Posted by Linda Spanski on 12/14/06 12:00pm
Msg #165905

borrower dishonesty: report or not?

Thanks to you all for sharing what you know. I've learned a lot! Here's an issue I haven't seen addressed before. How do you proceed when you know the borrower is fibbing? Examples: the loan is for a primary residence but the borrowers actually live elsewhere; or the borrower's vesting is unmarried but they mention they're married; or the company listed on their loan app says they're no longer employed there.

SSs generally don't seem to want to know. What do YOU do?

Reply by Signing_Doc on 12/14/06 12:15pm
Msg #165912

had this problem a short while ago...docs listed borrower as unmarried man...however, when I informed him that a certified check was needed for the package, he told me that he would have his "wife" get it and bring it to me in the morning. Also there were 2 or 3 children in the house at the time of the signing. So, in this situation, I completed the signing, but in the return package I placed a letter from me on my letterhead advising that the check wasn't available at the original time of signing, but that his "wife" was getting it for me. And I left it at that. I didn't offer my suspicions, just stated "facts" on the letter. About a week later, I was called to do a re sign at this same borrowers house, however I was already booked. It's not NECESSARILY a dishonesty...the borrower COULD have gotten married/divorced since the time of the original 1003. A lot of LO's are lazy and do not bother to verify if the borrower is married, and the borrower COULD have been let go from the company they WERE employed at since the time of the original 1003. So, don't assume. If you feel that there is something you need to address, just place a letter in with the documents and let them handle it. JMHO

"Doc"

Reply by ZeeCA on 12/14/06 12:19pm
Msg #165918

I know a lot of people refer to their husband/wife/ spouse and they are not married...just a term they use. and some have children w/o marriage or from prev.

and you cannot tell by a check as some women maintain their birthname.....

jmho

Reply by Charm_AL on 12/14/06 12:31pm
Msg #165924

I had a situation recently where the borrower was on the loan as single, when he said he was married, he also stated that he didn't want to go thru with it.
We are there to witness signatures. We cannot determine the truth. That is considered UPL.
You write what you think you know in a letter copy it for yourself, and send it with the file, also include same notes in your journal.

Reply by Susan Fischer on 12/14/06 12:18pm
Msg #165916

Are you checking employment?
Are you verifying status?
Are you verifying domicile?

My business is to verify to a reasonable certainty the ID of the borrower, and to witness the signing. I try to mind my own business.

Reply by CaliNotary on 12/14/06 12:22pm
Msg #165920

"or the company listed on their loan app says they're no longer employed there."

??? How would this situation occur?

There are some people who refer to their significant other as their husband or wife even though they've never gotten legally married.

The contents of the documents are not our concern. If the borrower directly tells you "this is wrong, this isn't my primary residence" or something along those lines, tell them to call their loan rep. If they don't tell you that it's wrong, don't make assumptions that it is.

Reply by Les_CO on 12/14/06 12:23pm
Msg #165921

I would remind the borrower that by signing some of the documents, they were 'swearing' to the correctness of the information. Under oath. If they swear to it, I don't question their word.

Reply by Julie/MI on 12/14/06 12:49pm
Msg #165928

It depends on the company I am working for.

As a former title gal, some of my clients want to know about title things such as marital status because the lien is not perfected if a non-borrower spouse does not sign and I am contracted by certain title companies that use me excluslively because they can count on me in matters other than being "just a notary". It a title company is issuing a title insurance policy based on incorrect information they may be liable for a claim.

As far as where someone sleeps or if they lost their job, that is up to the lender and will not effect my client who is the title company.

So if it effects title, I may butt in depending on whom my client is. If it's a lender issue, myob.

Reply by AngelinaAZ on 12/15/06 8:55am
Msg #166059

I will attack the employment/primary residence issue...

I don't worry about the content of the documents unless they are signing a jurat for that particular statement.

