Every one has one and here's mine

Greetings my fellow NSA colleagues,

I wanted to share some of my insights and observations from the financial world that I see from my Tax Practice. My first observation is the recent, 9-12 month, decline in the number of NSAs participating on NC and other forums. This is to be expected with the cooling down from the highs of the last 2.5 years.

My second observation, and this one is obvious, the drop in interest rates essentially putting mortgage refis on hold. There has been a slight uptick in my region, Central Texas-San Antonio-Austin, of home equity loans. There is still a rather healthy market for new home financing due to the migration into this area. Complicating are the purveyors of 6-fixgure university, convincing folks that you can get rich in this business.

Third observation the number of signing services that have disappeared, gone radio silent, or are having cash flow problems seems to be on the rise. The days of the quick cash are over for the foreseeable future. Sorry for the gloom and doom. Keep sharing your stories on these SS companies as you’re helping your colleagues avoid financial ruin.

Fourth observation, the recent turmoil in the Banking system. We’ve have 3 significant failures of mid-sized banks [MSB]. All three of these failures were banks that had considerable Venture Capital [VC] holdings. VC has a higher than average risk profile. VC funding is more sensitive to economic winds than less risky forms of investing. I think most of you know the economy is not as simple and straight forward as some would desire. The economy is what Engineers would call a complex adaptive system. A bump at one end can result in a significant ripple as the other end. Anytime you hear the phrase ‘The problem is…’ has no idea what the problem is.

Unfortunately, my crystal ball is bit fogged up, This makes what I offer next is based on rather thin substantiation and you should take what’s next as just my opinion. I expect to see the following in the next 12-24 months:

  1. The Merger and/or Acquisition in the MSB sector. This will result in several MSBs coalescing into fewer entities. The of acquisition of MSBs by larger institutions. For example New York Community Bancorp as agreed to purchase a major portion of Signature Bank. NYCB has a subsidiary known as Flagstar Bank. Most of the Signature Bank locations are suppose to be rebranded as Flagstar Bank. Some of you may have closed Flagstar mortgages.

  2. We’ll see a continuation of Signing Services leaving this industry and a return to closings via Title Companies. Keep in mind TCs are swamped with notaries.

  3. We’ll see many of our colleagues returning to the traditional work force or launching a different business ventures. I’ve observed several our fellow NSAs becoming more combative in their comments as the reality of this situation continues to evolve. I believe these rough comments are a symptom of the stress they are experiencing. Some of my comments haven’t been as kind as they should have, so I offer my apologies as I adapt to changes in my business and will try to do better in the future.

  4. Contrary to the talking heads in Washington and Wall Street, we have been in an economic recession for the past 9-12 months. This recession doesn’t fit the orthodox definition of a recession as unemployment numbers are still running low, albeit with low wages. This may change in the future.

  5. One of my theories is low unemployment is being driven by the exit of workers due to Covid deaths/disabilities. There was a large number of older workers, 60+ yoa, who decided to retired and not return to the work force. There’s also ageism that complicates employment further. This is one of those Complex Adaptive conditions mentioned earlier.

With every big economic recession has left us with a different economy. For those of us old enough to remember, as we say it Texas this ain’t our first Rodeo. We road out the late seventies stagflation, the early 80’s recession, the 1987 stock market tanking as we moved from an industrial economy to the information age, the mid 90’s oil bust, the 1998 recession, Y2K, the 2007-2009 Real Estate bubble, and now Covid and the current recession. I don’t hold that Covid caused this recession, rather it exacerbated. We’ve been over due for due a cyclical down turn as everything has a return to the mean.

We will come out the other end of this mess a bit battle scared, we may have to accept a new reality, we may have to find new sources of income, etc… They key to survival is to remain flexible and adaptable, not get set in old ways of thinking.

Comments invited.

7 Likes

Compared to 5 or 10 years ago, I see the proportion of forum posts about business to posts about how notarizations should be done moving more toward business. This as enotarization and RON raises new questions about how notarizations should be done. The only guess about why I can offer is that IPEN and RON are done on quite a few different platforms, so people using one platform have trouble communicating with each other.

1 Like

Excellent insight. Great post!

Random history lessons I lived thru:
1963: My first home’s mortgage was a VA @ 7.5%.
1973 - 2000: Owned a small R.E. office & interest rates during that time period were never below 8%. Mostly in the 9 - 12% range.
Mid-80s: 13, 14, 15, 16%
2000 2022: Extremely long trend of ever-lower interest rates that gave birth to an unprecedented refi market…and huge need for people to get docs signed.

Jobs: This is meant as a prediction of sorts about NSAs.
In the late 50s - 60s, computer programmers were quite young and making big bucks and everyone wanted to be a programmer. Then the market got saturated with 'em and salaries dropped. See the corollary?

5 Likes

@RiverpointeTax To my fellow Texan, couldn’t have said it better myself, especially about rodeo involvement . . .

I’ve been sharing many of these items within multiple posts over the past year or longer.

