Posted by CTNotary on 3/11/05 4:27pm
Msg #25019

Purchase loans

Can notaries in all states do signings for purchase loans?

Reply by Anonymous on 3/11/05 6:39pm
Msg #25031

I don't know about other states, but they can in MA.

Reply by HisHughness on 3/11/05 7:16pm
Msg #25035

In Texas, HELOCs and purchase loans must be done in the lender's office, or the office of a title company or an attorney, unless they involve out of state properties. Surprisingly, reverse mortgages can be done at the borrower's kitchen table.

Reply by ColleenCA on 3/11/05 7:28pm
Msg #25038

Re: Purchase loans- Hugh, just curious

Might I ask the reason HELOC's and purchase loans are not allowed outside of a lender, title or attorney's office but reverse mortgages are? It just sounds so strange. Thanks.

Reply by HisHughness on 3/11/05 9:00pm
Msg #25051

Re: Purchase loans- Hugh, just curious

ColleenCA puzzles:

***Might I ask the reason HELOC's and purchase loans are not allowed outside of a lender, title or attorney's office but reverse mortgages are? It just sounds so strange.***

I can't answer that question. As has been noted many times before, anyone who respects either laws or sausage should never see either being made. The history is that Texas, in a perfect example of the nanny state, for long years refused to let anyone borrow against the equity in their home. That changed about 10 years ago. The prohibition on HELOCs and purchase loans probably stems from the same mindset: Lawmakers wanted to be sure that some fast-talking con artist did not sign up gullible homeowners with shady loans, and figured that requiring that they be completed in the aforementioned venues was a safeguard. Reverse mortgages, as a fairly new creature, were very possibly not part of the mix when changes to loan laws were being enacted, and thus were not covered. Also, extensive pre-loan counseling is required for a RM; that may have something to do with the different approach. As a practical matter, when I do a restricted closing, I pay a lawyer $25 to use his conference room; the lawyer is totally unassociated with the closing, so it is no safeguard at all.

I did a Chase HELOC this afternoon at a branch office. It was like an early Christmas gift; four notarizations, about 30 pages of documents, stickers in various colors to notate who and where to sign. Thirty minutes. And of top of that, a really attractive bank manager who was almost enough to make me ignore my ban on younger women. Please, God, send me four such closings a day.

Reply by BrendaTX on 3/12/05 5:15pm
Msg #25161

Re: Purchase loans- Hugh, just curious

Hugh said: "I pay a lawyer $25 to use his conference room; the lawyer is totally unassociated with the closing, so it is no safeguard at all."

I was not going to say anything about that but since you brought it up...I wonder about it and if it is within the "spirit" of the law. I do not take these from SSs unless I get hung into them without knowing it up front. After that, the SS will not get one by me.

I *will* do them in the lender branch, or a title company which has a working relationship with another title company and gets me in to do them. I do not pay the $25 myself to be reimbursed down the road by those that hire me. The room rental must be gotten from the other title company sending me in there.

I refer signing companies to the lawyer here in town who does them in his office and I know he gets more than I do to close them. I figure he's sent me enough work to offset what I have lost.

I surmise that you have more latitude because at least you have been licensed as an attorney so IMHO you give more credibility to the act of closing HELOCs in rented rooms of a title company.

Reply by HisHughness on 3/12/05 5:35pm
Msg #25164

Re: Purchase loans- Hugh, just curious

Brenda observed:

***Hugh said: "I pay a lawyer $25 to use his conference room; the lawyer is totally unassociated with the closing, so it is no safeguard at all."

I was not going to say anything about that but since you brought it up...I wonder about it and if it is within the "spirit" of the law. I do not take these from SSs unless I get hung into them without knowing it up front. After that, the SS will not get one by me.***

I feel little if any compulsion to operate within the "spirit" of a law that so substantially differs from the practice in a large, large majority of the states, especially one that in my experience has done nothing to contribute to the evil it is supposed to avert. I have closed loans in title company offices, lender offices, and attorney offices in which the occupants of those offices WERE involved in the loan. In none of those instances has the venue of the closing in any way contributed to protection of the borrower. In almost every case, in fact, I was alone with the borrowers. I do believe that I am required to abide by the letter of the law, and I do.

I have done only a couple of purchase loans, and would feel uncomfortable closing one of those anywhere, even with a title/lender representative present, though I might feel more comfortable with an attorney at the table.

The "spirit of the law" often is the spirit injected into the legislative process by the lobbyist with the biggest checkbook or the handiest liquor cabinet.

