The FBI has enlisted the help of a notary public organization to assist fraud investigators in the prevention and identification of mortgage crimes.
Notarization, when used properly, is an effective weapon against mortgage fraud because it requires valid signer identification, authenticates signatures, and provides an evidence trail for prosecutors should a fraudulent transaction take place.
Negligence and illegal use of notarial powers can be found at the source of most mortgage fraud incidents.
Such as in the case of a Pennsylvania man accused by state prosecutors of illegally notarizing mortgage documents in a scheme to dupe low-income homeowners into securing inflated home loans. Other cases involve the submission of bogus documentation allegedly forged resulting in a multimillion-dollar mortgage scam.
Or in the case of the California notary that provided fraudulent notarizations on multiple deeds of trusts for FHA loans.
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The National Notary Association’s Executive Director, Tim Reiniger, said although some states require a background check to become a notary, it would be advisable to run a criminal check on prospective employees and only hire those of high integrity. “We view our (National Notary Association) notaries as ‘Guardians of Property Rights’ because they are key to protecting the public’s rights at the closing,” Reiniger explained.
To help ensure that only legitimate transactions occur during the mortgage loan process, the Notary Association provided MortgageDaily.com with ten guidelines for mortgage professionals to follow when choosing a notary.
- Employ only a Notary who insists that you personally appear to have your signature notarized. To properly witness your signature, a Notary must see you, identify you and take your acknowledgment in person. Beware of a Notary who sanctions such shortcuts as “telephone notarizations” or says he or she can notarize your document because he or she is familiar with your signature.
- Employ only a Notary who does not take shortcuts in determining a signer’s identity. If a signer is not personally known to the Notary, the Notary must carefully scrutinize the signer’s identification documents or administer an oath to an individual personally known by both Notary and signer.
- Employ only a Notary who keeps a journal of notarial acts, even when state law does not require one. If the Notary asks each signer to affix a signature and a thumbprint in the journal, even better – you are dealing with an individual who is in an elite group of super-conscientious Notaries. If your document is lost, challenged or fraudulently altered, the Notary’s journal can be critical in protecting your rights.
- Employ only a Notary who affixes a seal of office on your document, even when state law does not require this. If the Notary uses an embosser seal in addition to an inking stamp to prevent fraudulent replacement of document pages, even better! Most recipients of notarized documents expect seals and may challenge any document without one.
- Employ only a Notary who can communicate directly with you in your own language. It is risky to depend on an interpreter, who may have a motive for misrepresenting the document. In the United States, Notaries may be found in foreign consulates and ethnic neighborhoods who speak virtually every known modern language.
- Employ only a Notary who does not overstep his or her legal bounds. Notaries may not advise others on how to complete a legal document — that’s the attorney’s role. Be wary of any Notary who advertises as a “Notario Publico” or who claims to have special standing with immigration officials.
- Employ only a Notary who is truly an impartial and objective witness. Having a Notary who is named in the same document notarize your signature is a risky proposition, since a court will almost certainly invalidate the notarization due to a conflict of interest. And, a Notary should never pressure you to sign a document you are unwilling to sign.
- Employ only a Notary who checks your document to ensure it is complete before notarizing it. Never use a Notary who insists that you sign a document containing blank spaces, since by doing so the Notary is in effect asking you to sign a blank check.
- Employ only a Notary with a current commission who is in good standing with the state. Ask to see the Notary’s commission or official state identification card. If necessary, call the state office that commissioned the Notary to verify good standing — the Notary’s status is a public record.
- Employ only a Notary who has been trained by the National Notary Association and keeps current on important developments in fraud prevention and detection through association membership. It is risky to rely on an untrained Notary.
