Posted by Anonymous on 11/25/05 8:34pm
Msg #78673

Anon for this one - Balloon Note

I have a signing tomorrow for an elderly individual. I am reviewing the docs and can not help but think something is not right; for I have never seen this before.

TIL shows
APR - 8.8
Fin Chg - 333,216.69
Amt Fin - 141,886.90
Total - 475,103.59

30 years of payments 1077.04
Balloon payment of 88,446.23

My question is why would someone elderly do this when cash back to borrower is only a little under $6,000

Reply by Art_MD on 11/25/05 8:55pm
Msg #78676

Without the particulars, its hard to say. Was this a refi? how much was old mortgage? What was previous rate? What were previous payments? Are they paying off bills whose payments + old mortgage payment totaled more than the $1077 ?

Ballon payment will be the worry of their heirs.

Art

Reply by Roger_OH on 11/25/05 9:03pm
Msg #78679

Loan terms are not for you to question/comment, pass judgement upon, or otherwise be concerned about. You're there to confirm ID, witness signatures, notarize properly, and send docs back in your capacity as a notary signing agent. Period.

Reply by GEN_LEE on 11/25/05 9:12pm
Msg #78683

Roger,
I disagree with you and I agree with you. I agree that it is not the NSA's job to pass judgement or to comment on; however, a good NSA should be able to explain these types of loans to the consumer. I feel that when a NSA has to keep calling the title co or loan officer, it looks bad on the NSA. - especially when it is for a simple question....Maybe thats why signing services/title companies are reducing fees paid to NSA's.

Reply by Kyle Ledgard on 11/25/05 9:32pm
Msg #78685

I don't know about you Gen_Lee but it's not our business to decide whether or not the terms are good or if concern ourselves with whether or not they will be able to make the payments. Our job is to explain the document, answer for the borrower what each document they are signing means and make sure there is proper identification.

Reply by GEN_LEE on 11/25/05 9:36pm
Msg #78687

kyle, when a borrower asks you why the note rate is different from the APR do you stop and call the L.O.?

Reply by Kyle Ledgard on 11/26/05 12:26am
Msg #78714

I think the borrower should have a general knowledge about what they are getting themselves into ahead of time. As I said, if the question pertains to the loans docs, an area you have been trained, explain away. The actual terms and payments are not for us to concern us with. I guess I'm really speaking to Anon who posted the terms and seems so upset with the terms.

Reply by BarbaraL_CA on 11/25/05 9:35pm
Msg #78686

I have to agree with Roger, and I agree with GenLee in that you can "explain" the loan by pointing out that "... this is your monthly payment amount for xxx months, and this is your payment amount at the end of the loan (or after xxx months)..." You CAN NOT explain why there is a balloon payment.

Reply by Roger_OH on 11/25/05 11:25pm
Msg #78711

Right Barb - I should have clarified.... n/m

Reply by patricia on 11/26/05 4:31pm
Msg #78748

the explaination for the balloon payment is quite simple, the monthly payments are not enough to pay off the loan, therefore there is a balloon payment. If the borrower wants the payments to fully amortize the loan they will have to make a higher payment and they would have to speak with the loan officer about that.

Reply by CarolynCO on 11/27/05 9:53am
Msg #78792

Re: Gen_Lee Huh?

IMO, the original poster was posting out of their own curiosity and not in the terms of explaining something to the Borrowers. When reading the original post, the thought of calling the TC or LO didn't even enter my mind, whether in the review of the docs or at the table with Borrowers.

Reply by Joe_PA on 11/26/05 2:05pm
Msg #78738

Roger is right on with a very little deviation.
Funny thing is on Wednesday Night I had a closing where the borrower and myself had to sign a disclaimer that I am a notary and in no capacity able to explain anything in the paper. My position is witness and notarise the documents. If there are any question the borrower is to call teh lender (phone number supplied)

This disclaimer was part of the pacakage. I never saw one of these before

Reply by Lee/AR on 11/25/05 9:43pm
Msg #78689

Don't know the answer to your ONLY question. Maybe because they don't like their kids, ya' think?? I'm sure Anonymous already knows what everyone else posted about "ours is not to question why; ours is but to let the ink dry". That's why it was an 'Anonymous' posting, OK?

