I've spent a lot of time reflecting back on the adjustable rate subprime loans I've handled over the years. What responsibility, what role, did signing agents play that brought us to our current situation? Could we have handled our part differently? It's always a fine line that we walk. Show the terms, but don't explain them. Be neutral and independent, but don't bite the hand that pays you. Don't advise, don't convince someone to sign anything they don't want to, but understand that if the borrower doesn't sign or if they rescind, you might not get paid or you might only get a trip fee.
So, if borrowers felt that they were misinformed or didn't understand what they were signing, how could the signing agent have prevented this (and how can we prevent it in the future)? Even though we can't EXPLAIN loan documents, everything a borrower needs to know is right there in three key documents; the settlement statement, the truth in lending form, and the note. In my opinion (and I know that the point and sign notary will disagree), it's not beyond our scope, it's not UPL, to SHOW the borrower their key information. On the note, they should see their interest rate, the first payment due date, when and if the loan becomes adjustable, the index, the margin, the cap, the payment grace period. On the settlement statement, they should be able to see where the mortgage fees are, the title fees, if there's an initial escrow being set up, if there's anything else being paid off, and any money they owe or are getting at closing. On the TIL, you should be able to show them what the monthly payment is without escrow, what estimated payments will be after the initial fixed period expires if applicable, and whether or not the loan may have a prepayment penalty. Also, it helps to understand the difference between an interest rate and an APR. Many loan packages have an additional sheet that explains the A through D boxes on the TIL, including the APR. I always keep a generic one on me if the borrower requires a clarification.
If a borrower SEES everything above, then they've got a solid knowledge of their loan terms. They can walk away feeling comfortable that they understand their loan, and a signing agent can walk away knowing they did their job without explaining, advising, or UPL.