Posted by MaggieMae_CA on 1/4/06 3:01pm
Msg #86039

Role of a notary vs. signing agent (Conflict?)

Let me start by saying I read Shane's posting about receiving 32 possible signings and I take my hat off to him. I would love to have the opportunity to be heard on local radio and promote my business as well.

Something Shane wrote in his posting got me thinking and that's why I've started this thread. He said:

"I made a blanket statement, that it is the bwr's loans, and if they felt more comfortable with a disinterested 3rd party closing their loan, to make sure they understood what they were signing"

I agree with this statement and I know my sister who recently refinanced her home in NJ would agree too. She couldn't stop singing the praises of the notary/signing agent who came to her home for her refinance.

Here in CA a notary's role is to verify the identity of the parties signing the documents and notarize their signatures. We cannot provide legal advise, etc. As a signing agent, I believe that I should be able to make certain the borrower(s) understand what they are signing. But when is one crossing the line between their role as a notary and the role of a signing agent.

Does anyone else see a conflict (ethically) in what we can and cannot do?

Reply by Jersey_Boy on 1/4/06 3:11pm
Msg #86042

The only question I answer for the borrower is "Why is the APR higher than the rate?"

Almost all other borrower questions I can answer simply by pointing to the information they are looking for within their docs... i.e. what's the payoff? what's my payment? when's the first payment? am I set up for escrow? etc.

I always give them a blank sheet of paper to list of questions they come up with during signing. Recission periods are a great time to get these questions answered... hint, hint.

I don't explain anything... explaining is not our job and explaining docs is UPL in NJ!
UPL is not something I want to mess with... I can't be a signing agent without my notary commission!

Reply by eXpedN_TX on 1/4/06 3:18pm
Msg #86043

I do the same thing as Jersey Boy. I also let them know up front what I am there for and what types of questions I can answer. I tell them that I can answer most "Where" questions. Where is the interest rate? Where does it state whether or not I am penalized for paying the loan off early? Etc. That way if they ask me something I am not allowed to answer during the signing, I can smile and ask if they can reword it another way. The piece of paper for the borrower to jot down questions is a God-send. They thank me and thank me for this little technique and it does help them to move on to the rest of the paperwork. Another SA here told me to make sure and leave the Lender's name and number handy as well. That was a great idea...thanks whoever that was and sorry I forgot your name.

- Melissa

Reply by MelissaCT on 1/26/06 4:19pm
Msg #91480

I do a similar thing. I bring a pad of post-its & use them like tabs, so that they can locate the document or information in question when they're on the phone with their LO. I also do that for things like how to request a copy of the appraisal, if I don't place that form right on top along with the RTC.

I pretty much know the loan pkg backward & forward in my sleep, but a borrower may not be able to find the paragraph or document as quickly. I also begin each signing with the HUD, followed by the note, along with any addendums. Usually, that's where discrepancies are, if any.

Part of a notary's job is to make sure the signer understands the meaning of his/her actions, particularly if the signer is elderly or otherwise of questionable capacity. Otherwise, they can't swear that the information contained in the document is true & accurate to the best of their knowlege & belief (jurat). Competency of the signer is a requirement for a notarial act, and up to the notary to judge whether the signer is competent to sign. If the signer doesn't understand what they're signing, are they competent to sign it?

The notary can still only answer where questions, however.

HTH

Reply by Shane_OH on 1/4/06 3:24pm
Msg #86047

Legally your role is that of a notary, and nothing more. UPL is an ugly ugly beast, that noone wants to get caught into.... stick to your role as a notary, direct them to where they can get questions answered (the LO/the lender/or the docs that address their questions).

The failure to do so, could result in penalities that vary state to state, but usually include losing your notary certificate....which results in loss of income, loss of job, etc.... Don't Risk It.

Reply by Paul_IL on 1/4/06 4:21pm
Msg #86060

Notary portion is only less than 10% of the signing agent function. If you think you are strictly a notary then perhaps you should only be charging for the Notarizations alone and your state allowable travel expense. Have the lender send docs to borrower, show up id them and Notarized the required docs and then leave them to sign the rest on their own and let them return the docs. Lets see how many title co's or lenders will be breaking down your door for that service.

A signing agents job is far more than just being a Notary as you have to make sure the borrowers sign all other documents correctly and make sure they at least understand what document they are signing(simple document explainations doe snot constitute UPL). Transport the docs to and from, maybe print the eDocs, Return docs to title etc...

Reply by PAW_Fl on 1/4/06 5:15pm
Msg #86072

I agree, Paul. There is no line that can be crossed between the notary and the signing agent. These are two distinct and separable functions and duties. The notary portion is the mandated legally applied action and performed by a duly commissioned (licensed) notary public, justice of the peace, or someone appointed by the state to administer oaths and take acknowledgments. The Signing Agent is an agent of the title company hired to present the documents to the signers, to be properly signed, whether or not those signatures are notarized, and to answer basic questions in a non-interpretive nor advising manner. UPL applies to the notary as well as the signing agent, so one must be extremely careful when "explaining" documents. Details are the purview of the lender and title company officers. Purpose and function are well within the purview of the signing agent.

