Posted by TRG_wy on 4/20/06 9:33pm
Msg #114976

Attorney assisted closings - your thoughts

I was reading a few posts and I suddendly remembered Attorney Assisted Closings.
Is this a practice seen often elsewhere?

I've had a few over the years but Two things stick in my mind about them. 1. The attorney is just a seat warmer. Generally knows absolutely nothing about the documents and often will ask me questions. 2. They get paid three times what I do!

Reply by Janlee_MI on 4/20/06 10:24pm
Msg #114995

Most of the time they just caused problems

The title company I managed was owned by two attorneys and they knew very little about Title work or even closings. I was on a business trip and one attorney was to handle a closing for me. Well lets see, he had the borrower sign where the seller was to sign on the Hud. Forgot to have the seller sign the deed. He forgot to deposit the Funds into the Trust Account. (and that was just for starters.) It took me 3 weeks to clean up his mess from this closing and it was a purchase closing so what a night mare to fix. Never again did I let them do any closing or let them near the trust account.

Reply by ReneeK_MI on 4/21/06 3:44am
Msg #115031

Here in MI we have a large UAW representation, and the UAW provides their members with free atty review of mtg docs. These are normally sent to the atty the day prior to close, so that helps things at the actual signing - but they do put a lot of questions to the lenders, and the most frequently asked question?

"I found a problem - the rate on the Truth in Lending is higher than it should be, my client's Note says "x" and this Truth in Lending says "y", can you explain this?!"

Augh.

I think that most attys that attend closings are kind of between a rock and a hard spot. It's pretty mundane work for those who understand these docs, but it can be pretty intimidating for buyers/borrowers who don't. So, they hire an atty and of course that atty's time is valuable - there really aren't often a lot of questions they can dream up, but if they don't dream SOMETHING up, I can see where they would FEEL like seat-warmers, or at least feel that they might APPEAR as such. So maybe they ask lots of questions to show that they're really paying attention, and hoping to illustrate (usually with the jargon used) to borrowers what ill fates they've 'saved' them from. I think it can be a hard place for an atty, but pretty easy money when they can get it. Borrower's peace of mind has value, so I can empathize with these attys.

Reply by BrendaTx on 4/21/06 11:25pm
Msg #115252

They may ask many questions to make themselves at ease the notary is on the right track before they decide to "stand down" and leave it to the notary to get the job done.

There are many different types of law. I have an aunt who is a retired corporate environmental lawyer. Brilliant woman. What does she know about probate or family law? Nothing. Might as well ask her to do voodoo surgery on her client and pull out a liver or something. But, if she wanted to, or needed to, understand and explain a probate or family law document to someone she could easily to it. I feel that's what the law degree on the wall implies...that the smarts are there and can be tapped if necessary.

Sometimes by virtue of the law degree and passing the bar there are the privileges of doing less of the grunt work and being paid for one's presence.

Reply by TitleGalCA on 4/22/06 12:19am
Msg #115270

***Borrower's peace of mind has value, so I can empathize with these attys.***

This is because you are a lovely person, Renee.

I think the original question has a lot of merit. I am not fond of attorney states, simply by reason of this site and the comments/questions posted here, and some inside experience.

Sort of like hiring an attorney to do an entity filing here in California...an educated person (you) does a much better job than the "Attorney" who is nothing more than a figurehead.

Reply by Kevin/Ct on 4/21/06 6:37am
Msg #115034

If the attorney has been contracted to represent the lender, most often there has been much discussion between him and his client prior to the closing. The majority of the work performed by the attorney is done before the closing date, and his presence at the closing table is only the tip of the iceberg. If the notary is doing his/her job properly, he would have few questions to ask. You must have performed your duties properly.

Reply by TRG_wy on 4/21/06 8:45am
Msg #115067

I guess it makes a difference on location too. And I can see where it certainly "should" put the borrower at ease. It would me if I were in the dark as to the process and all those papers I am signing.

In all my cases, the attorney knew nothing about real estate papers at all. They were blind called and asked to attend the closing. It actually ended up being a learning experience for them.

I think what got me going on the subject was the fact that their fee was just automatically at least three times mine. I mean we both are professionals even though I just don't happen to have a law degree. And I know that they would never show up for a $50-65 closing.

Sometimes I feel like we are not fully appreciated for the knowledge we do bring to the process.

Reply by Julie/MI on 4/21/06 8:52am
Msg #115070

The attorney assisted is a joke, as it would APPEAR that the attorney is in
charge to benefit the borrower, when in fact they are hired by the lender for the lender. I think this give the impression to the mortgagor that things are hunky dorie because the attorney is there. Now if you contract with an attorney and they pay you well, just do it.

Way back in 2001, I had went to do an FHA loan and the young mortgagors had a lawyer there. The lawyer (I don't think real estate law was his specialty) and after getting confused over the apr, he used his attorney muscle and told them NOT to sign the 4506. This was a time I wish I could only raise one eyebrow as I really wanted to do that. Anyway, the loan didn't fund and the mortgagor called me back a few weeks later begging for me to reclose the loan.

Reply by Kevin/Ct on 4/21/06 11:21am
Msg #115099

In every instance in which I have been hired to represented a lender, I have always made it clear to the borrower that I do not represent him. I do not know of any other attorney in this area who would do otherwise. It would open the door to a potential suit for malpractice to do otherwise...not to mention ethics problems with which no attorney wants to involve himself. I think that you are making a snap judgment upon your observations at the closing table with little or no knowledge of what transpired between the attorney and his client prior to the closing.

Reply by ReneeK_MI on 4/21/06 4:02pm
Msg #115185

Re: Attorney assisted closings - 1 Major Distinction ...

Kevin, please don't take offense - I think the major distinction that needs to be made is that many of these observations posted are from MI, and we are not 'an attorney state' as they say. So, the experiences we have here are generally borrower-obtained attorney relationships, not lender-obtained. I would think it would make quite a difference in the experience at the table.

Reply by TitleGalCA on 4/22/06 12:50am
Msg #115277

Re: Attorney assisted closings - 1 Major Distinction ...

Renee, please consider:

***If the attorney has been contracted to represent the lender, most often there has been much discussion between him and his client prior to the closing.***

I am sure this is true...(eyeballs rolling into the next room) that attorneys are all about the clients.

Not to denigrate Kevin's post. Your's makes sense about the difference. Just call me a bit jaded about the whole attorney-assisted closing that Kevin supports. Okay I'm from California, so cut me some slack!

Don't watch my eyeballs rolling into the next room as you are far more qualified than I in these situations.

Reply by Kevin/Ct on 4/22/06 8:56am
Msg #115302

Re: Attorney assisted closings - 1 Major Distinction ...

Roll your eyeballs if you must. However, attorneys are required to be "all about their client".
It is called representing your client zealously within the bounds of the law. Failure to do so results in penalties...reprimand, censure and disbarment.