Posted by Charles_CA on 9/15/05 5:20pm
Msg #65470

Wow, a loan package I got today had an allonge in it!

Talk about globalization. I don't know why the company used an allonge because they are a domestic corporation but there it was. An allonge is frequently used in countries where Code Napoleon is the law. I have never seen it before in a country where British common law is the basis. For those who may not know, an allonge (from the French word allonger: to make longer) is an addemdum or rider to a document often used where there is not enough room for all signatories. British common law allows execution anywhere on the document. I just found it curious.

Reply by Giselle_CA on 9/15/05 5:24pm
Msg #65471

Thanks for the education, Charles. I found this: A paper attached to a negotiable instrument to enable writing endorsements when the back of the bill is full. An allonge is rare because bills of exchange are no longer very common.

Reply by Charles_CA on 9/15/05 5:29pm
Msg #65475

The pleasure is all mine, Giselle, Glad to find someone

else who enjoys learning more about the biz.

Best regards,
Charles

Reply by Charles_CA on 9/15/05 5:36pm
Msg #65477

I just had to add this and share it with you.

I had a friend of mine who perplexed a lot of people. In grade school the teacher would write a word on the blackboard and nobody really cared much but this friend of mine would take the word and write it down, then she would write down the definition of the word and then write a paragraph using the word in several different ways. No one told her to do it, the teacher never said anything about the word, my friend was just curious. She went on to get a scholarship at a prestigious Ivy League school and is now managing editor of a major publication making a ton of money doing what she always enjoyed, messing around with the English language.

Reply by Giselle_CA on 9/15/05 5:44pm
Msg #65480

Re: I just had to add this and share it with you.

You find many people educating themselves because they feel they have to. Very rare you find someone doing the same for pleasure. Those are the true geniuses IMO.

Reply by Marlene_USNA on 9/16/05 9:14am
Msg #65655

My childhood friend used to read the dictionary for fun. . .

. . .she is also making bazillions today because of where her curiosity and thirst to know took her. Makes me regret all those hours I spent playing kickball in the neighborhood instead of reading the dictionary.

Reply by Iris_WA on 9/15/05 5:39pm
Msg #65479

Had an allonge once in 1,100 signings. Best as I can recall, the EO simply explained it to me, saying "It's an addendum."

Reply by CA_Jeanet on 9/15/05 6:03pm
Msg #65487

I had one last month. Seems docs are constantly changing and some just redundant.

Reply by Teasa Mahar on 9/15/05 6:25pm
Msg #65494

Beat me if you will but my interpretation is:

That an allonge is used in conjuction with an consolidation/modification of mortgage, in which the note is being allongated from the original amt., rate, years to a new amount , rate and years of the original note. Difference of principal balance owed on old note to new loan amount (new $). Beat away. If you saw it in different context what was it.

Reply by TitleGalCA on 9/15/05 6:35pm
Msg #65501

Re: Beat me if you will but my interpretation is:

Teasa, that's my understanding of an allonge too. Now tho, they call it a "modification" (sounds less scary). I've seen it in commercial transactions, but not residential.

Reply by Barry Silver on 9/15/05 6:25pm
Msg #65495

Now this is the kind of information I like to see. I like to learn something new in this business.

Thank you.

Reply by Marie_MD on 9/15/05 7:26pm
Msg #65516

I've had several allonges, I want online to find the meaning. Webtsters says it is an attachment and comes from the French to attach

Reply by MagicLadyCA on 9/15/05 8:52pm
Msg #65562

Thank you, Charles. I have had 2 or 3 in the last few months. Didn't really know what it was until I looked it up. In all my years of banking, I had never heard of it before!!

Reply by PAW_Fl on 9/15/05 8:59pm
Msg #65568

"Allonge to Note" is a fairly common addendum especially used by Correspondent Lenders (lenders that do not service the mortgage, such as United Home Savings). The Allonge is attached to the note when the note is sold. It usually has a statement like "Pay to the order of such-n-such lender without recourse." You may also find allonges with loan modifications, such as changing the payment amounts or interest rate. Most packages that we see, do not include the allonge, but sometimes, especially when the loan has been sold by the correspondent lender before the signing, it will be included in the docs. It doesn't require borrowers or notary signatures at the time of signing. It is for post settlement when the note is actually transferred to the buyer.

Reply by Renee Kovacs on 9/16/05 4:54am
Msg #65630

Allonges are signed by the Correspondent Lender, which is in effect signing off the Note much as you would endorse a check over to another party, as Paul describes. A Correspondent lender is a Mtg Banker (as opposed to Broker) who is closing the loan in his name, funding the loan at the table, but selling to another Lender within a pre-arranged agreement. There are different guidelines affecting each (Banker/Broker) and primarily it is the profit margin, of course.

A Mtg. Broker sells the loan 'at the table' - not his docs, not in his name, not with his money.
A Mtg. Banker closes in his name, on his docs, with his money - but has already shown the loan file to the purchasing lender, who has committed to buying that loan immediately upon receiving/auditing the closed docs.

Since the Allonge is a doc that will be needed, it often prints as part of the entire package - and with the advent of e-docs, we often see items intended for future use.

Reply by Teasa Mahar on 9/16/05 9:22am
Msg #65656

You just have to love PAW.....

There is just about nothing he doesn't know. Really.

Reply by TitleGalCA on 9/16/05 11:41am
Msg #65677

Question for Renee/PAW

Renee, as usual, your experience in the loan industry is invaluable. A simple, easy to understand explanation of the document.

I've personally only seen them a few times...and can't remember if it gets recorded. By the explanations here...it sounds quite like an assignment of a deed of trust (that we use here in CA alot) so my question is, does the Allonge get recorded or do they do a formal assignment document? My guess is they don't record it as I saw a post where there's no place for notarization? (correct me if I mis-read the thread) but how else would the transfer the beneficial interest to the Mtg. Banker and make it of record?

Reply by PAW_Fl on 9/16/05 12:26pm
Msg #65688

Re: Question for Renee/PAW

Allonges typically do not get recorded since they are an addendum to the note and notes typically are not recorded. What you often do see, but not always, is in MERS where the transfer of the mortgage takes place. Again, this is not recorded as the mortgage (or DOT) usually has the words "and assigns" which allows transfers to occur outside of the recording of the document.

Reply by TitleGalCA on 9/16/05 12:31pm
Msg #65691

Right, PAW...forgot about MERS

MERS is always an irritation for me every day or so...hunting and pecking through a document for the REAL beneficiary for writing a loan policy.

(What's wrong with my brain - must be the drugs)