Posted by lubi on 8/24/07 12:10pm
Msg #207487

What can be explain by the signing agent?

Hello,
yesterday I had a signing. I think the title company wants me to explain the docs. I am pretty new and I want to be sure that I am not practicing the law. The lady from the title company she said it is my responsibility to explain (mortgage docs) what is the note, adjustable rate, when does it changes, show and explain following: the charges in the settlement statement , what is APR and more. And I don't think it's my responsibility. If you do signing for purchasing do you have closing agent with you in the signing?

And one more question. If you do filling system of your closing which information about the borrower or signing you are keeping in the file. I am in FL and I am using journal and log (is it enough?)

Pls. if you can share ideas with me. Thank you.

Reply by SharonMN on 8/24/07 12:18pm
Msg #207491

I would say that explaining rate, etc. is the responsibility of the loan officer because they know the loan and you may have just gotten the docs 5 minutes ago - but you should know where this information is and be able to point to the information if the borrower asks. You should also know the difference between APR and note rate, because that question comes up a lot. I never attempt to explain a settlement statement. I do give a generic statement about each document such as "this is the note, which is the agreement between you and your lender that sets forth the terms of your loan" or "this is your HUD settlement statement, which shows all of the fees, charges, and payoffs associated with your loan." Anything more complex than that, they need to call the loan officer.

Reply by lubi on 8/24/07 12:24pm
Msg #207493

Thank you Sharon and I think the lady wants more than it is usual from signing agent.

Reply by PAW on 8/24/07 12:45pm
Msg #207497

I don't think the title company is expecting too much from the signing agent. You should be able to explain the "what is" stuff by showing them. For example, hitting the high points of the Note: how much they are borrowing, the interest rate, change date (if it is an ARM), PPP (Pre-Payment Penalty), when the first payment is due and how much.

You can, and should be able to, explain what each document is for, i.e., it's purpose. You cannot state "why" a particular number (e.g. the Note rate) is what it is, but you can state as fact, what you and the signer can read.

IMO, there are too many "point and sign" signing agents who don't take the time to point out the high points of the transaction. Taking a little bit of time to organize the presentation of the documents and pointing out the things that vary from loan to loan (amount, interest rate, etc.) is the customer service part. The rest becomes second nature and you develop a spiel that sounds boring to you (because you've said it over and over and over again), but it's the first time the borrowers may have heard it.

If I didn't have a spiel and go through the particulars, I probably could do a signing in half an hour. But I'd rather spend the time going over those items to ensure the borrower is completely satisfied that all their questions (though not necessarily asked) are answered. I always allocate at least 1 hour at the table with a standard refi package and two signers. Once in a while, it takes more time, but the signers are almost always satisfied at the end. Occasionally, the loan is not what they expected and want more information. When that happens, I have them call their LO or broker for the specifics.

Reply by calipat on 8/24/07 12:54pm
Msg #207501

PAW that is exactly the word I was thinking about....

SPIEL you have to have a spiel and yes it does get a bit boring, but it works for me. I also allow myself at least 1 hour for a single re-fi with 2 people.

Reply by TRG_wy on 8/25/07 7:57am
Msg #207630

Re: What can be explain by the signing agent? Agree -

That is exactly the same play book I use. I too always allow at least one hour.

I walk away comfortable in knowing that the borrowers are fully aware of all aspects of their loan package. I rest easier and and I don't have to worry about getting calls by angry signers who later discover that what they were told by LO wasn't what they got. Issues are caught at the table. Too many never take the time (if ever) to actually read the documnets for themselves and if they do, they don't understand them anyway.

I get so confused and frustrated when I read that agents close loans in 20-30 minutes (non-helocs). That tells me they do not take the time as PAW outlined and really makes me angry how they pull us all down.

Reply by Melissa Haley on 8/25/07 4:53pm
Msg #207679

Re: Definitely an hour

Occasionally I'll get through in 45 minutes or so, but those are the exceptions, not the rule. Some packages take as long to notarize as it does for the borrowers to sign. Point & sign types shouldn't be charging SA fees, they should be only charging notary fees, because that's all they are doing. Although I don't go line-by-line on the HUD, I do point out that Page 1 is a summary of charges, page 2 has the individual breakdown & I point out the payoffs (current loans, credit cards) and what they're getting back. It is the first document I go over & also goes on top of their copies. I let them know that they can use the Settlement Statement at tax time (give to their accountant, etc), as it details what has been paid in connection with the loan.

