Is a notary a settlement agent for purposes of discloser on the closing disclosure? We allow consumers to close home equity term loans by mail and require only that the signatures be notarized. In this case, I don't believe the notary is acting as a settlement agent but don't really know how to support this argument. Also, today, when our Loan Originator closes a mortgage loans, we list the bank as the settlement agent on the HUD. Does the bank get listed as the settlement agent on the CloD?

A notary witnesses signatures. They have nothing to do with "closing" a loan and definitely are not a settlement agent.

Some notaries act as "signing agents" on behalf of settlement companies, walking the customer through the closing package, checking ID, notarizing documents, overnighting the signed documents to the settlement company. They do not handle money and are not the "settlement agent", but are the settlement agent's representative at closing.

Just sending docs to your customer to sign in front of any notary does not even rise to signing agent level.

Thank you so much Randy and Kathleen.

Just to clarify my understanding: We have in-house notaries notarize our Deed of Trust and never charge a notary fee to the borrower. This is then NOT a settlement fee that needs to be disclosed on the LE, nor do we need to show a "lender credit" for the fee since the bank is not passing it on to the borrower. (We do not charge credit report fees either and will be showing those fees with a lender credit - not sure why the notary fee would not also be disclosed.)

Because there is a difference between services that the bank is able to perform itself and those it has to pay someone else for. The bank doesn't incur a cost for providing notary services; it's what's often referred to as "overhead." But the bank pays either a subscription or a per use fee for obtaining credit reports from a third party.

But check state law to see if you must pay that notary! They are operating independently of the bank under many state laws.

And if someone has to pay a notary fee, it has to show up on the TRID disclosures whether the borrower pays it or you pay it, even if the notary is otherwise your employee.

This is very helpful - thank you!

If we charge the borrower for the notary fee, would we list the name of the escrow company as the name of the provider (and not the name of the individual notary) on the Closing Disclosure?