Posted by Rick_In_NY on 6/25/05 8:20pm
Msg #47830

Does A Borrower Who Is Not In Title Sign Mortgage and NORTC?

I am a New York notary. Recently, a settlement company doing HELs for a major national bank started asking me to have borrowers who are NOT on title sign the NORTC and the mortgage and to acknowledge their [the non-titled borrowers'] signatures on the mortgage.

It seems to me that a person NOT on title should not have to sign a mortgage for it to be legally recorded or have the Right To Cancel a home equity. New York is NOT a community property state. Is the settlement company incorrect to have me do that?

(This is the reverse scenario of a non-borrowing property owner who permits his/her property to be mortgaged.)

Sorry if this question gets asked a lot!

Reply by Sylvia_FL on 6/25/05 8:26pm
Msg #47832

I never question the settlement company on these things. If the non-titled borrower has a problem signing those docs they need to call the company to find out why the company is requiring it.

Reply by Rick_In_NY on 6/25/05 8:30pm
Msg #47835

Thanks for the reply! Please don't misunderstand me. The settlement co. pays me and I do what they want. If the document gets rejected by the clerk, it's their problem, not mine. I'm just wondering what is legally required in NY.

Any other New Yorkers?

Reply by Nancy in Florida on 6/26/05 5:50am
Msg #47893

First let me say don't let my name fool you, I have only been in FL for 18 months, I am from NY and I did RE closings for many years in NY. Let me see if I have this straight, the person they want to sign the Mortgage and NORTC is on the loan but will not have an interest in the property? Another words they are a co-signor without having ownership in the property itself? If that is the case, they should sign the NORTC because they does pertain to the loan and they do have a right to rescind since they are on the Note and are obligated to repay to debt. As far as being on the mortgage that should follow vesting and who is on the deed and title to the property. If the Mortgage is different from the Deed and title the County Clerk's office might reject it. I would just call to get clarification from the Lender or TC.

I know in NY this is a very common practice for those in the medical profession. I did many loans for Doctors that needed to be on the loan for qualifying purposes but did not want to have ownership to the property due to the possibility of lawsuits. Since NY isn't a community property or homestead state this is a perfectly legal and common practice.

Reply by Rick_In_NY on 6/26/05 1:33pm
Msg #47945

The Right To Cancel is a federal law so it pertains to all these United States. How a mortgage is recorded and who has to sign or give permission for property to be offered as security is typically a state issue.

Yes, it's very common for people to have r/e properties not in their names for asset protection purposes. My question is: Why should someone have the right to protect ("the right to cancel") a mortgage on real estate that they don't legally own?

Is it not true that the purpose of the Right To Cancel is to protect people from obligating themselves to a bad deal when the security is their primary residence? Here is what is printed on the NORTC: "We [the lender] have agreed to establish an open-end credit account for you [the borrower], and you have agreed to give us a [mortgage/lien/security interest] [on/in] your home as security for the account."

How can a person give a lien to a lender on property they do not own? They are signing a statement which is not true. I am not aware of any federal or state law which gives a consumer three days to cancel when the contract is not in regard to the consumer's primary residence, for example, a home improvement contract.

As I said before, the settlement company is paying me and I will do as they ask, but intellectually, I am wondering what is correct?

I'm still not convinced.