See earlier blog post about this topic here.
Dr. Guttentag -
First, thank you for your wonderful website and insights. You are well-respected among notary signing agents for your generous sharing of expert knowledge.
My question is more of a request. Please consider my response below to a question/answer that appeared on HuffPo and your website (stated below). In part, you said, "What you should do is to contact the notary agent and request the $418 be returned immediately."
The chances are very, very slim that a notary signing agent is at fault here--notaries have no authority or impact on the loan funding, unless they don't show up for the job or make excessive notarial errors. They courier documents to borrowers, notarize signatures, pick up checks, and send them back to title companies when the next UPS or FedEx pick ups happen in their areas.
The $418 would have been made out to the lender (edited to say title company), never a notary. Upon collecting the signatures and completing the signing, the notary turns pay-off checks and documents over to the title company, lender, or, on occasion, an intermediary such as a signing service that the title company hired to find a notary for the signing appointment.
That is done immediately.
If that did not happen, the title company or lender should have contacted the borrower quickly to advise them of the misbehavior of the notary and criminal charges should have been filed against the notary and an official complaint made to the notary's secretary of state. The notary (who is netting about $50 for his or her services) would never have been able to walk off with the borrower's $418 unless the title company and lender were asleep at the wheel.
There is a 99.9% chance that the notary agent turned over the check and the title company or lender is at fault here. (It would be interesting to know if the check was cashed.)
My guess is that the title company or lender lost the check (if it was not cashed) or someone is dishonest or not handling their business at the title company or lender and they are doing a great job of covering it up.
Before I wrote this, I checked with a couple of folks in the title business and a property attorney. It's worth a consideration and hopefully will explain how little the notary had to do with the problem. The borrower should go directly to the title company and lender and be very aggressive on this one to find where the fault lies.
If the notary is at fault, the borrower should have been notified within 36 hours so he or she could protect his or her non-public, private information in the hands of a dishonest notary public. That would be my primary concern for this person.