Legal Question in Real Estate Law in California

Ask the lenders. It is their rules you have to comply with.

That was not a very good answer from Mr. Nelson.

Signatures do not have to be notarized unless the document is going to be recorded. The notarization requirement is a prerequisite to recording most legal documents, and is required as a measure to prevent fraud. But promissory notes are hardly ever recorded, so they are usually not notarized. I've only seen them notarized in private party transactions, between paranoid people who don't really know what they are doing at all.

If a promissory note is secured, there is another instrument that is recorded, which is usually a deed of trust. The deed of trust transfers automatically, without the necessity of another document, when the promissory note is transferred. But there is no requirement in California to record a document when the promissory note is transferred.