Posted by Amberjt on 10/27/04 4:42am
Msg #10545

Question on Loan Docs

I am new to loan doc signing and had my first appointment tonight. The borrowers ended up not signing because there were too many errors (large ones) in the documents. I noticed on some of the signature pages it said (seal) next to the signature line, would this document need to have a notarized acknowlegement as there was no notorization wording on the page or what does that mean? This was for a purchase and a line of credit so there was no recission period and the borrowers were not comfortable in signing the documents and trying to get the errors changed after they signed.

Reply by Sylvia_FL on 10/27/04 6:47am
Msg #10547

No, the "seal" next to signature is nothing to do with your notary seal. Just ignore it. You will see it all the time on the docs.
It is a throwback to the days when individuals had their own seals.

Reply by Amberjt on 10/27/04 11:21am
Msg #10551

Sylvia_FL,
Thank you so much. I thought that would be alot more notarizing than I was expecting.

Reply by Barbara / CA on 10/27/04 3:42pm
Msg #10567

Actually the seal is for when the borrower is a Corporation. When an entity of a Corporation is signing a document, they have to place their Corporate Seal on the document. The only document that will have the word "seal" next to the signature lines will be the Promissory Note. If you are signing up an individual, then no seal is required.

In regards to the Right to Cancel. All lenders for an Equity Line of Credit (even for a purchase) require a Right to Cancel to be signed. Some lenders actually have to wait out the 3 day period prior to funding, must lenders will fund the loan prior to the 3 days because it is a purchase.

Reply by Sylvia_FL on 10/27/04 4:55pm
Msg #10569

It is a throwback to the days when a seal was a person's signature. They were either applied directly on the document or attached by cords or chains. This helped maintain authenticity by not allowing reuse of the seal. If a forger attempted to remove the seal it would break. If the forger could remove the seal intact by ripping the cords off the paper, he would still have to separate the cords to attach it to another document, which would destroy the seal as well.
It is uncommon for private citizens to use seals any more.

When I used my corporate seal on a document the place for the signature usually specifies it is a corporate signature, then a place for my seal.

Reply by PAW Notary Services on 10/27/04 8:05pm
Msg #10578

>>> All lenders for an Equity Line of Credit (even for a purchase) require a Right to Cancel to be signed. <<<

Not necessarily. The right of rescission is not available when you refinance your loan with the same lender, when the house in question is not your primary residence (in other words, if it's your vacation home or an investment property), if you borrow the money for your business, or if you're borrowing from a state agency.

That leaves a lot of situations where you do have the right of rescission: when you refinance your mortgage with another lender and when you take out a home equity loan or line of credit (unless it's part of a "piggyback loan" designed to avoid paying mortgage insurance).

Reply by Sylvia_FL on 10/27/04 11:47pm
Msg #10584

My favourite Popsie opined:

"when you refinance your loan with the same lender,"

I believe that is only if it is a streamline loan where they are not getting cash out, just refinancing to get a lower interest rate.

Reply by PAW Notary Services on 10/28/04 6:49am
Msg #10586

The Lady in Red, blatantly corrected her Popsie by spouting: "I believe that is only if it is a streamline loan where they are not getting cash out, just refinancing to get a lower interest rate."

Yes, I guess I should have been more clear and said, "with restrictions". (That's a common phrased used all too often by lenders.)

And, there is a very large "gray" area when refinancing a current mortgage with the same lender, as to whether or not it qualifies as a "streamline". Many lenders include any refinance within the past 8 years or so, as a streamline since they usually don't do a full loan application nor a title search. The laws governing whether or not a loan qualifies as a streamline is very vague (from what I've been told).

Reply by Ted_MI on 10/29/04 1:36pm
Msg #10632

Paul,

To try to expand upon what you have stated, you have indicated that the right of rescission is not available if the house in question is not a primary residence. In the next paragraph, you indicated that there does exist a right of rescission if the owners are taking out a home equity loan. That is true if the residence is the primary residence. Just handled a HELOC involving a secondary home - no right of rescission.

Not trying to nitpick - just trying to clarify.

Reply by HisHughness on 10/27/04 8:53pm
Msg #10580

Barbara / CA notes:

***Actually the seal is for when the borrower is a Corporation.

I have to differ. There may be states where signatures under seal apply only to corporations, but I have reservations about that.

The (seal) or "l/s" after a name has nothing to do with the corporate status of the signatory. It is a device that, depending on the state law, will extend the statute of limitations for a contractual transaction and/or eliminate the need for mutual consideration to validate a transaction.