Posted by BrendaTX on 5/1/05 8:32pm
Msg #35211

Lots of Backdating Talk...What's the point?

Just want to hear why those smarter than I think that we are occasionally asked to back date.

Before anyone gets their britches in a wad, I don't do it. Period.

However, what is the sinister purpose of it?

Anyone?

Reply by ColleenCA on 5/1/05 9:19pm
Msg #35216

My guess would be, that if it is the borrowers request that it would reflect the fact that they couldn't sign in a timely manner for the loan to close on time, so backdating would make the funding effective at the original closing date. If the lender is asking, I would wonder if it had something to do with the RTC, but that would really be putting their reputation on the line never mind their legal responsibilities. Just my humble opinion.

Reply by ERNA_CA on 5/1/05 10:01pm
Msg #35219

Could have something to do with the intrest rate beiing locked until a certain date?????

Reply by BrendaTX on 5/1/05 10:07pm
Msg #35221

I'm interested in learning...just wanted to know what others think. The interest rate/RTC was my guess also.

Reply by Joan-OH on 5/1/05 10:10pm
Msg #35222

Brokers/Lenders

I am willing to be 99% of the time it is because the brokers and lenders can't get their docs out or get their stuff together to get it done by the end of the month. I have never been asked to backdate in the middle of the month. They can't get their docs out, schedule their borrowers or haven't even sold their loan before the 4th day before the end of the month - so they ask us to back date so they can get their almighty dollar.

Their failures are not my problem. Just say NO!

Reply by BrendaTX on 5/1/05 10:30pm
Msg #35226

Re: Brokers/Lenders

So, actually, in this case, it is so they can get their money sooner. (?)

Reply by Joan-OH on 5/1/05 10:34pm
Msg #35228

Re: Brokers/Lenders

99% of the time, that is what I think happens. I have NEVER had a title company ask me to backdate. I always get a personal call from the Broker or Loan Officer. I've had them scheduled the last signing day of the month. The loan is wrong, borrowers won't sign. Next day they want to send new docs with yesterday's date. Has absolutley NOTHING to do with rate lock expiration. They just aren't doing their job right and want us to fix it for them.

No Way!

Reply by ERNA_CA on 5/1/05 10:36pm
Msg #35231

Re: Brokers/Lenders

I know that loan officers and closers at Title companies get a bonus based on files processed per month. Cut off probably the last day of the month. I dont know how it works for lenders and brokers.

Reply by ERNA_CA on 5/1/05 10:40pm
Msg #35232

Re: Brokers/Lenders. Escrow officers I ment to say.

Reply by BrendaTX on 5/1/05 10:51pm
Msg #35236

Very interesting, Erna. Thanks. n/m

Reply by PA Notary II on 5/2/05 9:40am
Msg #35271

Re: Very interesting, Erna. Thanks. n/m

From my experience, the LO's are paid on a sort of sliding commission. i.e. 30% commission up to $10,000 in fees....40% on fees exceeding $10,000...50% on fees exceeding $20,000.

Assume a $3,000 commissionable fee...40%=$1200...50%=$1500.

When their commission is higher, they will do most anything to get a deal closed by the end of the month (last day to close & fund). From the git-go all my clients know not to even ask me to backdate. Luckily, I work with great people who would never think of asking.

Reply by BrendaTX on 5/1/05 10:32pm
Msg #35227

I've had the borrowers...

call and ask me for this.

"I'm the one signing the documents! Why can't you do it for ME.?"

Answer: Doesn't matter who I am doing it for, if it's the 30th, that's the day I have to put on the notary certificate of the documents.

Reply by Melody on 5/2/05 3:34pm
Msg #35357

Joan has it right + Tiered bonuses

In addition to Joan's correct statement:

Most lenders will give their LOs tiered bonuses.

For example:
If they close $500,000 in one month, their bonus is $x
If they close $625,000 in one month, their bonus is $y (higher than x)
If they close $750,000 in one month, their bonus is $z (higher than y)

If a LO is just under a tiers, he will push extra hard for backdating to get that extra loan to put him into the next level. Going into the next level could get the LO another $1k or more.

Backdating requests are all about greed.

They could care less that we are putting our commissions and personal assets on the line when we knowingly break the law.

Reply by PAW_Fl on 5/1/05 10:35pm
Msg #35230

From my experience, the biggest issue is the settlement date would need to be changed. This could upset payoffs, per diem interest, pre-paid interest (especially if the first payment due date needs to be extended to the next month). Some loans have the "hardship" notice included which allows for extending the settlement date, but keeping the due date even though it is within 30 days of settlement.

I have also found that typically, lenders will "forgive" a few days interest in the beginning of a month, but not much past the 3rd or 4th day.

Of course, there is is the issue of the "effective" date of the documents may need to change as well as "document dates".

Without backdating, quite often docs would need to be redrawn due to issues mentioned above. This also may place an additional fee to the borrower as a closing cost since the fee is quite often not absorbed by the lender or title company.

Reply by BrendaTX on 5/1/05 10:50pm
Msg #35235

PAW-FL: Is this your *final* answer??

Just kidding.



This is the kind of info I am always interested in learning. Thanks.

