Posted by Mike Photon on 11/21/06 2:19pm
Msg #161494

Investment Property

Had a signing for an investment property yesterday and there was no RTC in the package.
The BO seemed to be pretty knowledgeable guy and even has a real estate license.
His wife(non-borrower) had questions about everything in the doc and he was answering her questions - so I was sitting relaxed as they went on signing. When it came to the HUD, they didn't like what they saw. So I told them to call the LO. Well.. as usual, it was night and he was not reachable. Now the guy tells his wife "oh don't worry, let's just sign it and get it over with. We have 3 days to cancel if we can't sort it out by then"
Now I am confused. I thought since there was no RTC included in the package for investment property, they cannot cancel. Since he didn't ask me anything, and I wasn't too sure, I didn't say anything.
My question is if the RTC is not included, can the borrower still cancel without all the penalities?
If not, do you think I should have pointed it out to them? or is it not my place to do so?

Reply by Regal/NC on 11/21/06 2:25pm
Msg #161496

NSA should not give advise!! I would suggest they contact

their LO and leave it alone. JMHO

Reply by Blueink_CA on 11/21/06 2:29pm
Msg #161498

Re: NSA should not give advise!! I would suggest they contact

I agree, but my choking would have probably given it away. Is it possible Mr RE Borrower was just saying that to satisfy Mrs Bo?

Reply by Mike Photon on 11/21/06 2:39pm
Msg #161501

Re: NSA should not give advise!! I would suggest they contact

I'm sure he wasn't trying to satisfy his wife. He was pretty mad at the costs too.
Now I know I should not give advise. but, I was thinking that telling there is no RTC included in the package is not really giving advise - just explaining documents. Well anyways, the signing is done and I'm waiting for my check. But I can't help wondering if he is cursing me (and the LO of course) when he sees the cost of the loan really is 15K. Ouch

Reply by Les_CO on 11/21/06 2:28pm
Msg #161497

NO.
If he's a licensed Real Estate Salesman he's supposed to know CA RE law better than you.
Who knows what goes on between husband and wife? In this case I would have done as you. You wern't asked your opinion, he said he is knowledgeable in RE law, so be it.

Reply by Genkichan on 11/21/06 3:08pm
Msg #161505

Yikes, sorry but I disagree with you all. If it were me, I would have told them that there is no right to cancel among the document package. Borrowers should always make informed decisions. Having the NSA point out that the doc isn't included is NOT THE SAME AS giving advice. It is simply pointing out a fact and allowing for an informed choice to be made. Afterall, you are notarizing that they are BOTH signing the deed of their own knowledge and free will (and who cares if the hubby and wife are arguing or not. That's not your concern). That deed became binding the minute you walked out their door. Just because someone is a RE salesman does not mean he knows everything about a LOAN process. In fact, I've seen MANY a real estate agents give sorry poor financial lending related advice to their buyers/sellers, costing them plenty of headaches as clients try to complete sales contracts. I've even seen loan officers who act as signing agents and STILL can't even get the clients to sign all the docs properly (because I've cleaned up their messes). Just because you are familiar with some aspect of real estate does not give you all-encompassing knowledge. You should have pointed out the facts of the matter. This is not giving advice, although this post is certainly my opinion...

Reply by Elizabeth Soliday on 11/21/06 4:29pm
Msg #161516

I agree with Genkichan

I would have said something if he said he had 3 days to cancel and there was no right to cancel in the package. (It wasn't a purchase, was it? Then there would not be one anyway). I think explaining (speaking in general of the purpose of) the documents/or lack of, is the same thing - not legal advice. But of course after telling them it is not there, I would tell them to call their loan officer to ask if they had the 3 days to cancel or not. IMO

Reply by KJ_CA on 11/21/06 6:39pm
Msg #161537

IMHO.....

If the borrower asks for the RTC, I will inform him the RTC is not in the package. If the borrower does not ask to see the RTC or questions the absence of the form, I will keep my mouth shut and continue the signing. I am not sure why the borrower made the RTC comment and not look for the document afterwards? Maybe there is more to it than it appears? Given the fact that he is a RE agent...

IMHO, if the NSA goes beyond the scope of his/her assignment, by pointing out a flaw in the package which could kill the deal, the LO, EO or SS will eventually find out. Certainly not the best way for a NSA to build a long and prosperous business relationship with the entity that will pay he/she for their work in the future.

Reply by CaliNotary on 11/22/06 1:27am
Msg #161593

I agree with you guys too

I'm the first one to say that people need to accept personal responsibility for their actions. But to me it seems kind of inhuman to let the borrower think one thing when you know the reality is something different and that reality is going to cost the borrower thousands of dollars. Yes, people should be informed, but people also make mistakes.

In this situation I think the correct response would have been, after hearing the borrower say that they'll sort it out during the rescission period, to simply state that there were no RTC forms in the loan package. That's not giving legal advice, that's not trying to sway the borrower to do one thing or another, it's simply stating a fact.

