Posted by Vince/KS on 4/27/07 11:16am
Msg #187353

Ethical obligation question - long

A friend called with what he called a "point to ponder". He had a signing that another notary had walked out of because of a belligerent husband. The loan was for a husband and wife where the wife is a non-borrowing spouse, but works a public job that would typically have a salary in the $32,000 to $42,000 range (not on 1003 form). Kansas is a homestead state so she does sign several docs. The husband had an income of about $72,000 and has worked at the job more than ten years according to the application. When he arrives at the signing the smell of alcohol is fairly strong on the husbands breath. His speech and thought patterns, while unpleasant, seemed to be reasonably clear. The wife said he had one drink to relax before the signing as the other notary had walked out and they wanted to get this over and done with.

He does seem to have capacity as he is well aware of the contents of the documents and would prefer to argue with the sa, but does call the lo on several issues. The spouse indicated that he has had some time recently and has not been relaxed since recently being laid off from his job. He has in fact started another business and working some evenings at getting that the new business going (it is a venture that will likely take many years to earn the level of income shown on the app). He has a cashiers check ready to pay down part of the loan for about 30% of the appraised value of the house. The piti are going to amount to nearly what the notary assumes is her salary.

They proceed with the signing and get the job done. Later, the tc wants to know how it went. He indicated that it was difficult, but that it was completed. What he wonders about is whether he should advise the tc and/or lender of the wife’s revealing that the man is virtually unemployed, contrary to the application, and that his capacity MAY have been affected to a degree (limited by a small factor) by the alcohol. My friend feels that he should advise the tc that the information within the application may have been accurate at the time of the loan but has apparently changed. He is also a bit worried about whether he should be revealing personal information that was spoken orally in view of the right to privacy act and to whom does he have an obligation?

I told him he should consider calling the sos office as that is the controlling entity on his commission and that they should be aware of the various aspects of the case, but he should do so quickly before the loan is funded. I also suggested that I would be happy to pose the question on notrot and see if any have had similar instances in this apparent quandary.

Reply by SueW/Tn on 4/27/07 11:27am
Msg #187361

BO signs docs that states their income hasn't changed, being laid off isn't as drastic as being fired, he could return to his job tomorrow and then what? I think I'd just do my job, drop those docs and move on to the next assignment. He wasn't drunk or I'd like to hope your friend would have adjourned the signing.

Reply by aatatusko on 4/27/07 11:30am
Msg #187362

Maybe he has a terminally ill rich uncle. Another reason SA shouldn't be chit chatting with the borrowers.

Reply by Julie Williams on 4/27/07 11:42am
Msg #187370

MYOB we are not the RESPA/Notary police!

Reply by DebbieT on 4/27/07 2:09pm
Msg #187423

Re: MYOB we are not the RESPA/Notary police!

I totally agree Julie. We are there to witness signatures and that is it. Looking too far into something that you have nothing to do with might bring you unwanted problems.

Reply by Ernest__CT on 4/27/07 4:18pm
Msg #187470

Ethical obligation: There's two issues here.

First, the Notary should have (and probably would have!) adjourned the signing if the man was impaired. One beer probably does not impair a signer. There may be circumstances, of course. In any discussion, anywhere, bringing up the fact that the man had alcohol on his breath will lead to more questions about the Notary than about the signer.

If we notarize a signature on a document that contains data that we ***know*** to be false, then we are guilty of aiding fraud. If it were I, I would have a quiet word with somebody up the food chain; I would ***NOT*** put anything in writing! Just a simple, one- or two-sentence "Gee, I was sorry to hear that Mr. Jones had lost his job. You might want to check ...." would be all I'd do.