Posted by DonnanorthernCA on 6/19/05 6:24am
Msg #46002

to: itsme123

I went and read the post you were referring to and the instructions were obviously not for the SA, but rather for the closing agent. The problem I see is that occasionally we are referred to by some LOs and TCs as closing agents, due to their ignorance, so it could get confusing at times. However, as far as recording during the recission period, as they claim that it was stated, by anyone, would seem wrong in the least. There seem to be some, not all, LOs and TCs who either don't know what they are doing at times, or know and do it anyway.

Reply by InkWerk/CA on 6/19/05 7:58pm
Msg #46087

"However, as far as recording during the recission period, as they claim that it was stated, by anyone, would seem wrong in the least. There seem to be some, not all, LOs and TCs who either don't know what they are doing at times, or know and do it anyway."

Don't take this as a flame, but do you know that it is illegal?

What if a borrower mailed in the RTC on the first day of rescission and the lender did not get the cancellation notice until a week after the mortgage has been recorded (after rescission) because of slow mail delivery? That would mean they recorded after the borrower cancelled! I would think that the mere fact the borrower signed and agreed to the security instrument is enough to give public notice of that fact and allow for the lender to record the document even though there is a risk of recording after cancellation. The mortgage has been signed and agreed to, but federal law prohibits funds from being dispersed to the borrower until after the rescission period. In my opinion, the borrower consented to mortgage the home, public notice is given of that fact, funds are ready to go in escrow, and if the lender receives a notice to cancel (that was mailed within the 3 days), the lender has 20 days to release the security instrument that was given. It doesn't make a difference if the mortgage was recorded during the rescission period or after, the lender must release the security instrument under federal law. Of course most lenders do not put funds in escrow until after the rescission period, so if state law or title company policy indicates that funds must be in escrow prior to recording then you would have a problem in that state or with that insurer. But the lender could simply get around that problem by putting funds in escrow during the rescission period. I know here in California the term "closing" refers to the disbursement of funds at the close of escrow, but in other states they actually recognize "closing" as signing the documents at the table and is usually handled by an attorney. If an attorney closed the loan at the table, recorded the document the same day to give public notice of the security instruments execution, and then the lender or attorney dispersed funds after the rescission period (because of FDIC consumer protection
laws), would the attorney be committing an illegal act or was he holding funds until after the rescission period to abide by federal law?

The original somewhat off-topic discussion wasn't about whether it is a smart/dumb idea to record during the rescission period, only if it is illegal. Of course state laws vary across the nation so this discussion is in regards to federal law as it applies to the rescission period. I have been involved in real estate for many years and never had this question come up. It was an interesting question to me since I do not personally know of any federal laws that prohibit it. As for it being a moral issue it seem that federal law protects the consumer if they rescind so there is not much of a moral issue...at least that's my opinion.

Reply by DonnanorthernCA on 6/20/05 1:00am
Msg #46112

yes I do know it is illegal, that was what I meant by wrong, but unfortunately on these boards, well never mind I don't want to get into it.
and there are times when we as SA's question a lenders or TC's instructions because we know it is wrong or illegal, and they get pissed off that we don't carry out their illegal ways.

Reply by InkWerk/CA on 6/20/05 1:31pm
Msg #46173

I think I'm being misunderstood...I'll shut up now. N/M