Posted by jnew on 7/28/11 3:36pm
Msg #391827

Notary hold harmless agreement

We had something come up on Facebook today. One of the notaries said that she used a hold harmless agreement and required the borrowers to sign. Basically to explain what the notary's responsibilities are but a provision that the borrowers will pay the notary if the settlement agent or signing service does not pay the notary. My first question was: Isn't this a RESPA violation? The borrowers should only have to pay what is listed on the HUD 1. The borrower is on the hook for the notary's bill if she doesn't get paid, so in effect the BO is paying twice for the same service. The Facebook notary says no it is not a RESPA violation. I advised her to have an attorney review her agreement. I guess the UPL issue is there also, since she is establishing a contract outside the purview of the lender/borrower transaction. I am not an attorney, so I don't like making people sign agreements that are not part of the closing package.

Reply by FlaNotary2 on 7/28/11 3:42pm
Msg #391828

If the borrowers are AGREEING to sign it, what's the prob? n/m

Reply by FlaNotary2 on 7/28/11 3:42pm
Msg #391829

And exactly how is "establishing a contract outside the

purview of the lender/borrower transaction" considered the rendering of legal advice?

Reply by jnew on 7/28/11 3:46pm
Msg #391833

Re: And exactly how is "establishing a contract outside the

I am not answering the question, I brought it up for discussion.

Reply by Sylvia_FL on 7/28/11 3:46pm
Msg #391832

She can't hold the borrower responsible for the signing service or title company not paying her. The contract is between the notary and the company, not the notary and the borrower.

If I was the borrower and the notary came to me with that I wouldn't sign it and I would be on the phone to the title company or lender to let them know.

Dollars to donuts if the companies knew she was doing this she would be removed from their database.

Reply by Bob_Chicago on 7/28/11 3:52pm
Msg #391835

Great minds think alike.. LOL n/m

Reply by Teresa/FL on 7/28/11 3:52pm
Msg #391836

Aren't there a couple of TCs that include these in their

packages? I seem to recall seeing this type form in Reverse Mortgage packages from Premiere Reverse Closings.

Reply by Linda_H/FL on 7/28/11 3:58pm
Msg #391841

I had one in an RM pkg about 3 years ago...I was

very uncomfortable with it..

My recent Premier Reverse packages have not had that form - maybe they yanked them - for a very good reason!!

Reply by Buddy Young on 7/28/11 4:34pm
Msg #391847

I agree Sylvia

Reply by Susan Fischer on 7/28/11 6:13pm
Msg #391861

There's a SS that includes an HH Agmt in the SS's favor.

When I have to present that doc, the questions start. I'd say the majority signed it - a few borrowers went back to the HUD, and after reviewing the fees, wrote a big D-E-C-L-I-N-E-D and initialed, and we were off and signing/stamping again.

Different issue than a personal HH Agmt, I know, but to me, I could no more ask borrowers to sign one in my favor, any more than I could do anything but allow borrowers to decline one in favor of an SS.

jmho

Reply by MW/VA on 7/28/11 9:06pm
Msg #391883

Agree with Sylvia on this one. A hold harmless agreement is

one thing, but not about payment for services. The borrower is already paying that on the HUD.

Reply by MichiganAl on 7/29/11 1:50am
Msg #391922

If this were Facebook, I'd give Sylvia a "like" for her post n/m

Reply by jba/fl on 7/29/11 9:57am
Msg #391945

I find myself all the time looking for the thumbs up! n/m

Reply by MW/VA on 7/29/11 3:12pm
Msg #391978

We need that here. It could make things a lot simpler. LOL n/m

Reply by Bob_Chicago on 7/28/11 3:50pm
Msg #391834

This issue has been discussed all of the way back to the

old NASA board, (predecessor of NOTROT)
Consensus has been that this is a VERY bad idea, a violation of RESPA, and an excellent
way to get a NSA on a permanent DO NOT CALL list.
Sounds like NSA is telling bwrs, "If you don't sign this agreement, then we will not proceed with signing your loan papers. They have been sending multiple copies of dox to their lender for the last six months, their rate lot is expiring, and they are presented with a last minute ultimatum.
If the NSA does not trust the hiring entity to pay them, then they should decline the assignment.
Not lay the risk on the innocent borrower.