Reply by calipat on 8/24/07 12:50pm
Msg #207499

I do exactly as Sharon says. You have to be very careful in what you say. When I get to the note I let them know and point out if it is fixed or adjustable. Sometimes it is fixed for so many years and I point it out in the note when it will change. I point to the amount being financed, the interest and the payment amount and when the first payment will be. Of course I don't just point, I say out loud what is there. They see it and if they want to know why they got that interest rate or anything else more complex than that I tell them to call their LO, as I am only there to witness their signatures and make sure everything gets signed and notarized where need be.
As for the HUD I sort of point and say this is the amount being financed and these are the charges and the payoff to their current lender and if there are any other payoffs.
Most people know what these docs are since so many people have refinanced way too many times over the past couple of years.

Reply by Sherri_mo on 8/24/07 1:59pm
Msg #207518

I have to agree with PAW. In my opinion one of the biggest problems in this industry is the number of notaries/notary signing agents who literally know very little about loan documents and think their only obligation is to point out where to sign with little or no explanation of the documents. It certainly is not UPL to read a document and show or tell the borrower what it says. I have had many borrowers tell me that I was certainly better informed than their loan officer was and this did not require explanation any further than what was written in black and white and in front of them.

Reply by lubi on 8/24/07 2:04pm
Msg #207521

Thank you for info. I apreciated. I want to be sure that I can do it without any bad feelings and I am not practicing the law.

Reply by JanetK_CA on 8/24/07 5:23pm
Msg #207571

I couldn't agree more

What we do is more disclosure than explanation. We are basically reviewing the key points of the loan. I can't count how many times I've heard borrowers exclaim that what they saw isn't what they were told. It's not our job to help the LO put one over on the borrower. If they want to lie to them over the phone when there is a discrepancy, there's nothing I can do about it, but I do feel some level of responsibility for walking them through what is in their documents so that they have at least some idea of what they are signing.

Conversely, this process can often help them understand how what they see in the docs IS what their LO told them. It is very easy to misread the docs and not understand how their previous conversations correlate with what is printed. For example, if someone just looks at the bottom line of their Settlement Statement and sees a higher number than what they were told their fees would be, they are missing part of the story. Another simple example is the difference between APR on the TIL and actual interest rate on the Note - and most of us could name many other examples.

Knowing how to walk the line between disclosure and explanation is a key part of being a true professional SA, in my opinion, and can often prevent what might otherwise have been a "no-sign" or rescission situation. (That assumes that the LO did his/her job right in the first place...) And PAW, I'm glad you mentioned how long you take. I often wonder how people can get through most packages in a half an hour, although the ack requirements can make a big difference from state to state.

Reply by Dorothy_MI on 8/24/07 6:30pm
Msg #207582

After reading some of the above

I now know how some of the people who are facing foreclosure can probably truthfully state, "I didn't know it was an adjustable rate". I didn't know it was a negative amoritization loan" if they only had point and sign notaries and swallowed hook, line and sinker everything their loan office told them and didn't re-read the docs during their 3 day right of recission. Of course, they are adults and should know better, but if they had a "point and sign" notary it is almost understandable. Would you want someone to just push a bunch of papers in front of you and point to where they should sign. No matter how much of a hurry someone is to sign, I ALWAYS take the time to go over the HUD (I'll come back to that), the note rate and if there is a prepayment penalty. If those things are as the L O promised, the rest is just for the attorneys.

Why don't you go over the HUD? It is not rocket science. The charges that are listed have a title. My spiel (yes I have a canned one too) is to go to the list of lender charges (in MI usually on the second page). I tell them to go to the second page upper left hand corner. Your loan discount rate is $XXXX.00, Your yield spread rate is$______. 00, your appraisal fee is $______.00, Your mortgage broker fee is $_____.00, your tax service fee is$_____.00, your flood certication fee is $_____.00, your application fee is $_____.00 and right on through all the lenders chanrgers. Then I go over their escrow (impound) figures, Their title charges line by line. (As an aside, if they list under notary fees a large fee, I just gloss over that by saying, "Sure wish I was getting that amount) and go right on down the page. I go over their payouts. The loan amount, minus the settlement charges, minus the payouts leaving either a 0 balance or more than likely an amount they are getting back or amount they owe. Until you get familiar with the HUD, take the time before the appointment to go over it yourself so you at least sound like you're the professional in the room. You can also make copies of HUDs from loans you sign (just black out the personal information to protect privacy) and go over them until you feel comfortable. I believe the reason the courses don't cover this is that it would take too much time and when you are trying to cram MONTHS of experience into a 4 or 6 hour time slot, the easiest thing is to teach "Don't explain!" And bandy around the dreaded UPL.

