Posted by Larry/Ca on 2/9/07 1:18am
Msg #174852
Dark cloud over signing
Twice this week the NBS was surprised and angered to see a Grant Deed in the loan package giving their interest in the family home to their spouse. Both times they asked me "WHAT'S THIS?". I explained, although it's pretty obvious it's now their spouses sole and separate property. I would not offer an explaination as to why and told them to call their lender for an explaination. They both did. One lender told them that it would not be recorded, they just needed it to approve the loan. The other told them that another Deed would return the vesting to joint after the loan funded. There was much tension and nasty comments between the husbands and wifes throughout the signings. I was glad to get out of there both times.
I sure wish lenders, before I get there, would inform and explain to the borrowers why they want these Grant Deeds signed.
Larry
| Reply by Brenda Stone on 2/9/07 6:34am
Msg #174857
**Both times they asked me "WHAT'S THIS?". I explained, although it's pretty obvious it's now their spouses sole and separate property. I would not offer an explaination as to why**
Larry, I don't explain what any kind of deed does even though I work for a real estate transaction attorney and "think" I know.
If I am asked, "what's this for?" I answer each and every time like this: "Oh, is this a surprise?? Were you not expecting to sign this instrument?"
Usually, the answer is that it is no surprise and yes, they knew they had to sign a deed but they still don't know why they have to; is it necessary?
=What were you told?
--They said I had to because blah, blah, blah but I still don't like it.
=Okay, well...if you don't want to then will you please write a note stating that?
--No, I'll sign.
-----------------
I am not going to tell them anything about what a deed does. I explain nothing. I only read aloud or point to a clearly identifiable term.
| Reply by lenelle/FL on 2/9/07 9:02am
Msg #174873
Newbies take note here
that Brenda in this post has just given some very important advice. I know that I have seen quite a few newbies on this board lately asking for help. Here it is- Always remember that you are not there to explain, and the example that Brenda gave is great. Take control of the signing - know what you can and cannot say and where to point out important information - Learn to read upside down - lol.
| Reply by Tracey Foughty-Deavers on 2/9/07 9:45am
Msg #174887
Re: Newbies take note here
I agree with Brenda and Lenelle that notaries are not there to explain documents, but to act as witnesses. What's more, a notary that tells a borrower about the meaning and legal ramification of the documents risks being charged with the unauthorized practice of law.
That being said, I worry that too many loan documents are signed that create legal nightmares down the road and the borrowers are walking into these situations blind. In addition to telling borrowers to talk to their loan officers, you can also let the borrowers know that they can seek their own legal advice. For example, if there is a right to cancel in a package, I tell the borrowers up front that this will give them three days to get to know and love their docs -- or to take it to their own attorney if they have any questions about the legal meaning or ramifications of any documents. And, if I see something in the documents that makes my skin crawl, I put a lot of emphasis on the part about taking it to their own attorney.
| Reply by sue_pa on 2/9/07 10:00am
Msg #174889
Re: Newbies take note here
...And, if I see something in the documents that makes my skin crawl ...
such as: couple divorced 10ish years ago but never transferred deed although their agreement was house to go to wife. Wife remarries. First husband's name naturally turns up as property owner when the title search is done. Manager of lender tells exhusband he must sign and when new husband signs (he was out of town at the time and docs were being sent to him for signature next day) and the original mortgage is released that the property will automatically come out of first husband's name and he'll automatically be released from this new mortgage. Duh!!!! And he then looks at me and says, "Isn't that right?" Of course I say, "I'm here to notarize this loan, I don't know anything about that." First husband said that didn't seem right to him but he'd sign and take docs to his lawyer within the 3 days. Of course there was no set of docs for him, just for wife - don't know if they made him an extra set after I left or not. I never knew what happened with this although I had my fingers crossed that he woke up prior to the loan funding. By the way, I found out this little twit (branch manager) has recently lost his job. Wonder why?
| Reply by Larry/Ca on 2/9/07 12:09pm
Msg #174935
Never an opinion or advise but......
