Posted by PAW on 11/14/06 10:09pm
Msg #160106

MA Real Estate Bar brings legal actions against notaries

http://www.reba.net/news/new_upl

In MA, closings must be done under the supervision of an attorney. UPL abounds. (Don't forget to check out BOTH links in the article. It may be very enlightening to many readers.)

Reply by Lisa Prestegard on 11/14/06 10:31pm
Msg #160116

Very interesting, Paul... thanks n/m

Reply by Stamper_WI on 11/14/06 10:42pm
Msg #160119

Re: Very interesting, Paul... thanks

They seem to be talking about conveyance or transfer of ownership. It does not mean the refinance of the property as far as I can see. I will have to read it more completely tomorrow

Reply by Lisa Prestegard on 11/15/06 6:32am
Msg #160166

Read further...

look at the end of the article... there are a couple of links. One of them (cant remember which) defines "conveyance", and it is to include a transaction between borrower and lender OR (not and) a buyer and seller.
I was confused too. I had my R.E. Broker hat on and thought the same, until I read how their opinion of law defined conveyance.

Reply by MelissaCT on 11/15/06 8:57am
Msg #160206

Depends on what state you're in

some states (I believe) actually do convey interest in the property to the lender even in a refi. (The preceeding is my opinion and not legal advice. It may or may not even be true.)

Reply by Kevin/Ct on 11/15/06 10:51am
Msg #160247

Re: Depends on what state you're in

Connecticut is a title theory state. A mortgage is a deed in Connecticut. When the borrower places a mortgage on his property, he splits the title. Legal title is conveyed to the lender, and equitable title is retained by the borrower.

Reply by PA_Notary_II on 11/15/06 9:11am
Msg #160215

Re: Very interesting, Paul... What they're not saying...

It would appear that they are trying to slow down the process and drag it out so that only an attorney would be qualified to perform the actual witness signing. A couple of questions come to mind. Would the attorney actually perform the title search at the courthouse, or would he use an abstractor? Would the abstractor in any way be a party to UPL? Would the attorney actually construct and print the legal docs him/herself or would they trust the lender to do it? For what the attorney charges and from their position on UPL, would it be unreasonable to expect them to construct each document themselves? I suspect they are trying to protect more than just their 'closing' fee. They are trying to protect their income from issuance of Title Insurance, where the REAL money is. If they or their office personnel do all these things, would the office personnel all be required to have BGC's? And finally, if they get what they want, will they employ their own Notaries to perform the actual signing in their offices rather than waste their time at the table?

Reply by Sharon Taylor on 11/14/06 10:46pm
Msg #160120

I read all 4 links, Paul. Very interesting reading. I'm surprised NREIS was involved with this, and it's sad that all those notaries are having their lives torn apart by a law suit. They have an obligation as notaries to know their state's laws but either didn't know, didn't care or relied on misleading information and didn't thoroughly explore the potential consequences of any attempts to circumvent the law. Bar Associations are unbelievably powerful dragons!

Reply by Kevin/Ct on 11/15/06 6:55am
Msg #160168

I would have to agree with REBA's position in this matter.

Reply by MelissaCT on 11/15/06 8:36am
Msg #160196

Kevin, interested in your opinion

As NSA's (as a whole), notaries do not offer legal advice of any kind. They simply present the already drafted documents to the borrower for signature. The NSA makes sure the documents are signed in the correct locations (based on training and lender requirements) and notarized properly. The NSA does not disburse money, does not draft documents and, in most cases, does not get involved with recording.

Many borrowers are familiar with the documents, loan terms, etc. either because they have done research online or have previously refinanced their mortgage.

Questions are directed to the LO/EO/Lender/Title or attorney. Borrower's in CT have the option of using their own attorney or the lender's attorney in the transaction.

Just curious. As I read the links, it struck me that these notaries aren't "conducting closings" per se, in all the facets involved. On a side note, what about the lenders that send the documents to the borrower & tell them to find a notary?

Reply by Kevin/Ct on 11/15/06 9:26am
Msg #160221

Re: Kevin, interested in your opinion

If I understand the complaints that I read, these issues will be addressed by the court once the Defendant has filed an answer and defenses. So far I find myself in agreement with the complaint. Whether the actions of the defendant notaries constute a UPL is a question of fact for the judge and/or jury. The notaries in question are certainly free to raise these issues by their defenses filed with the court

Reply by BobbiCT on 11/15/06 9:18am
Msg #160217

Kevin, I agree in part ...

After review, in part, I have to agree with REBA's position, too.
Interesting discussion topics:

1. Wow! Did the lenders and title insurance companies just forget that IN ADDITION TO a title insurance policies the lenders are required by MA law to receive a Certificate of Title from a MA attorney? Sounds like the poor homeowner has to pay twice for a similar product every time s/he refinances - pay for a new title insurance policy to the title company and pay for a separate certificate mirroring the title policy to an attorney. I doubt the lender is picking up the tab for the attorney's certificate.

2. If I win the lottery and, as an individual, want to pay my mortgage off in full, it reads as though I cannot do so. I must hire an attorney, give him my loan payoff funds, and have the attorney then transmit my payoff to my lender. A strict read means I cannot payoff my own mortgage loan in full because "an attorney" must transmit the payoff funds.

3. Will this result in the national title insurance companies setting up a California-like operation in Massachusetts? An MA title insurance company branch office issues the title insurance policy and acts as settlement agent while the national office negotiates the "closing agent" fixed fee to represent the lender on a national basis for all its refinance loans.

4. Because CT is also a mortgage deed conveyance state, will the CT Bar follow suit using the MA suit as a model?

Personally, so far I think REBA was generous to the non-attorneys who were conducting business on their own rather than for a MA attorney.

Reply by MelissaCT on 11/15/06 9:37am
Msg #160226

Re: Kevin & Bobbi, I agree in part ...

I do understand that the MA Bar has made argument for their opinion that the Settlement process is a whole and cannot be broken into parts. If that is found to be the case in judgement ruling, I can then see where the notaries can be found to be breaking the law.

However, this seems to be MORE an issue of non-MA attorneys/non-attorneys conducting closings in MA than the issue of notaries doing loan signing work in MA.

In any case, it will be interesting to watch this unfold, as it may set a precedent for other states.

Reply by Kevin/Ct on 11/15/06 10:54am
Msg #160248

Re: Kevin, I agree in part ...

Connecticut Attorneys are already taking that position, Bobbi. I was recently in a closing in which one of the closing attorney's refused to continue because the lender had sent a notary instead of an attorney to close the transaction. I was subsequently contacted to complete the closing when it was rescheduled.