Posted by Gerry_VT on 5/4/06 12:04pm
Msg #117725

Does the fine print really matter?

Let me begin by saying this is just a general interest question, and does not apply to any particular transaction. Also, I certainly do not advocate that any non-attorney notary give any legal advise.

We see stories on this board of people not signing because the major terms of the document are not as expected, such as interest rate, amount financed, points, variable vs. fixed rate. We also see stories of borrowers taking hours to read all the fine print. My question is, has anyone ever had borrowers refuse to sign because of something they found in the fine print?

Reply by PAW on 5/4/06 12:26pm
Msg #117739

It really depends on what you define as the "fine print". I've had borrowers refuse to sign for many reasons, including wrong interest rates, fixed vs arm, escrow accounts being included/excluded, cash-out figure, total settlement fees incurred, what is being "paid off" or "paid on account" and undisclosed or incorrectly stated prepayment penalties. I even had one deal go south because the borrower refused to sign the 4506 and 8821 forms as well as the "Certification and Authorization" even after their attorney, escrow officer and loan officer all explained what those documents are for and how they are used. The borrowers were forewarned that not signing the documents may delay funding or cause total cancellation of the loan. The latter is exactly what happened.

Reply by Gerry_VT on 5/4/06 3:33pm
Msg #117811

I guess my idea of "fine print" is information that is the same for every loan that the lender does, as opposed to the information that changes from one loan to another.

Reply by PAW on 5/4/06 5:11pm
Msg #117835

Like the authorization section on the Borrower's Confirmation and Authorization document! Most people don't read it, but it makes for a very interesting reading and often a big misconception by those who do read it.

Reply by MichiganAl on 5/4/06 1:26pm
Msg #117766

When I was new, I had a borrower refuse to sign the mortgage because on page 14 it said that in the event of legal action against him due to forclosure, he may be liable for legal costs. Nothing anyone said to him could change his mind. He wanted it crossed out or no deal. Stupidest issue I'd ever seen. Needless to say, no deal.