I have always offered to explain what a documents was, RCT, TIL, Note, Deed. This is taught in all signing agent courses and I think as a signing agent you are expected to know what these documents are and be able to answer 'what's this' from the borrower. If there are questions with whats in a document they need to be addressed by the LO. Besides that a simple explaination as to what a document is usually is all they want to know. "I don't know, call your LO" is not a calming response, does not give them confidence to sign and does not promote a smooth closing, not withstanding the surprise Grant Deed. Again, I never give my opinion or advise but consider it a resopnsibility to be able to explain what a document is. I know that I'm expected to be able to do this and have been reminded of this in the instructions from some of my more sophisticated clients.
Larry
| Reply by BrendaTx on 2/9/07 2:49pm
Msg #174950
Re: Never an opinion or advise but......
Larry,
There are enough words in those documents to read and let the bwr determine what they mean. Me or you explaining is meaningless and IMHO dangerous.
I suggest you allow an attorney or escrow officer observe your delivery. I have and my way is identical to escrow officers/tc closers. The lawyer I work for has told me anything more or less would be UPL and misleading.
| Reply by BrendaTx on 2/9/07 2:59pm
Msg #174952
Re: Never an opinion or advise but......correction
I said "more or less" and it should just be "more would be UPL"
| Reply by Larry/Ca on 2/9/07 4:37pm
Msg #174956
Well, Brenda I guess...
My original and subsequent post here left it open for an interpretation that I was was giving an inappropriate explanation to borrowers. I assure you I am not. When the borrower sees the Note and asks 'what's this', my explanation is that it is the loan agreement, and outlines the terms of the loan. If they see the HUD and ask 'what's this' my explanation is that it's the statement that details costs and expenses that are associated with this transaction.
These are explanations that I offer up as opposed to saying 'I don't know, ask your lender'. I feel that these are incumbent, appropriate and professional responses for someone representing themselves as a Signing Agent.
My original post was simply an expression of dismay over being placed in a tense situation because the lender had neglected to inform and explain to the borrowers that one of them was going to have to sign over their interest in the property as a condition of the loan.
Larry
| Reply by BrendaTx on 2/9/07 5:15pm
Msg #174958
Re: Well, Brenda I guess...
Larry,
People hear what they want to hear. That's why I say as little as possible from my own interpretation and stick to the words in black and white during discussion of the why's and what's of loan signings.
| Reply by Tracey Foughty-Deavers on 2/9/07 9:17am
Msg #174876
I only saw this once. I asked the parties if there were intending to take the house out of both of their names and place it in only one name. When they asked me what that meant, I told them. Keep in mind, I am an attorney. I explained to them that I could not offer them legal advise as to whether they should do this or not, but strongly suggested they call their loan officer and/or their own attorney for clarification. The couple got on the phone and the loan officer said the same thing. The couple was unconvinced and asked me what they should do. I again explained that altough I am an attorney, I am not their attorney. However, they are entitled to have their own attorney review the docs. In fact, if they wanted to make a call right then, I had an extra few moments and could wait. Or they could sign the docs, take it to their attorney over the next few days, and cancel if they so chose. In the end, the loan didn't close that night, but was closed a few days later -- without the Deed.
I never heard from that company again, but I don't mind. Quite frankly, I would not have taken another closing from the company if I'd received another call.
Let's get something straight. It is illegal to discriminate against someone because of their marital status. In my mind, that is what is happening. I don't know how other states handle the situation, but in VA, we simply have the non-borrowing spouse who owns an interest in the title sign on the Deed of Trust. This allows the company to foreclose on the house in the event of default even though the debt is in the name of only one spouse.
We all want to make things go as easy for our customers, the signing services/title companies/lenders. But I'm not going to create more problems for the homeowner down the road. Part of it is just plain professionalism and integrity. But also, for the lawyers who do this as well, you don't want to be the only person they remember in the transaction when a divorce takes place down the road and somebody finds out that he gave up an interest in their property that he didn't intend to.
| Reply by Stamper_WI on 2/9/07 9:27am
Msg #174882
I am not an attorney. I live in a marital or Dowager state. Both spouses have a marital interest in the home they reside in.
What I see mostly is deeds putting both names on. Usually its because the home was owned by one spouse already at the time of the marriage.