Reply by PAW_Fl on 5/1/05 11:20pm
Msg #35241

Re: PAW-FL: Is this your *final* answer?? No ...

The ramifications on date sensitive closing documents is very widespread. Not counting the "effective" date issue, RTC, and other issues already mentioned in this thread, just look at the charges as shown on the HUD that are date sensitive. This will give you an idea of the things that may need recalculating, new payoff quotes, rewriting of policies and binders, etc.

It is just so much simpler to date the docs the date that everything was planned for than to rework them. And that rework is an orchestrated effort of the closing department of the title company and the lender. And sometimes the orchestration strikes a sour note (pun intended).

Reply by DSE/CA on 5/2/05 9:52am
Msg #35272

Re: PAW-FL: Is this your *final* answer?? No ...

Maybe, because in California ,we are officers of the State and are required to follow the law?

Reply by BrendaTX on 5/2/05 11:16am
Msg #35282

DSE

**Maybe, because in California ,we are officers of the State and are required to follow the law?**

What question are you answering?

Reply by As of May 2, 2004 FL on 5/2/05 10:04am
Msg #35274

Backdating

Loan docs often do have an "as of " date that is different from the date of signing. For example, a mortgage can have an effective date of say 4/30, but be signed on 5/2. There is nothing illegal or sinister about it as many of you paper shufflers declare (I find the I just say "no" responses amusing as evidence of the state of ignorance of many). Prorations can be as of the effective date, the RTC would be the actual date of signing as would signature lines and notary jurats and acknowledgments (yet again the "as of " date can be different). In addition, an assertion of "widespread ramifications" from a post is an over generalization at best.

Reply by MaggieMae_CA on 5/2/05 11:30am
Msg #35287

Re: Backdating

Contrary to popular belief... Mr. Backdating here is correct... A document can have any date on it, but the date of the notorial act must be the actual date the notary witnesses the signature.

Reply by BrendaTX on 5/2/05 12:01pm
Msg #35305

Re: Backdating

*Contrary to popular belief... Mr. Backdating here is correct... A document can have any date on it, but the date of the notorial act must be the actual date the notary witnesses the signature.*

Yes, MaggieMae...agreed for the most part except as stated below regarding Acks...Therefore my question as to why the pressure to back date...just curious about "Why?" And, I think Paul's explanation covers it for the most part.

----
For reference, Tx notaries can take an acknowledgement after the document is signed...From Tx SOS statement in the educational materials:

WHAT IF THERE IS A DIFFERENCE BETWEEN THE DATE THE INSTRUMENT IS SIGNED AND THE DATE THE ACKNOWLEDGMENT IS ACTUALLY TAKEN?

To answer this question, an example is given. If an instrument ends with the wording: "Signed and executed at Tyler, Smith County, Texas, this 25th day of October, 2001," and the party whose name appears on such instrument appears before the Notary Public on October 27th, 2001, the Notary Public would fill in the acknowledgment with the true and correct date when the signer personally appeared before the Notary Public.

Reply by PAW_Fl on 5/2/05 12:36pm
Msg #35316

Re: The question is WHY do "they" ask us to backdate.

There are many varied reasons why we are asked to backdate, and I suggest that most of them have been discussed in this thread. No one is denying that some documents are not date sensitive and therefore the signing date isn't critical. Also, I do think we're all in agreement that the notary certificate are ALWAYS dated for the date the notarization takes place. Just as the signers of the documents, if asked to date their signatures, should use the current date as well.

Reply by Joan-OH on 5/2/05 11:41am
Msg #35291

Re: Backdating

I agree, not all document sets are date sensitive. What notaries should "just say no" to is when they call you on April 28th asking you to go out and notarize for April 27th.

Hope this "paper shuffler" amuses you for today and I must be one because I responded as "just say no" - to backdating your notary certificates that is.

Joan-OH

Reply by PAW_Fl on 5/2/05 12:25pm
Msg #35312

Re: Backdating

Well "As of May 2, 2004 FL", I'll tell you what... In response to your thinking that "'widespread ramifications' from a post is an over generalization at best", meet me at the Amscot Financial Center on May 30th and I will let you ask some mortgage loan officers, loan processors, escrow officers, title processors, closing processors and closing agents about what the ramifications are if the dates on the documents need to be changed.

Reply by As of May 2, 2004 FL on 5/2/05 1:13pm
Msg #35324

Re: Backdating

"Amscot"..what about real banks (Wachovia, Fifth Third, LaSalle, GE Capital, etc). From personal experience, in all aspects of the transaction, there are no "widespread ramifications" if that is how the deal is closed

Reply by PAW_Fl on 5/2/05 2:06pm
Msg #35336

Re: Backdating

Don't read into what I wrote. I said to meet me at the Amscot Financial Center. I didn't say anything about Amscot being the lender (which, btw, they are not).

And we're not talking about a closed deal. We are talking about trying to get a deal closed and the ramifications around changing the closing and settlement dates.


BTW, I did err when I said to meet me on May 30th. I meant to say May 31st (even though I probably will be closing deals on the 30th!).

Reply by Polly_CA on 5/2/05 3:07pm
Msg #35354

Its all about money. Backdating brings the funding date closer. I heard an LO saying that because I wouldnt backdate the loan wouldnt fund for another week, he was a little ticked about that.