Posted by Kath_CA on 4/11/05 6:15pm
Msg #31011

Loan Officer & the notary

Iwas asked this question and am going to ask my SOS but wanted to pass it by all of you. Do you see any problem with a person being the Loan Officer (taking the application) for a loan and then at the end of the process, returning to the borrower's to do the signing if they are also a notary?? Ethically, legally???

Reply by Ernest_CT on 4/11/05 6:19pm
Msg #31015

I'd have a huge problem with that, but ...

... it's not up to us. You're doing the best thing by contacting your SoS, especially if you've got the LO's name. (heh, heh, heh.)

Reply by Nicole_NCali on 4/11/05 6:27pm
Msg #31020

Re: I'd have a huge problem with that, but ...

yes it is an ethics issue with a LO closing their own loan. It is not unheard of but most LO don't want to be bothered with the actual siging. I do closings for 2 of my friends who are LO and they make more off the loan that the closing is like a pittance and a waste of their time.

Reply by Kath_CA on 4/11/05 6:42pm
Msg #31024

I'll have to research the answer because...

RE agents can act as notaries for loan docs, but I'm not sure if they can do a loan for a deal they put together. I'll make the call. Thanks

Reply by JJ_CA on 4/11/05 6:48pm
Msg #31026

Re: I'll have to research the answer because...

Normally, if you are benefiting from the transaction (that is, originating the loan) then you are not allowed to notarize the docs but it is not illegal if the lender is ok with it. Afterall, they are the ones with the biggest risk and I am sure they know what is legal.

Reply by Nd_WA on 4/11/05 7:23pm
Msg #31029

Conflict of interest

The LO can not notarize the loan as he/she has monetary interest in the transaction. This should be in the can and can not do section of the notary handbook, or I've read it some where.

Reply by BarbaraL_CA on 4/11/05 8:40pm
Msg #31049

CA Government Code 8224

§ 8224. Conflict of interest; financial or beneficial interest in transaction; exceptions
A notary public who has a direct financial or beneficial interest in a transaction shall not perform any notarial act in
connection with such transaction.
For purposes of this section, a notary public has a direct financial or beneficial interest in a transaction if the notary
public:
(a) With respect to a financial transaction, is named, individually, as a principal to the transaction.
(b) With respect to real property, is named, individually, as a grantor, grantee, mortgagor, mortgagee, trustor, trustee,
beneficiary, vendor, vendee, lessor, or lessee, to the transaction.
For purposes of this section, a notary public has no direct financial or beneficial interest in a transaction where the
notary public acts 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.

Reply by JCintheIE on 4/11/05 11:03pm
Msg #31066

Re: CA Government Code 8224

This brings up an interesting question (Interesting to me that is). Let's say a Real Estate Agent is married to a Notary/Signing Agent. Escrow Companies, Title, Companies, and Lenders (those who are not directly related to the RE Broker) market directly to RE agents because they are a big source of clients for them.

If the Notary/signing agent then gets the signing from the Escrow company handling the closing for the RE's transaction. Would that then be a conflict of interest with CA GC 8224?

Reply by BarbaraL_CA on 4/11/05 11:12pm
Msg #31067

Re: CA Government Code 8224

If the Notary/signing agent then gets the signing from the Escrow company handling the closing for the RE's transaction. Would that then be a conflict of interest with CA GC 8224?

I would say it is NOT a conflict of interest because the SA is not named in the documents and you are NOT the RE Agent.

Reply by Jon on 4/12/05 12:42am
Msg #31075

Re: I'll have to research the answer because...

It is not prohibited by Ca law. Personally, I would not make a practice of it due to the possible appearance of impropriety. Read the post below with Gov Code 8224.

Reply by Jon on 4/12/05 1:02am
Msg #31081

Should be post above.......n/m