This way you've alerted the borrower to the fact that he might be incorrect in what he's thinking. What he does with that information is his choice, and if he still wants to sign, that's totally his call.

I'm a big believer in the "do unto others" rule (yes, that means I have no problem with people being as blunt with me as I am with others) and if I were in a situation where my incorrect assumption or complete lack of knowledge were going to cost me a few thousand bucks, I would definitely want somebody to give me SOME sort of heads up if they knew I was wrong.

Reply by BrendaTx on 11/22/06 7:48am
Msg #161616

Re: I agree with you guys too - thanks for setting me

straight on this with your input, Cali and Renee'. I appreciate your responses. Bluntness is often the best way.

Reply by Les_CO on 11/21/06 7:34pm
Msg #161544

Re: Investment Property / Yikes!

The reason that there is no RoR on an "investment Property" is because the "investor" is 'supposed' to be somewhat knowledgeable in what he's doing. Also he's not risking his personal residence. This guy is a real estate broker, and he doesn't know the forms? Unlikely. Is he stupid? Maybe. is he lying to his wife? Who knows. Is it your business? No.

Reply by dickb/wi on 11/21/06 7:47pm
Msg #161551

as a wi re broker I feel you have given.....

the right answer to the problem....in wi we are considered the expert in real estate matters [even if we don't know squat] because we are licensed and presumed so by the state.....we can't wear 2 hats when we are licensed.....only one...that of the expert....to my knowledge income property does not carry a rtc, not withstandig the lenders right to give them one should they choose to do so.........JMHO....................

Reply by BrendaTx on 11/21/06 7:56pm
Msg #161553

Re: as a wi re broker I feel you have given.....

**to my knowledge income property does not carry a rtc, not withstandig the lenders right to give them one should they choose to do so**

That's a helpful reminder that the lender might want to do that...may have said they would. Like I said, we do not know everything. I don't pretend to...and neither do the lawyers I work with...I think that's what makes them so good at what they do. There is a huge library of reference materials on lending and property law. They never assume...they go do their research and find out.

Certainly as loan doc toting notaries we do not want to overstep boundaries.

Excellent answer (for me, anyhow), Dick. Thanks.

Reply by BrendaTx on 11/21/06 7:51pm
Msg #161552

Re: Investment Property - Great question.

One we can all learn from.

I don't think you did anything wrong. There was no RTC...they did not sign an RTC...the RTC should not have been assumed. And, I also think, Mike that there are loopholes to every single signing and we should not jump in and make blanket statements (as notaries) that "by gosh, there's no RTC here because there is not an RTC period--it's investment property you idiot!" We DO NOT know everything there is to know about closing a transaction, I promise you. So...I think your posture was correct based on your explanation of the events during this appointment.

I do not give direction to people that is not in b/w right there at the table. For instance, if they want to know if there is a pre-pay penalty, I will show them where to read that for themselves.

I have only done this for three years. I would be very interested to hear one of the more experienced ones give their position on your question "is it my place to do so?"

Reply by ReneeK_MI on 11/22/06 5:09am
Msg #161598

I would've spoken up

If there's no rescission period being provided, then backing out of the loan can range anywhere between impossible and as simple as a phone call. It's entirely at the lender's discretion.

Out of simple human curtesy, I would have pointed out that there was no RTC in the pkg. I would have checked the Hud - sometimes the "disbursement date" is printed on there, and if it's tomorrow, that would've ellaborated on the point. I also don't imagine citing something that is a FACT would put me at risk of UPL. It is a FACT that the RTC is only REQUIRED when encumbering your primary residence. I would point that out.

So much of what you say/don't say is all about careful wording. Even if you're not sure - it's okay to SAY "I'm not sure, but there is no RTC in this pkg - it could be missing in error, or it could be that you are not being provided a rescission period on this loan."

Reply by BrendaTx on 11/22/06 7:46am
Msg #161615

Re: I would've spoken up - Renee' - your answer is

very good. I like yours also.

This is one of those questions that not everyone has a patented answer for...you are a brave soul to tell it like it is...I find it interesting how few answers there are sometimes when I find the thread most compelling.

I like your answer a lot. Truthful, but carefully worded.

Dumb question by Mike this is NOT. It is the stuff we should be discussing here...not the fact based questions which are in a handbook and the asker is too lazy to consider looking it up. To me (and I know you may disagree) these are the dumb questions.

No one knows all the answers to everything...this was an excellent one to discuss. I am disappointed it is running off the page...way off the page with so little input. Thanks Renee'. Your post is a keeper.

Reply by ReneeK_MI on 11/22/06 12:21pm
Msg #161665

Brenda -

Listen - you just have no idea how much YOU inspire me, and how much I admire you. Praise from you is just so wonderful, thanks so much =)

Agreed, not a dumb question and life is in the details - this IS the stuff we should concentrate on discussing. =)