Posted by Calnotary on 7/9/07 3:35pm
Msg #199069

Strange notary situation. Opinions.

I was called to do a loan signing. LO will be present. We all went to the borrower's home and I waited almost an hour and borrower and LO were discussing the loan terms and they couldn't reach an agreement I end up telling them that I had another appt, and I couldn't wait so I left for my next appt.

I was in my next appt. and it was in a remote area with no cellular coverage. When I got back from this appt
I got a voice mail to come back so they could sign the docs. Well it was too late by the time I got the messages.

Anyways I end up asking how everything went? The borrower's told me that the LO notarized all the loan docs.

I thought it is a conflict of interest and you can not notarize a document that you have interest in,but What do I know? Or doesn't she have a financial interest in the loan?

Thank you for your opinions.

Reply by NCLisa on 7/9/07 3:56pm
Msg #199072

Banks often have loan officers in local branches that do smaller loans there, and they notarize the docs. This goes on all the time, and it is not a conflict of interest.

Reply by Philip Johnson on 7/9/07 4:07pm
Msg #199075

I believe there is a difference in the situations. Every bank that I have had something notarized, there is a person who does this and he/she has nothing to gain from the notarization other than continued employment in the bank. In the above case if this person as a LO gets paid off the HUD in any since of the term, he/she as violated his/her notary guidelines as i understand them.

Reply by MariaIECA on 7/9/07 4:13pm
Msg #199077

Re: Not a conflict of interest.

Each office is different. I know some offices will not allow their LO's to sign their own clients. My husband is a Loan Officer and Notary, but his manager does not like the LO's to sign their own borrowers. I am also a Realtor and Corporate will not allow me to sign ANY of their clients.

Reply by Philip Johnson on 7/9/07 4:27pm
Msg #199081

Good thing your husband's boss...

doesn't let him sign his own clients, it looks like the state is not so hip on that.

CONFLICT OF INTEREST
A notary public is not prohibited from notarizing for relatives or others, unless doing so
would provide a direct financial or beneficial interest to the notary public. With California’s
community property law, care should be exercised if notarizing for a spouse or a domestic
partner.
A notary public would have a direct financial or beneficial interest to a transaction in the
following situations: (Government Code section 8224)
• If a notary public is named, individually, as a principal to a financial transaction.
• If a notary public is named, individually, as any of the following to a real property
transaction: beneficiary, grantor, grantee, mortgagor, mortgagee, trustor, trustee, vendor,
vendee, lessor, or lessee.
A notary public does not have a direct financial or beneficial interest in a transaction if a
notary public is acting in the capacity of an agent, employee, insurer, attorney, escrow, or
lender for a person having a direct financial or beneficial interest in the transaction.
If in doubt as to whether or not to notarize, it is recommended that you seek the advice of an
attorney.

Reply by Charles_Ca on 7/9/07 5:16pm
Msg #199096

Check your Handbook, it's not conflict by definition! n/m

Reply by John_NorCal on 7/9/07 10:01pm
Msg #199136

Re: Check your Handbook, it's not conflict by definition!

Not only is it not a conflict by definition, but also by rulings of the SOS office as far back as 1974 when I first became a notary. There is not a conflict of interest as long as the notary does not have a vested interest in the property to be conveyed or encumbered, meaning that they are not on title.

Reply by Philip Johnson on 7/9/07 10:21pm
Msg #199143

Seems to me that it would be $150.00 well spent

to let someone else notarize, just to cut down on trouble that may arise.

Reply by Hugh Nations Signing Agents of Austin on 7/9/07 6:13pm
Msg #199109

I would think that if a person is to earn a commission on the loan to be closed, he or she has a direct financial stake in the transaction, and that would be a conflict. As another poster noted, continued employment unrelated to the transaction is not necessarily a conflict.

Reply by Margaret_FL on 7/9/07 6:59pm
Msg #199115

I am a loan officer and we attend our own closings but we hire our own notaries because we can not be
the notary on a loan we originated. I conduct the closing and explain the documents, the notary does the identification and notarizes the documents.

Reply by christiSocal on 7/9/07 8:09pm
Msg #199125

My understanding is that in Calif it's Ok, maybe not smart, but legal.

Reply by CJ on 7/9/07 10:21pm
Msg #199142

What I would do.

I woult offer to do these two things:

1. Tell them I had to leave, but I would notarize the docs that had to be notarized. I would explain that the loan is no good unless ALL the docs are signed, so if they decide not to sign, notarized docs won't make any difference.

2. OR I would say, "I will be back in two hours" (or whatever). If you guys decide to sign, go ahead and sign the way it's typed, etc. You can put the notarized ones aside. I will come back and double check everything, and then we can sign those last few notarized docs.

Reply by JanetK_CA on 7/11/07 3:13am
Msg #199326

Yep. Big difference between what is technically legal and what is ethical or not. I'd hardly call a LO who has just spent an hour talking a borrower into signing a loan an "impartial witness"! jmho