Reply by BrendaTX on 3/12/05 5:41pm
Msg #25166

One of the great things about our friendship Hugh...

We can agree to disagree.

Reply by HisHughness on 3/12/05 6:11pm
Msg #25171

Re: One of the great things about our friendship Hugh...

Brenda schmoozes that one of the great things about our friendship is that ***We can agree to disagree.***

That has nothing to do with it, BrenBren. I know you're a widow, and somebody recently told me you're negotiating to buy a liquor store.

Reply by BrendaTX on 3/12/05 6:47pm
Msg #25176

Yep...and I plan to call it

Hugh's Fine Juice and Bait Store

Reply by BrendaTX on 3/12/05 4:45pm
Msg #25160

Texas Constitution Art 16, Section 50

Colleen's question: "Might I ask the reason HELOC's and purchase loans are not allowed outside of a lender, title or attorney's office but reverse mortgages are? It just sounds so strange. Thanks."

The best answer that can be given is because it says so in the Texas Constitution in Article 16 Section 50 - entitled "HOMESTEAD; PROTECTION FROM FORCED SALE; MORTGAGES, TRUST DEEDS, AND LIENS."

From reading the Texas Constitution, it is my understanding that a reverse mortgage has protections against foreclosure that other types of liens do not have.

http://www.capitol.state.tx.us/txconst/sections/cn001600-005000.html

Reply by Debbie/NJ on 3/12/05 5:10am
Msg #25077

From what I understand, Signing Agents in New Jersey cannot do purchase loans. However, we can do HELOC and refinances in the borrower's home. If this is wrong, could someone from NJ please let me know.

Reply by CTNotary on 3/12/05 1:22pm
Msg #25135

Thank you for your replies. The reason I ask is because I have been asked to do a signing here in CT which will include a first and second mortgage. This does not necessarily mean it is a purchse loan, correct? It could just mean a borrower is refinancing their 1st mortgage and getting a 2nd, correct? All signings I have done until now have been refinances or HELOCS alone so that is why this one makes me a little nervous.

Reply by PAW_Fl on 3/12/05 1:30pm
Msg #25138

Yep, you're right. 1st and 2nd mean only that. It's a first position loan and 2nd position loan. They may be refinancing only the first and getting a second, which may be a HELOC, or they are refinancing both their first and second. Lot's of different scenarios, none of which would imply a purchase.

Reply by Bobbi in CT on 3/12/05 1:48pm
Msg #25139

Not purchase ...

Doing a full refinance with the first,
get a "free" HELOC or second mortgage from the lender if both are signed at the same time.

Only difference is it takes longer at the table.

Also, you will probably see something in one of the packages that if the borrowers rescind on the first, the lender is NOT obligated to give them the second.

Sometimes borrowers don't have cash to bring to the table for first (which is usually 80% LTV) or don't want mortgage insurance. Second gives cash out, eliminates mortgage insurance issue on the first, and makes the first a better priced saleable loan.

Paperwork will be familiar. Just two deals signed at once.

Reply by Bobbi in CT on 3/12/05 9:46am
Msg #25105

Are you familiar with how CT purchases work?

Money and keys exchange hands at the signing table. Wires/certified checks are exchanged for deposit into escrow or trust account, all checks listed on settlement statement are distributed at the table. Purchasers attorney immediately does title bring down, records deed, and issues title insurance policy. Sellers attorney (using check issued from escrow account) immediately sends out mortgage and lien payoffs.

The CT Bar Association's opinion is that if YOU are handling money and distributing checks for a real property sale or purchase, you must be an attorney or a title insurance company or it's UPL.

If NO money changes hands, if you are simply "just pointing and signing", taking in one check (or it's a closing "in escrow" with no money changing hands until a third party has all documents and checks) payable to escrow agent and dropping the package and checkl in a FedEx envelope or at a title company's office, I PERSONALLY think you may be just skirting the edge of UPL. This is only a PERSONAL opinon and I Could Be Very WRONG ... only a CT UPL case on this issue will determine where the line is.

I have seen it done for Florida, Nevada, Mass. timeshare and condo purchases - a package of documents to be signed by buyer and the buyer takes everything away to include a certified check and ship it out to the management company, who in turn with turn over funds to the seller. It is tradition that purchaser's have personal attorney representation for a real property purchase (many issues and a big investment). I have seen where seller's waive personal representation and have the purchaser's attorney "prepare all necessary documents without personal representation". You would need to check with some of the national title companies with CT offices to see if they are handing purchases without non-staff attorneys present.