Posted by janCA on 6/21/06 5:45pm
Msg #127362

Fraud relating to deed of trust

I received docs for a HELOC today for a signing tomorrow. The DOT states Mr. Borrower, an unmarried man. There is a Mrs. and she stated her husband has tried to clear this up. I call the title company, they get in contact with lender and lender says they are not going to change it, this is done "all the time". I call SOS and ask them and they say to seek legal counsel and you are responsible for anything you put your stamp on. Under CA Gov code 8214.2 it does state "a notary public who knowingly and willfully with intent to defraud performs any notarial act in relation to a deed of trust on real property consisting of a single-family residence containing not more than four dwelling units, with knowledge that the deed of trust contains any false statements or is forged in whole or in part, is guilty of a felony." Where does this fall under? We are there to ID and notarize a signature, what's in the document is not our concern, or knowing that the deed is titled wrong, would this fall back on the notary? I spoke with the Mrs. and she says that her husband likes things done right and that he spoke with the lender about this last week. So it's not like the lender does not know that he is married. Is this a cut and dried situation or am I reading more into it than what there really is? Thanks for any opinions.

Reply by John_NorCal on 6/21/06 6:30pm
Msg #127372

Correct me if I'm wrong, but we are not determining the capacity of the borrower, correct? The borrower acknowedges his capacity to sign, not the notary. In my "not" legal opinion, if the borrower signs as an unmarried man even though he is married, at most there will be a cloud on title. If the Mrs. is not signing onto the deed, she can always be granted title anyway by her husband. Seems to me that the title company is passing the buck, in my opinion they should correct his status to read a married man. I'm sure Title_Gal will have something to add to this.

Reply by janCA on 6/21/06 7:04pm
Msg #127382

Yes, I agree, we are not determining capacity, but it's that Gov code section, knowing that what is in the document to be false. Mrs. Borrowers is on the 1st DOT. And let me correct myself, this is a Home Equity Loan, not a line of credit.

Reply by TitleGalCA on 6/21/06 9:24pm
Msg #127411

John is right, at least in my experience. I will say that the deed of trust absolutely encumbers the property, whether or not the wife signs.

When I record docs and write a policy of title insurance, I could care less if the DOT has the correct vesting (H&W as JT or "name" as an unmarried man...it doesn't matter). The DOT encumbers the property, period. As long as I see the owner of recording signing, I'm okay.

At best this lender is very, very lazy and it should be correct, but it won't make me eliminate it from a preliminary report, just because the wife didn't sign. Nothing but a reconveyance will entice me to take it off the property, therefore the lenders interest is safe.

(Only Renee/MI could make me change my mind =)

Reply by PAW on 6/21/06 9:47pm
Msg #127422

I agree TitleGal, the DOT (or in our case, the mortgage) simply places the lien on the property no matter how the vesting on the security instrument reads. Granted it should read the same as the vesting on the deed that conveyed the ownership to the owners in the first place, but as long as all the owners sign it, they are committed to its contents.

(Renee/MI could make me change my mind too!)

Reply by TitleGalCA on 6/21/06 9:56pm
Msg #127423

LOL - Renee is The Bomb, for sure. n/m

Reply by TitleGalCA on 6/21/06 9:44pm
Msg #127419

Part II Jan

I think you have taken all the steps you need. The SOS said, "you are not responsible for anything you put your stamp on". That is the truth.

Reply by janCA on 6/21/06 10:16pm
Msg #127427

Re: Part II Jan

No, No, TG, the SOS said, you "are" responsible for anything you put your stamp on. I basically said to them I didn't want this to come back and bite me in the butt, and that was their response. And I will reiterate, Mrs. Borrower said that Mr. Borrower wants things done right the first time so there will not be any problems forthcoming.

Reply by janCA on 6/21/06 10:21pm
Msg #127430

BTW, thanks. n/m

Reply by TitleGalCA on 6/21/06 10:36pm
Msg #127435

Re: Part II Jan

First, Jan, the SOS person on the phone is wrong. You aren't responsible for the contents of documents, ever. I appreciate the SOS ***IS*** the SOS, but think for a minute who's manning the phones. Also, refer to your handbook. Never, ever is the notary responsible for the contents of a document.

I think your issue has more to do with the comfort level of your signers, and that is huge. If it were me, I'd be on the phone to escrow, asking them to call the lender. Your borrower is clearly uncomfortable and for me, I defer to them. Just my opinion from a customer service point of view.

Reply by ReneeK_MI on 6/22/06 5:00am
Msg #127501

well geez guys, no pressure eh?! LOL

I see where you're coming from Jan, and I agree with you - because of the implications attached to a person being married or not married, I would have pulled out a pen of the black ink variety and had that error corrected - and would have let T/C know I would not otherwise notarize. Why? Because to notarize when you've been made clearly aware that it is NOT true, correct, factual information of the sort that carries serious implications is to drop the notarial ball. Dimes to donuts that you had a disclosure/affidavit in the pkg regarding marital status as well. No, we are not responsible for the accuracy of a person's representation of their capacity or status - however, when you're given the info in no uncertain terms, and you KNOW the doc contains misrepresentation, and even the borrower isn't happy with it ... that's enough to stop me.

Reading the post raised a lot of questions for me - first, I am NOT FAMILIAR with CA law, you guys have that Community Property thing going on, which I know zip about. My first thought was that lender didn't disregard the spouse, but ONLY had an error of verbiage on the DOT. Next question - did the wife SIGN the DOT? Again, I don't know if CA law makes her signature required, as the vesting might indicate he bought this prop prior to being married.

That would be my other issue - if the spouse would be required to sign such things as DOT, RTC, etc, and she was NOT signing anything due to borrower being represented as unmarried, that is something I would have corrected. If this were the case, and I was being told to participate in completely disregard her - well, I can't imagine that was the case, but if it were, well ... just wouldn't be prudent. I just can't see how/why a lender would leave themselves open like that.

Absolutely agree with the others, the DOT would STILL secure the property as long as it records. Again, I know zip about Community Property laws - and what I would do is all based on my own stomping ground laws, and the implications this situation would present.

Whew ... how'd I do?!

Reply by janCA on 6/22/06 9:34am
Msg #127543

Re: well geez guys, no pressure eh?! LOL

Renee, you did great and thank you so much for your response. Fortunately, this all came up "before" I went to the signing. I was calling to confirm and spoke with Mrs. Borrower and after speaking with her and the SOS, and TG you are right about who mans the phone, that I got in touch with the title company again, spoke with someone other than the person I spoke with the first time and she said since there were concerns over the vesting of title by the borrowers, she would relay this to the lender and to cancel the appt., which I did. I do a lot of business with this title company and rarely does anything come up that I question, but I was uncomfortable with this. Again, thanks for all the input.