For instance.. if they have to swear according to a borrower's affidavit that it is their primary residence and their employment and financial status hasn't changed and I know a statement to be false... according the the State of Arizona I cannot notarize it. I cannot accept a sworn statement that I know to be false and that's all there is to it.

It's simple... I'm there to do a job... and part of the job is to NOT accept false sworn statements. I don't see a gray area here.

Incidentally... it might not matter to the LO if it is the primary residence or they lost their job... and it might not matter to the SS or even to the TC... but it darn sure will matter to the Underwriter and the AE... which is WHY that sworn statement is there on many loans.

Reply by Les_CO on 12/15/06 11:37am
Msg #166094

Re: I will attack the employment/primary residence issue...

Soooooo How do you know these things they are swearing to are false?

Reply by AngelinaAZ on 12/15/06 1:46pm
Msg #166106

Re: I will attack the employment/primary residence issue...

Most of the time I would never know. They swear and sign, I sign and stamp and that's good enough for me.

There was one time that the signing took place in an empty house (the principle res. for the loan) and they had signed and said it was the principle residence and then some people showed up with a property manager to sign the rental agreement. The renter was running around the house talking about where she would put the furniture. The borrowers looked at me sheepishly and said... so I guess you know now that we don't live here... does it matter? In that case... I would know.

I also had a borrower tell me when we got to that page that he had just gotten fired but didn't want me to tell. I guess in that case I would know too.

In both cases I tried to get ahold of someone and wasn't able to. I completed the signing and did not notarize that particular affidavit and attached a letter to it stating why. That way the lender could do what they wanted with the package... it's their decision to stop the loan... not mine. All I was concerned with was my legal obligation to that one document.

Any thoughts?

Reply by Les_CO on 12/15/06 2:04pm
Msg #166111

Re: I will attack the employment/primary residence issue...

I guess in the case of the renters showing up you could have good cause. My point was by reminding the borrowers that they are swearing under oath (lying is perjury, as is bank fraud) and by not being truthfull they are committing a punishable crime. For me, If they STILL swear to it, so be it. Which "word" are you going to believe? Their word (heresay) that they just lost a job, or the sworn word on the 1003? I suppose a call to the LO could be in order. BUT it sounds to me like you could be getting yourself into a LOT of problems, by taking it upon yourself to decide who gets a loan, and if they should. If you think something is amiss, or criminal, just don't do the signing.

Reply by Les_CO on 12/15/06 2:14pm
Msg #166113

Re: correction

What I meant to say was (lying on a sworn statement is perjury, a crime, as is bank fraud) I'm not saying perjury IS bank fraud. (altho it could lead to bank fraud) I guess I should proof read before I post not after? Sorry!

Reply by AngelinaAZ on 12/15/06 2:27pm
Msg #166115

I understood what you meant... :) n/m

Reply by AngelinaAZ on 12/15/06 2:19pm
Msg #166114

There's where you and I disagree...

I don't believe that it is my call to stop the entire signing. I do not think that the borrowers lied about who they were... and I couldn't notarize the affidavit because of the previously stated reasons but the rest of it was still OK. I attached a note to that doc and returned the package and let the lender decide.

I don't know... it just seemed to me to be the best scenario.

Reply by Les_CO on 12/15/06 2:59pm
Msg #166117

Re: There's where you and I disagree...

Perhaps you are right. I know that you don't have to notarize anything if you feel something is wrong or is criminal activity. But in out persent litigious society, where six Muslims can sue an airline for removing them (rightfully so) from a plane, and get (or at least seek) financial gain from it, who knows? Could the borrowers sue you if they don't get the loan because you caught and reported them lying on the application? If a burgler can sue the store owner because he injured himself while breaking in to rob the place, why not the borrower you? I really just try and stay out of the borrowers business entirely. Just be prompt, be neat, be brief, be thorough, anb be gone.

Reply by AngelinaAZ on 12/15/06 3:19pm
Msg #166122

I honestly don't understand where you are coming from...