If you were there only as a notary, then you should only be paid your what your state allows, nothing more. (In some states, this would be a benefit! ) But, you're not there as "just a notary".

Reply by Jenny_CA on 1/4/06 6:35pm
Msg #86106

I have had many signings when the borrower has specifically requested a Spanigh speaking notary their second time refinancing. Yes, they singed all the docs the first time around the SA pointed and said " firme aqui" ( sign here).

Well, each person that had a previous experience with a person that would say " just sign here" was very happy with my services. The said that at least they knew what they were signing this time.

Not everything is rosy, I've had clients that were very distrustful of the whole loan process , but that is another topic.

Reply by Shane_OH on 1/4/06 6:35pm
Msg #86108

Re: Role of a notary vs signing agent (Conflict?)

I'm assuming you didn't take my comments as common sense....Don't do anything that would cause you to be involved with UPL, no opinions, etc, etc.

When I said act as notary, this is what I was inferring.... maybe i mis-spoke, or maybe you read into it too deeply, either way, thanks for clarifying what most problem got out of my post.

Reply by NorCalDar on 1/4/06 7:40pm
Msg #86124

I believe that some NSAs sell themselves and their Lenders short for fear of Unlawful Practice of Law. The first thing I tell the bwr is that I am not an attorney and as such I cannot and will not give legal advice. I then tell them that I have three basic roles:

1. Notarize some of the documents and for that, I need to positively ID them.

2. Show them where to sign on documents that I do not need to notarize.

3. Assist them in where to look in the documents to get specific answers to their questions.

I believe that an experienced signing agent should understand that there is a definite difference between explaining the documents and giving legal advice.

Take for example the Impound Authorization found in most loan packages. I would never advise a borrower as to whether or not establishing an Impound Account for taxes and Insurance is appropriate for their particular situation. To me, that would cross the line of giving legal advice. I would, however, have no problem explaining that an Impound Account is an account that is set up for collection of property taxes and or insurance. I would also explain that when someone establishes an impound account, their monthly payment includes P&I, taxes and/or insurance. I would also have no problem explaining that the Lender uses the form to identify whether they (the Lender) are requiring an Impound Account be established, and if not, for the bwr to choose whether or not they request one. I show them the two choices listed and ask them to pick which one applies.

Remember, this is not legal advice but just my perspective on what is appropriate.

Reply by AmandaCA on 1/5/06 12:16am
Msg #86165

I have been thinking about this thread all day. I have several concerns which I will note here.

As NSA's we are first Notary Publics. As such we are not point and sign people e.g. "sign here, initial here" etc. A Notary Public is to adhere to the following:
1) require doc signers to appear in person
2) scan the doc/docs for completeness
3)screen signers for identity, WILLINGNESS and AWARENESS;


The 2005 CA notary Law Primer says the following:
(pgs 13/14)
"FEEL CERTAIN THE SIGNER UNDERSTANDS THE DOCUMENT
A conscientious and careful notary will be certain not only of the signer's identity and willingness to sign, but also will make a layperson's judgement about the signer's ability to UNDERSTAND THE DOCUMENT. (capitalization mine) .....If in doubt, the Notary can ask the signer if he or she understands the document and can explain its purpose. "

OK....I used to work in a law firm. (I am NOT an atty, I do not give legal advice.) One day a man and his aunt came into the office. He wanted her to sign a form which would give him the legal right to accept her welfare payments. As I engaged her in conversation it became clear to me this woman was under the influence. In fact, she was not quite sure what the doc was she was signing, just said her nephew asked her to sign it and she was WILLING to do so. I asked her to explain it to me, she read it to me and said it was fine, but when I asked her to explain it in her own words she could not. I questioned her further...SHE WAS NOT AWARE AND COULD NOT EXPLAIN THE DOC; I explained to her nephew that I could not notarize the document with his aunt not being able to prove to me her ability to understand the document. (besides the fact she was drunk, which he readily admitted.) Did I think he was trying to do her harm? No, in fact I think he may have been trying to help her. But my position as a notary was to be sure she was not only willing but could understand the document as well.

My employer backed me up on the decision not to notarize the document.

A few weeks ago I did a power of atty signing on a multi unit property purchase. The docs contained several provisions I would personally consider not good business dealings. A huge balloon payment, astounding interest rates, etc. I could see the buyers FICO, I personally felt he was getting a raw deal, the mrtg office seemed entirely incompetent, etc. (I was signing in office, thru a SS order.) But again it was my PERSONAL opinion. In a usual situation I would just be sure the signer understood the docs, NOT give my personal opinion (I NEVER give my personal opinion) and go forward. But in this case I had a person acting as atty in fact. It was the brwrs brother. He did not have a clue and kept asking me what to do. I asked him "do you know the details of this loan?" No he did not. Is your brother aware there is a balloon payment on this loan? He had no idea. Is the brother avail by phone? NO, out of the country. Do you feel comfortable signing these documents? He was very unsure and completely nervous. HOW DO I NOTARIZE A DOC SAYING I WAS SURE OF THE WILLINGNESS OF THIS PERSON?