Reply by JanetK_CA on 8/27/07 8:24pm
Msg #208035

Re: After reading some of the above

Well said, Dorothy, as usual. I'm not sure who you were referring to about not going over the HUD. If I gave that impression in my post, it was an erroneous impression. (I, too, have my spiel - I mentally push "play" and away I go!) The only time I don't go over it is when the borrower takes it out of my hand and lets me know in no uncertain terms that they are familiar with the doc and know what they are looking at. (And sometimes I'll even ask to make sure.) You and Renee have both made some excellent points about the value of experience in this business!!

What amazes (I'm being kind...) me is when I get a comment like I did from a ss owner recently who told me that when he does signings, he doesn't like to risk stirring the pot, or something along that line, indicating that he doesn't get into any details of the Note with a borrower unless they ask! If we do that, then I think we become part of the problem instead of potentially part of the solution. I'm so glad this message elicited the response it did! This is a topic that needed addressing and should probably be addressed regularly, considering the current environment in this industry. Sadly, as I think I've posted elsewhere, with decreasing fees, I think the point and sign notary is going to become even more the norm...

Reply by ReneeK_MI on 8/25/07 5:06am
Msg #207626

AGREE w/ Paul, Dorothy and others w/ same opinion

I think this whole "UPL" stuff is a scare tactic blown WAY out of proportion to the point that it has expanded to encompass the very function of the professional signing agent.

It's a tactic that certainly serves its purpose, which I suspect is to enable a certain entity to quickly spit out more and more neo-notaries into the signing agent field. Instead of being fully trained, which would require some considerable time, effort and material, they're simply told 'no can do' and the fear of UPL is drilled into their heads far, far beyond what is (IMHO) accurate or reasonable.

When I do a closing, I guarantee you those borrowers completely understand their loan terms, have a solid comprehension of WHAT an APR IS, know every item that's on their HUD, know what every single document they sign is, and the last thing I ask them before I leave is "Do you have ANY questions?" It is RARE that they have a question that I have to defer - although that's mostly because I just don't get many w/ term issues (just my good luck, I guess).

For those borrowers who are well-versed and want to fly through it - no problem, but we're still stopping at the Note & PPP Addendum before we take off flying and we finish with "Do you have ANY questions?"

Reply by Linda_H/FL on 8/25/07 1:14pm
Msg #207667

Re: AGREE w/ Paul, Dorothy and others w/ same opinion

Agree wth all of you - IMO UPL is NOT making sure the borrowers understand what they're signing - it's telling them if it's good for them and telling them if they should or should not sign and why.

In addition, ANY doc that says AFFIDAVIT and "subscribed and SWORN TO" is read through - I don't want them swearing to "this is your owner's affidavit and is required by the title company to issue their title insurance policy"...we go over each item...one of my companies has a 5-page Real Estate Affidavit - we read all five pages.

All MHO and my personal preference...I like content borrowers and I, too, like to sleep at night.

Reply by ReneeK_MI on 8/25/07 5:25am
Msg #207627

and another thing ...

I used to train lender's closers, who draft the closing docs and work the Huds (among other things). From start - to - flying solo, it took about a year to train someone and that was FULL TIME, on-the-job training. Now grant you, there's a little more to that job but to think anyone could be taught the knowledge base a signing agent should (IMHO) posess in a few hours or even a couple days is simply ridiculous.

I began with at least 1 full 8-hour day on EACH of these items:

Day ONE: the lending PROCESS, start-to-finish, for comprehension of the whole picture, because in my experience a person can not do their own, individual part (no matter how 'small' it might seem) without some comprehension of the entire process and how it all fits together. Knowing where something comes FROM, and then where it goes TO is a HUGE help to understanding all the components about what YOU do.

Day TWO: The Note & specific terms
Day THREE: The Mtg
Day FOUR: The TIL

You see the point.


2) the