Reply by Glenn Strickler on 11/26/05 11:26am
Msg #78725

I have seen quite a few loans where senior citizens are doing refi's to pay credit card debt, then aggreeing to terms to actually lower their monthly house payment while essentilly sticking to their heirs. (Quite honestly, I am spending my childrens inheritance now as they got theirs already when I paid for their 4 years of college each). This gets rid of all their credit card debt that they may have run up and just leaves them with living expenses and frees up a lot of their retirement income so they can enjoy the final years of their life.
However, you can only think that, you can't engage in any conversation with the borrowor that would border on attorney work. Explaining documents is not our privilege. Showing them where answers are written in the documents is as far as we go.
The borrowors know what they are doing for the most part. They are putting off their financial problems until after their death.

Reply by BrendaTx on 11/26/05 11:48am
Msg #78727

I recognize that it's not our job to know anything except what is in black and white .

However, sometimes I get a package and starting being curious. I would never attempt to influence a bwr. But, I am looking at this and wondering why also. Not so I can tell the Bwr something or so I can call the loan officer or title company to fix something, I would just like to know the logic...or if it is a lender's chance at low-hanging fruit.

Of course, it is probably best to answer as the ones in this thread have so as not to give any idea to posterity that we had any involvement in the loan product at all. Yet...it's awful tempting to ask, but you know that all your friends will tell you it's not your bizwax...guilty of it myself.

Reply by Anonymous on 11/26/05 10:42pm
Msg #78775

Judgement

You are not a robot. Judge apply judement, police apply judgement, parents apply judgement and notaries should apply judgement. The Federal Reservce Chairman uses moralsuasion. Is the person compotent to sign? Do they understand what they are signing?

Then you can always stress! Consult an attorney. Consult you tax professional. Do you have a relative that might be able to assist you?

Otherwise, you the notary are just a pawn when a zealous mortgage banker finds someone that does not understand what they are doing. If you can live with that, then go ahead and sell your soul for $50bucks or perhaps you feel better if you sell it for $100!

Reply by GEN_LEE on 11/27/05 10:02am
Msg #78793

Re: Anon for this one - Balloon Note UPDATE

I am the original anon poster....i hated to do post anon, but did not want mr./mrs. borrower to stumble upon this site and see her loan info posted on the web... At any rate, I arrived at the signing prepared for the signing. I immediately noticed that mr borrower was not there. Come to find out, he's been deceased for xx years. This was a problem....all docs were in his and her name. I just had this gut feeling that she was not going to be happy with the loan terms either...she wasn't. I thought I was going to have to do CPR on her when she found out how much her balloon payment was. Also, her lock-in rate was way above what the LO told her. Needless to say, this was a no sign. I just knew something was not right!

Reply by srnotary_CA on 11/27/05 10:23am
Msg #78797

Re: Anon for this one - Balloon Note UPDATE

I had a similar signing that was cancelled at the table the other night. With the balloon payments and rates and monthly payments not being right. Plus one of the signers didn't have proper ID. I am just glad they looked through the docs before getting the two credible witnesses.

Reply by CarolynCO on 11/27/05 2:18pm
Msg #78821

Re: Anon for this one - Balloon Note UPDATE

In your initial call, Mrs. Borrower didn't tell you at that time that there wasn't a Mr. Borrower?

As for your initial concern, I never try to interpret the why's of the loan beforehand. That's not the purpose for me being at the signing. I know there have been many signings, loan and annuity, that I've been quite upset with after the signing, because I felt the Borrowers were getting the short end of the stick, but I never commented my feelings to the Borrowers.