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Three Steps to a Smooth Closing

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By Amy Tankersley

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Are notary scheduling issues impacting your customers’ mortgage closing experience? You aren’t an anomaly.

“Notarizing documents represents the last mile of the closing process, but unfortunately, it is a part of the process that neither we nor lenders own,” said Jasper Bear, States Title’s Director of Customer Success. “There really should be a contest to see who can come up with the best solution to the notary problem, because it’s a million-dollar problem.”

Most professionals in the mortgage, real estate, and title and escrow industries agree that working as a notary is one of the most difficult positions in the mortgage transaction process, and a thankless job. Many notaries must travel far distances to witness the signing of loan documents, especially in rural areas, and often on short notice. Travel and supply costs and maintaining adequate liability insurance can be a struggle in this notoriously low-paying profession.

2020 exacerbated many of these challenges for notaries, lenders, and title companies alike. At the same time we experienced unprecedented transaction volume due to historically low mortgage interest rates, and continue to battle changes related to the COVID-19 pandemic and its recommended health precautions. Notaries are facing a host of challenges as they strive to provide the same level of quality signing services:

Even when a notary follows all laws and regulations, recommended precautions, and instructions from the lender client, all real estate transactions can be subject to last-minute changes. This unpredictability may prevent notaries from performing their duties on time or as planned, causing closing delays and a confusing, hectic process for consumers – and the resulting poor customer service experience can impact customer satisfaction (CSAT) scores for lenders and their title providers.

“Most lenders ask customers to rate their satisfaction after closing,” Jasper said.

Because consumers tend to think everyone involved in the transaction is affiliated with the lender, if you get a notary who shows up late, the whole thing can create a bad experience – and the lender gets dinged.

Thanks to the data our Operations and Customer Success teams collect and analyze on each transaction, we have identified several opportunities to ensure a more satisfying, successful signing process, free of notary hassles:

1. We work with reputable signing service providers that prescreen notaries and rate their ongoing performance. In some cases, our lender clients prefer to work with their own preferred notary network, and we also offer that flexibility.

“We use reputable services that rate their notaries from at least three to five stars,” Jasper said. “If a poor notary performance is noted and documented, we blacklist them.”

2. We clearly define the lender’s expectations for each transaction with detailed service-level agreements (SLAs) and continuously monitor their performance.

 “The amount of data we track and share with our lenders is unprecedented in the title industry, and our data tells a compelling story,” Jasper said. “We monitor how often we are meeting each SLA, from scheduling, to commitment, to Closing Disclosure preparation, to commitment delivery, to clear to close. For example, a lender may require that CD prep takes four hours. We track how often we meet that goal, and identify and address any deficiencies if necessary.”

3. In addition to our patented instant title solutions, we are developing cutting-edge technology to address some of the most common pain points in the notary process.

“These issues have been on the hit list of our founder and CEO, Max Simkoff, since he first envisioned a simpler, more modern closing experience,” Jasper said. “At the end of the day, you can attack these issues in a multimodal fashion that improves margins slightly, but until you leverage machine intelligence technology to streamline certain parts of the process, all you have done is put on lots of little Band-Aids.”

Meanwhile, we have also identified key changes that our lender partners can make to their own internal processes to alleviate common notary challenges.

We are actively encouraging certain behavioral changes from our clients to ensure a smooth closing process for everyone involved and a positive customer experience,

Jasper said.

These tips include:

1. Send document packages as early in the transaction as possible.

“Our data tells us that most lenders send documents about an hour prior to the scheduled closing time,” Jasper said. “We have been proactively communicating to our customers that the sooner you can get document packages to us, the better. While some title companies request them at least 24 hours in advance, we would like to receive them at least four hours in advance. This usually gives us sufficient time to schedule notary service, and give the notary enough notice to get to the location on time.”

2. Ensure all vesting data is correct, and deliver it to us as early in the closing process as possible.

“If we get close to closing time and we don’t have the correct vesting information, we have to redo the docs, which delays everything,” Jasper said. “Our data tells us that many lenders do this in the final 10 days prior to the scheduled closing date. We recommend that lenders do this within the first 30 days of the closing process instead.”

3. Create clear, readable notary instructions and detailed checklists for them to follow.

In October, the Mortgage Industry Standards Maintenance Organization (MISMO) issued new templates for Uniform Closing Instructions – the culmination of three years of collaboration between the Mortgage Bankers Association (MBA) and American Land Title Association (ALTA) to develop a uniform set of lender and transaction closing instructions. Lender adoption of the templates is expected to reduce miscommunication and resulting errors that occur at closing due to the wide variance in formats that currently exists. A public comment on the proposed Uniform Closing Instructions ended on December 23, and many lenders are already working them into their system updates and upgrades for 2021.

Until widespread adoption occurs, however, we encourage lenders to develop step-by-step instructions for notaries to follow.

“Every lender and title company’s set of instructions are different,” Jasper noted. “We recommend providing notaries with a bullet-pointed checklist of tasks to complete and reminders for how to carry out the transaction. This reduces common errors or questions about the way lenders expect certain transactions, like those involving a trust, to be carried out.”