Posted by CMS_NY on 1/24/06 9:50pm
Msg #90865

I don't know, Do YOU?

Are Mortgage Brokers/Loan Officers allowed by LAW to close/sign their own loans?

What I mean is, the Loan Officer does the whole loan process for the borrower, and at the time the Docs need to be signed and notarized, is THAT Loan Officer capable of notarizing the Docs with the borrower(s)?? (...of course if he or she is a licensed Notary Public)

Thanks in advance for any feedback.

Reply by Tina_MA on 1/24/06 10:04pm
Msg #90870

Brokers and LO's cannot close/sign their own loans because they profit from them directly.

Not to mention is creates an appearance of impropriety.

Reply by clarise_oh on 1/24/06 10:14pm
Msg #90873

I have never seen or heard of a lo from a broker's office closing their own loan, but it happens at banks all the time. The bank lo gets commission on the deal too. Why would the rules be different for a broker lo?

Reply by CMS_NY on 1/24/06 10:23pm
Msg #90877

From my experience (notarizing loan docs), the L.O. does NOT want to be there at the closing table!

Probably due in part to the scrutinizing he/she may get when the borrower sees how much they're collecting on the loan transaction!

I hear it all the time from the borrower(s) when they actually look over there HUD....THAT'S HOW MUCH THAT BUM IS MAKING OFF THIS!

Any other comments/feedback is more than grateful

Reply by BP/WV on 1/24/06 11:14pm
Msg #90886

In WV (not sure about other states) no. However, a loan officer can close a personal loan.

Reply by Jon on 1/24/06 11:17pm
Msg #90887

I would think that it depends on each states statutes. In Ca, while I wouldn't recommend it, it is legal for a LO to close his own loan.

Reply by ReneeK_MI on 1/25/06 4:38am
Msg #90914

Legal in MI ...

... although lenders aren't often agreeable to the practice, when brokers do their own closings.

From MI statutes: (key word "employee", relative to L/O's)

11) For purposes of subsection (7), a notary public has no direct financial or beneficial interest in a transaction where the notary public acts in the capacity of an agent, employee, insurer, attorney, escrow, or lender for a person having a direct financial or beneficial interest in the transaction.

Reply by Kelly M Robertson on 1/25/06 7:00am
Msg #90920

Re: Legal in CA...

However, as Renee says, some lenders will not allow a Loan Originator to close their own loan and some companies that LO's work for won't allow it either. I know many LO's here in CA that tag-team with a buddy LO or just have their spouse or girlfriend sign their loans for them.