Some times they just like things "neat". When my husband and I divorced I QC'd any interest in 80 acres of land that he had purchased right before our marriage. We never lived there
| Reply by ZeeCA on 2/9/07 9:27am
Msg #174883
but you are not there in the role of an attorney to anyone
correct? you are there as a notary and I agree completely with Brenda.. we are not to explain no matter our background or the knowledge that we bring to the table...
mo
| Reply by Tracey Foughty-Deavers on 2/9/07 10:18am
Msg #174896
Re: but you are not there in the role of an attorney to anyone
When I do a closing, I am acting as a closing attorney -- not merely as a notary. I conduct closing the same way I did 15 years ago when I first got out of law school and worked for a law firm that did a large number of closings -- and the same way my lawyer boss did closings at his office when I acted as his paralegal 20 years ago.
At the beginnign of the closing I explain that although I am an attorney, I am not their attorney. I will give them the main gist of the document (e.g., the Deed of Trust means you pay you stay, you don't you won't). If they have a 3 day cancellation period, I tell them that up front as well, letting them know that this will give them time to thoroughly review their docs and take it to their own attorney if they so choose.
If the borrowers start asking a lot of questions during the closing, I again remind them that I am not giving them legal advise, nor am I telling them whether they should or should not sign the docs. That is between them, their loan officer, and their own attorney. However, if I can answer simple questions I will. (For example, every 4th or 5th closing, someone asks me what is a mortgage tax. This is something that is limited to VA and maybe one other state. I just let them know that it is a tax that VA has in certain mortgage transactions without going into how it is calculated or whether it should or should not apply in their situation.)
Before anyone objects that this is not what the signing service thought I was doing, rest assured, my clients know how I view closings and what I will and will not do. If a new client sends me a doc to sign that indiciates I will not explain anything, I call the prospective client and explain how I do closings. I've only had one prospective client tell me that was not acceptable. And out of the thousands of closings I've done, I've only had maybe 2 not sign after hearing the explanation of the document -- and in both of those cases, the borrowers were already ranting about things the lender was doing and how they felt it was a sham. Instead, usually what happens is that if there is an issue, it gets resolved on the spot.
Plus, I would also like to point out that what I'm doing is also benefitting the lender. I've caught numerous mistakes that would have hurt the lender, and notified them of such. Plus, most of the time, my explanation promotes the signing of the docs because the borrowers are skeptical of companies that do business over the internet and here is someone else giving them a reasonable explanation as to why they need to sign the form.
| Reply by JAM/CA on 2/9/07 2:31pm
Msg #174948
Re: but you are not there in the role of an attorney to anyone
(e.g., the Deed of Trust means you pay you stay, you don't you won't). Love this. Mind if I borrow it?
| Reply by Gerry_VT on 2/9/07 6:50pm
Msg #174982
We don't explain, but sometimes signer should
If a signer asks what a document is for, it may not be enough to say "I'm not an attorney, you should ask your loan officer or your own attorney." It might be necessary to say "you should only sign documents that you have a general understanding of; what do you understand the document to mean?" and if the signer can't give an explaination that is reasonably close, not perform the notarization. It is our duty to determine that signers have a general understanding of what they are signing.
| Reply by Susan Fischer on 2/9/07 10:23pm
Msg #175031
I completely disagree with this advice. Part of our job is
to briefly explain the docs. Not interpret, not analyze, not justify, but tell the borrower, as was so rightly put in the above posts, the gyst of the thing. Love the "Pay you stay; don't you won't." That's a Deet of Trust (12-15 pages) boiled down to six words. The same can be done for most others.
I've had borrowers retired from the banking/savings & loan industry read some docs and roll their eyes (as with, for instance, some of the new neg-am products) and comment on the difficulty in understanding the legaleze.)
To quiz borrowers on what they think documents mean, then 'flunk' them if the 'answers' aren't "reasonably close," and terminate the signing? Not only no, but hell no. JMHO.
| Reply by Gerry_VT on 2/10/07 10:07am
Msg #175076
Re: Susan Fischer completely disagrees
Well, surely you wouldn't continue a signing if an elderly signer couldn't tell the difference between a mortgage and a Christmas card. Surely you would continue a signing even though the signer didn't know how to do compound interest calculations. Somewhere between these extremes, you have to draw the line. To me, a signer who think's he's retaining 100% ownership of a house when the paperwork says he's giving away 50% interest to someone else does not understand the general nature of the document.
| Reply by Susan Fischer on 2/10/07 4:37pm
Msg #175141
Of course you're right in that context; mea culpa, I took
your post as meaning a general rule for presenting docs. My apologies.
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