loan closing by following the lender’s specific instructions, gathering all necessary information, arranging for title insurance, collecting any funds to be held in escrow, disbursing the funds from escrow, verifying that hazard insurance on the property is in effect and in the proper amount, and that property taxes have been paid. They also perform many other tasks.
The escrow officer often performs the signing themselves (sometimes called sign-up), but sometimes they or their assistant will arrange for a notary signing agent (you) to do it, especially if the signers/borrowers reside out of town or out of state, or want a notary to come to their home or office.
In the lender’s closing instructions, the escrow officer is referred to as the “closing agent,” even if a notary signing agent conducts the signing for them. The signing is just one part of the whole loan closing process, and not the actual “closing,” which happens a few days later after the recision period and other closing activities are finalized.
NOTE: If you work through a signing agency, you probably won’t be dealing directly with any escrow officers. The signing agency will send you on assignment to perform the signing and then pay you directly.