I called the SS, told them of the dilemma. Their answer? His bro has a 3 day RTC let him sign and let the brother worry about it. HELLO, it is a multi unit rental prop...THERE IS NO RTC!

What to do? I left it in his hands. I made sure he understood every doc (even though the signing took well over 2 hours due to this) I also made sure he knew there was no RTC. I asked him several times if he was sure of what he was signing and that he was in fact atty for his brother and there would be no going back. He agreed and he wanted to sign.

Personally I felt he should not have signed. I felt he should have been informed of the provisions of the loan. But as a Notary Public I felt he understood and signed willingly. I took the time to go over each doc and did my best to be sure he understood what he was signing.

This long explanation to say I feel we need to be more than point and sign notaries. We need to fulfill our commissions as notaries first. If I can not be sure my signers understand the docs, how can I truthfully notarize the docs?

Granted, only a handful of docs need to be notarized, and those are usually easily explained. But how can a person truthfully sign/notarize a deed if all other provisions of the loan are not fully understood?

I have had lenders try to get a brwr to sign a doc that basically negates the RTC. I have had brwrs think they are getting a 1-2yr fixed w/ARM after that, (CA has become very creative in their loans!) when in actuality they are getting a 1 month fixed with ARM which can go up the second month of their loan! Can I actually notarize the docs unless I am sure they understand the complex details of their ARM/Interest only, creatively financed loan? I always stress the RTC and ask the brwrs to use that time wisely!

So, I am not a point and sign Notary. I do not cross the line of UPL but I belive in awareness and willingness.


OK, long enough, too long of a post. As always I am open to comments, suggestions!

Reply by SueW/Tn on 1/5/06 7:36am
Msg #86184

Amanda...bravo to you!

Prior to my becoming an SA a close family member sold her house in sunny California, she also found one to purchase. A point and sign SA handled this transaction, never did a formal ID nor any swearing in, didn't have a clue as to any explaination and while my family member was willing she definitely was not aware. To that SA I want to say thank you, due to your lack of integrity and inability to do a job properly I have become involved in something I truly care about. However, your personal laziness placed this senior citizen in a precarious situation, there are predators out there that prey on the weak...believe it or not some of our seniors are NOT AWARE and shouldn't be signed just to add that notch to your belt! Matter of fact age has no boundries when it comes to awareness! Amanda, I can only wish that it had been you dealing with my Mom the first time around...I applaud your integrity, your honor, and the unquestionable degree of professionalism you display.

Reply by TCMN on 1/5/06 8:35am
Msg #86189

Re: Amanda...bravo to you! DITTO


Amanda I agree with SueW 100% and I think that your stated actions prove what our governments intentions are when commisssioning an individual to be a notary public.

I would be very proud of yourself and your integrity shines through.

Reply by AmandaCA on 1/5/06 10:32am
Msg #86234

Thank You TCMN and SueW!

I appreciate your kind words.

TCMN, I am sorry your mom has experienced that. I have personally done several seniors where I almost felt fraud may have been involved. In each of those cases I asked them if they had adult children they could call. I told them to use their RTC to call their children, read the docs to them or have them look at them, and be sure they understood every bit.

I had one lender that was processing loans where the BR was told they would have a fixed 12 month, then another rate the next 12 months, another raise the next 12 months, etc. Then after 5 years it would start all over again. BUT the note clearly said the rate could change beginning with the second month of their loan and could change each and every month thereafter. Very confusing! This same lender also had BR sign a doc saying they gave up their RTC (the form said, "each person signing the RTC MUST sign this form") BR refused to sign and I respected their right. The lender called, telling me I needed to go back out there to get that paper signed, they were livid. I replied "oh really? do you know that requiring the BR to give up the RTC is against the law?" Their tune changed and that was the last I ever heard from that lender.

Yes, I may lose some work, but I won't have sleepless nights worrying that I may have contributed to any sort of fraud. Which is what my commission is for, to serve the public, not the lender.

Reply by AmandaCA on 1/5/06 10:34am
Msg #86235

correction

SueW it was your mom...........said that wrong in the previous post! (haven't had enough coffee yet!)

Reply by PAW_Fl on 1/5/06 11:00am
Msg #86242

Re: Thank You TCMN and SueW!

>>> I had one lender that was processing loans where the BR was told they would have a fixed 12 month, then another rate the next 12 months, another raise the next 12 months, etc. Then after 5 years it would start all over again. BUT the note clearly said the rate could change beginning with the second month of their loan and could change each and every month thereafter. Very confusing! <<<

Are you sure it wasn't the **payments** that changed every 12 months? I've seen many ARMs that allow the **interest** rate to change every month, but the payments didn't change except yearly. Depending on the interest rate and payment made, if the payment was not sufficient to cover the interest due, the excess interest due would be added to the principal. It is a very confusing loan product, but fairly widely available.

>>> This same lender also had BR sign a doc saying they gave up their RTC (the form said, "each person signing the RTC MUST sign this form") BR refused to sign and I respected their right. <<<

As far as I am aware, a borrower cannot waive their rights provided under Reg Z (Title 12) except in special circumstances. So, unless a special circumstance exists, as specifically itemized in the Act, the lender is off base.