A notary got a call from a loan broker she knew who asked her to notarize loan documents for a couple who wanted to refinance their home. She agreed and met the broker and couple for lunch. The notary asked for identification from the couple and was shown their drivers’ licenses. She notarized the documents and recorded the transaction in her register.
The police contacted the notary several months later and asked to see her register. They were investigating a case of identity theft. The loan broker and couple she had helped with their refinancing documents had fooled her. The couple didn’t own the property they had refinanced. The three criminals took the loan money and ran.
Meanwhile, the rightful property owners had spent a considerable amount of money and time getting their property rights restored. They sued the notary alleging negligence in the notarization process, even though the notary had done nothing wrong. The bank that had made the now uncollectible loan also filed suit against the notary. Although she was bonded, as required by the Pennsylvania Notary Public Law, the notary did not have Errors & Omissions (E&O) Insurance. A notary bond protects customers in case a notary makes a mistake. This type of bond must be paid back. E&O Insurance insures the notary when a customer suffers a financial loss. It doesn’t have to be paid back and financially protects you as a notary as well as the company you work for. Think of it as malpractice insurance for notaries.
The notary in the case above had to retain an attorney to defend herself against both lawsuits. She ended up paying thousands of dollars in attorney fees and settling the lawsuits. It was financially devastating for her.
Even if you never make a mistake during your notary commission, there is always the possibility that you could be accused of misconduct.
Why risk it?
Call a PAN customer service representative at 800-944-8790 or visit our Web site at www.notary.org for information on Errors and Omissions Insurance.
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I am new to loan signings.
What amount of E&O Insurance is recommended for Notary Signing Agents?
Also, what is the typical charge for mobile loan signings?
Like any insurance coverage, you should estimate the likely expense of a claim, and insure yourself for something over that amount. As a signing agent, your exposure is probably higher than a notary’s, since mortgages are often involved. A $50,000 or even $100,000 E&O policy would not be out of the question for you.
As to typical charge, the days of $100-plus loan signings are past, except perhaps in certain markets. Some lenders are offering less than $45, but $60 to $100 is probably in the ballpark.