Reply by NJDiva on 7/28/11 4:41pm
Msg #391849

I present a Hold Harmless Agreement, HOWEVER...

it merely states what my role is, that I'm not an atty, and I cannot interpret the legalities of the doc's. However, I will tell them what role the document is within the package (pretty much what they can read if they were going to sit and read the document.)

I also include in it the Pledge of Ethical Practice which is from the *** and finally I have a disclaimer stating that they certify that they did/will not solicit me in the direct signing of their doc's and further that I did/will not provide info, advice or explanation of any doc's with respect to the signing. I have them date, print and sign their names.

This way if anyone tries to use me as a scapegoat, such as saying I performed UPL, I have the borrowers actually asserting in "wet ink" that I did not.

What's really funny is that I had a title company call me this morning when I was in a closing saying they needed me to call them back about a closing I did on Monday because there was a discrepancy on information I gave the borrower about their documents. Apparently the BO told them that I had explained something incorrectly.

While at the Monday closing, the bo (totally OUT of his mind...duh, is anyone home?) had questions on the HUD. Since it was 8am and his LO was not avail, we called title. What was funny is that the name of the person at title was the same as mine. So when the BO said, "Cheryl said..." title automatically assumed it was me!! lol I made it very clear that it was THEIR Cheryl that gave the explanation NOT me.

It was great timing with title calling while I was in my closing this morning though, because it was my case in point to those BO's why I have them sign it.

Reply by gowithn/TN on 7/28/11 7:53pm
Msg #391875

Re: I present a Hold Harmless Agreement, HOWEVER...

I think this is a great idea. You are simply stating your scope of representation. No money ... no problem.

Reply by JanetK_CA on 7/29/11 1:54am
Msg #391923

Very well said, Bob!

"...they are presented with a last minute ultimatum."

It if was me and I'd gone through all the back and forth I hear about from so many borrowers, only to have some person who pops in at the very end suddenly present me with something like that... Well, let's just say that I might find myself going through a personality change and someone's eyebrows might get singed... I would NOT be happy about it. And if I was the escrow officer or LO on that package, I'd probably react even worse.

Reply by Linda_H/FL on 7/28/11 3:56pm
Msg #391838

My understanding is all monies exchanged in the course

of the transaction at hand MUST be accounted for on the HUD - there can be no side payments or monies exchanged, nor can there be any side agreements for a promise of funds.

I agree - I think it's a RESPA violation and I think this notary could end up in a boatload of trouble if someone decided to contest it. Hold Harmless signed by hiring party agreeing to the duties the notary will perform, that's one thing. Promise/agreement to pay is a problem.


My .02 FWIW

Reply by Linda_H/FL on 7/28/11 3:57pm
Msg #391840

s/b Promise to pay by the borrowers...".. n/m

Reply by BrendaTx on 7/29/11 6:37am
Msg #391927

Notaries should not operate on a credit basis if they cannot afford to not be paid on any job. This shows a lack of business sense and lack of professionalism.

I do NOT endorse lying down and letting a no-paying kind of company run over you, but it is not the borrower's fault.

I would not hire this person to conduct a poop scooping job for me.

Reply by Belinda/CA on 7/29/11 8:29pm
Msg #392015

I did a signing last night for a Reverse and it had a form in it from Title that stated if the client did not go through with the transaction they were still liable for the Notary fees. I was shocked! Have never seen this before. I told her what it said and she said, "Well, I didn't hire you in the first place." Then she smiled a warm smile and said she'd be happy to pay me and signed away. I like that form!

Reply by JanetK_CA on 7/30/11 11:27pm
Msg #392121

I dislike that form - a lot

You're lucky. Seems you found yourself in front of a very gracious lady to didn't want to offend a guest. Sorry, but that form makes me feel very uncomfortable for reasons pretty well stated above. And like the lady said, "Well, I didn't hire you in the first place." Someone else did and they're the ones who should pay, imo.