Posted by laura padilla on 9/23/06 1:28am
Msg #147976

loans

Can a broker have his wife notarize loans for him?

Reply by Pamela on 9/23/06 4:55am
Msg #147985

Laura, Re: loans

Yes he can have his wife notarize loans.

Although controversial, I know brokers who notarize
their own loans too. It is legal in CA to do so.

Pam

Reply by MistarellaFL on 9/23/06 9:36am
Msg #148013

Re: Laura, Re: loans

While it may be "legal" in CA, it is be imprudent.
Notaries in every state should not have a financial interest in the documents of the
signatures they are notarizing.
I believe a wife would have a financial interest in the outcome of the loan if her husband benefitted financially when the loan closed.
In the event of any problems with the loan, I would want to have a truly "impartial witness"
to the transaction who would testify for me.

Reply by KBLedgard_CA on 9/23/06 9:41am
Msg #148019

Re: Laura, Re: loans

Pam, have you *actually* read your 2006 handbook? Page 10 states

"CONFLICT OF INTEREST
A notary public is not prohibited from notarizing for relatives or others, unless doing so
would provide a direct financial or beneficial interest to the notary public. With California’s
community property law, care should be exercised if notarizing for a spouse or a domestic
partner.
A notary public would have a direct financial or beneficial interest to a transaction in the
following situations: (Government Code section 8224)
• If a notary public is named, individually, as a principal to a financial transaction.
• If a notary public is named, individually, as any of the following to a real property
transaction: beneficiary, grantor, grantee, mortgagor, mortgagee, trustor, trustee, vendor,
vendee, lessor, or lessee.
A notary public does not have a direct financial or beneficial interest in a transaction if a
notary is acting in the capacity of an agent, employee, insurer, attorney, escrow, or lender for a person having a direct financial or beneficial interest in the transaction.
If in doubt as to whether or not to notarize, it is recommended that you seek the advice of an
attorney."

Now, do you think the broker is doing the right thing? Do you still think it is truly "legal in CA to do so"?

Reply by Pamela on 9/23/06 10:12am
Msg #148044

Re: Laura, Re: loans

Good Morning,

and Yes I do know my handbook.

Because I've seen these type of situations before,
I have spoken to the California Secretary of State (Notary Section),
notary instructors, as well as mortgage brokers, real estate brokers,
escrow officers and real estate attorneys.

They all confirmed that a notary can notarized documents such as
these.

This question came-up when I was taking classes for my
real estate license. My instructor has a full service Real Estate/Mortgage
Broker office. She has been in the business since the mid 1980's
and has an exceptional record.

She explained that it would be in a real estate agent's/broker's
best interest to also obtain their notary license. . .in this way, they
could have better control over their own documents.

Though it may seem like a conflict, a notary who notarizes
these types of documents, do not have "direct" financial
interest in the property etc. . .

On one of my first real estate transactions, I notarized my
client's documents (before doing so, I wanted to ensure
that I could do so. Again, I contacted all the above
people and agencies, and they gave me the okay to do so.).

There are many "full-service" agencies in Southern California.

Pam

Reply by John_NorCal on 9/23/06 10:56am
Msg #148069

Re: Laura, Re: loans

This issue first came up in California in the early 1970's when I first became real estate licensed and when I received my first notary commission. According to the secretary of states office then, as it is now, there is no substantial financial interest when the notary is acting as an agent, or employee. Naturally if the notary or their spouse is named as a principal there is a conflict. I have notarized many of my own transactions and there has never been a problem, and we're talking of over 30 years here. Just cross the t's and dot the i's.

Reply by Pamela on 9/23/06 11:46am
Msg #148076

John, Re: Laura, Re: loans

Wow!

Real estate and the mortgage industry
(as well as the notarization field) has
changed very much over the years,
especially in California.

In the early 1990's many agents/brokers
I am told, left the real estate industry,
due to the sagging housing market.

If you haven't done so, have you seriously
considered writing a book?

Hats off to you!

Pam

Reply by Becca_FL on 9/23/06 9:52am
Msg #148029

Re: Laura, Re: loans

I can't wait to hear from the CA Notaries on this one. Just because it is done, doesn't mean it's right. I know of a few Florida Brokers in my area that close their own loans or have their spouse close them. Not what I would do, a little too close for me.

Reply by Charm_AL on 9/23/06 9:00am
Msg #148002

I and many others would not touch this. For the simple reason of who stands to benefit when or if it comes up legally? It is good business sense to have another notary do the signing. She has a vested interest/income in what she is notarizing...a no- no.

Reply by hcampersFL on 9/23/06 9:36am
Msg #148012

I have to agree with Charm on this. It smells of being unethical. If I was re-fi'ing and the notary said that they were the LO wife, husband, brother etc I would be very uncomfortable. Technically it may be okay but not a good idea. Why not close the loans of the husbands co-worker makes more sense.

Reply by Charles_Ca on 9/23/06 11:11am
Msg #148071

I respect your opinions on this and this has been gone over

times before but let me play devil's advocate for a moment. Since you get paid for the notarizations and even more so for the special serivces you perform (mobile notary) aren't you technically (and absolutely) profiting from our notarizations? Does that not give you a pecuniary interest in the outcome (again technically speaking)? I would suspect that the State is more concerned with the "incentive" to commit fraud. Its the old story of risk. If I put a $10 bill on the floor and asked you to pick it up you would do so without hesitation, if I put that same $10 out on a board extending from the top of a 20 storey building some might hesitate. But there are points along the way where some will still consider the risk/benefit ratio. I suspect that the State is more concerned with you profiting in the thousands (as in your own loan) as opposed to profiting in the $100s as in doing your own notarization work. In the thousands the moral resolve of some people may soften a little.

Reply by John_NorCal on 9/23/06 12:36pm
Msg #148087

Re: I respect your opinions on this and this has been gone over

Exactly Charles! That was the the rational given in 1975 when this issue was first brought up.