Concur :100: with:

“decline in the number of NSAs participating on NC”
“mortgage refis on hold”
“signing services that have disappeared, gone radio silent, or are having cash flow problems seems to be on the rise”
“Keep sharing your stories on these SS companies as you’re helping your colleagues avoid financial ruin.”
“turmoil in the Banking system”
“The economy is what Engineers would call a complex adaptive system”
“Signing Services leaving this industry and a return to closings via Title Companies. Keep in mind TCs are swamped with notaries.”
“many of our colleagues returning to the traditional work force or launching a different business venture”
“observed several our fellow NSAs becoming more combative in their comments”
“key to survival is to remain flexible and adaptable”

======

“Sorry for the gloom and doom.” => No apologies needed. The unadulterated truth is welcome & is strongly needed especially in view of the following . . .

Very sad, but true:
“Complicating are the purveyors of 6-fixgure university, convincing folks that you can get rich in this business.”

:swan:

3 Likes

Hi Arichter. We have seen a lot. I may just point out that during the 2008 time. South Florida experienced a 30 % drop in home prices. Yes, South Florida. So I can only imagine what is going to happen in the rest of the country?

1 Like

I agree. As the technology for online/virtual notarizations moves forward and notary laws become more uniform among the States, The days of in person engagements will become less frequent. I see this being similar to image scanning replacing the Fax Machine.

1 Like

thanks for your insights.
I was in the mortgage industry fallout in 2008 and it was brutal.
I did experience alot of issues with ageism then. As I am only doing this part-time, this is not totally impacting my household …yet…
my hindsight advise from living through the last downturn is to be open to other industries and to not continue friendships with those who are only negative about the market. I spend several months commiserating with other out of work lenders about how bad things were when I could have focused on other opportunities.

2 Likes

I knew that the NSA bubble would eventually deflate. I’m one of those who decided to launch a second business to compensate for this change in our business. My NSA/GNW/SNW engagements is now a value added service to my Tax Practice. I used what I learned about Real Estate as an opportunity to provide Tax Preparation Services to Real Estate investors.

Can you explain what you mean about title companies being swamped with notaries?

1 Like

@Notary_veg

The common phrase in Real Estate is “Location, Location, Location”. What’s happening in Texas may not reflect what’s happening in your region. In other words your results may vary.

In my local region [I-35 corridor between San Antonio and Austin] and extending to the larger Texas Real Estate Market, the market has an over supply of Notaries handling RE transactions. The last numbers I found indicated "Texas took the lead with the highest statewide number of Notaries at 484,230 currently commissioned, an increase in more than 56,000 new Notaries since our last census. [NNA Aug 24, 2022]. That’s about 1 Notary per 60 individuals in Texas.

Title Companies have reopened their doors and most closings are now handled in house. The need for mobile notaries has declined. With an over abundance of notaries, Fees have sunk. Factor in other tertiary costs and risk management for this business in Texas no longer has a good ROI.

General Notary Work isn’t viable due to Texas statutory fee caps and many retailers now offering notarization services as a loss leader.

In my region Title Companies are being swamped with NSAs seeking business and are being ignored. The swag bags, business cards, cookie bags, cup cakes…are being tossed into the trashcan. The old paradigm of ‘going title direct’, as being preached by the professors of 6-figure university, no longer works. Many of our colleagues have quietly slipped out of the business. This is reflected in the decline on this and other forums and chat groups.

2 Likes

@RiverpointeTax Thank You for the accurate, unadulterated truth of the current status within our Business Sector.

I concur :100: percent with all the following:

======

NOTE: The status provided by Riverpointe Tax is valid for Texas AND for many other States in the US as well. Of course, there will always be isolated pockets with a flurry of activities, but certainly it’s no longer the norm . . .

When Researching the Directories you’re listed within you can easily see the dramatic increase in the number of names/faces present clamoring for a pie of the diminishing proverbial pie. For those who are new to this business sector (2 years of less), they’ll very quickly see there is a dearth of Signing Orders and that they were sold the “sizzle,” but not the “steak” of the “you too can earn 6-figures” sales pitch. They realize there is not only no revenue in the 6-figure range, but there’s not a full-time income for the majority of Professional Signing Agents [PSAs]. Well, that is if you don’t have a family member who is an Escrow Officer at a Title Company who diverts business your direction.

In addition, the individuals “hawking their wares” of 6-figures are now pushing their naïve/trusting “students” to start Signing Services [SSs] to create their 6-figures. Well, anyone who reads the Notary Cafe (or any other) forum is fully cognizant that the SSs are in worse shape than most, because they’re folding up their tent and leaving fees unpaid for many PSAs.

======

There will always be an isolated few with rose-colored glasses on & who ignore the sagacious insights provided by those who have ridden out the roller-coaster cycle through numerous seasons, and tell you to proceed to launch your business.

The very BEST I can offer You (the Notary Cafe audience) is to enter into ANY endeavor for business (or otherwise) with your eyes wide open, your critical thinking cap on, and crunch the numbers realistically (not optimistically).

You can also review these threads for additional sagacious insights:

:swan:

1 Like

This topic was automatically closed 90 days after the last reply. New replies are no longer allowed.