... or what your stance is.

... The fear or being sued or not does not govern the way I do my job... the notary laws of the state of Arizona does.

The law states that I cannot notarize a jurat where the signer is making statements that I know to be false. So... I just don't do it.

The law states that I should not do UPL.... so I don't. You yourself said that's it's not my decision to decide who gets a loan and who does not... which is the EXACT reason that I handle it the way I do.

I finish the parts of the signing that I can... I don't sign the stuff that would be fraudulent... and I move on.

I let the lender know WHY I couldn't sign it... so in a sense I guess I am REPORTING them... but I still did my job and left the decisions to the lender.

Reply by Les_CO on 12/15/06 3:47pm
Msg #166129

Re: I honestly don't understand where you are coming from...

Seems to me that the original question was about what does one do if they 'feel' the borrowers are perhaps not being truthful about a number of things. (marital status, residence, employment, etc.) Yes, I admit that sometimes one may get a feeling that some of these things are not as stated. However as I said I remind the borrower that by signing some of the docs they are swearing to the correctness of them. Under penalty of law. I do not pry. I do not question the borrowers about anything, except perhaps their idenity. If they continue to sign, and want to sign, with full knowledge of what they are signing, I let them. If I feel something is really amiss, I may just not do the signing.
In your case where you KNOW the borrowers are lying, I think you did the correct thing.
About our litigious society.....I guess it's good for the lawyers. All this is jusy my opinion, and should be taken as such. Just chat room advise...worth what it costs.

Reply by Art_MD on 12/15/06 4:04pm
Msg #166134

Re: I honestly don't understand where you are coming from...

There can be circumstances we don't know about.
Many affidavits re: primary residence say they will occupy for x months during the next 12 months. For all you know, they may be planning to move back into the property in a month.

Art

Reply by AngelinaAZ on 12/15/06 7:16pm
Msg #166175

Now I understand.

I agree. I don't pry or ask questions either. For the most part.... I don't want to know anything. I put them under oath and then ask them to read the statement and sign yada yada yada.

Man oh man... I am in a super-b!tchy mood today...

If it gives you any indication... I'm an L3 processor for a mortgage company and I'm about ready to start firing people. I have a few new processors and these past few days have been UGLY! They are creating problems faster than I can fix. I also have a MORON in doc prep that doesn't understand the whole 'disclosure thing' and they've been clicking every button on the freaking list on every package and making the closings a miserable affair. I already put a notice over to that dept. that SOMEBODY needs some more training but I think they're ignoring it. Flushed it down the toilet probably.

Anyway... sorry for biting your head off.

Reply by Les_CO on 12/15/06 10:39pm
Msg #166193

Re: Now I understand.

Well you're NOT alone. I finally got the docs for my 5 PM closing (at 6:20) from FAHT Co. (Great company!) The lone processor ( someone left early, or quit, or something) was about to to throw in the towel. They had 25 loans today/this evening, and she was really hassled (Not by me I called the borrower and re-set the appointment for "when I get there" which was okay with them.) They signed (happily) and it all worked out. Why it's gotten so busy lately I don't know? I must admit that after waiting for hours for the docs I was a bit aggravated, until I found out that the processor was completely buried. ( I had visions of everyone at the office Christmas party, having a great time, while I waited and worried) But it is Christmas time, and everyone is hassled, trying to do "other"stuff. We all need to try and give everyone else a little understanding. (Don't fire everyone, or you'll be stuck with ALL the work!!!

Reply by JanetK_CA on 12/15/06 10:53pm
Msg #166195

Re: Now I understand.

"I also have a MORON in doc prep that doesn't understand the whole 'disclosure thing' and they've been clicking every button on the freaking list on every package and making the closings a miserable affair."

I've visualized just such a scenario many times after getting a package with 130+ pages and four versions of essentially the same document... Thanks for the validation! You made my day!! ;> I hope things get better for you very soon, though!