Posted by ZeeCA on 6/7/07 7:44pm
Msg #194131

Another interesting email...

We came across the following information at a recent compliance seminar and deemed it important to pass along. Many of you are already aware of this, but some of you may not have heard: For anyone who does a refi signing, you must provide the borrower with two copies of the SIGNED AND DATED 3 day rescission form. If the Buyer is not provided with that, they may rescind the loan for up to 3 years, at which time the lender has to refund all fees and interest paid on the loan and reconvey. Needless to say, the signer may be held liable. We know that unfortunatly not all lenders include enough copies in the docs, so it's a good idea to double check the package before you head to the signing

now who does not leave the copies???????

Reply by Laura Vestanen on 6/7/07 7:51pm
Msg #194133

Re: copies of RTC

Great post, Zee.

If borrowers do indeed cancel after a few years, the lender will go after the NSA for damages resulting from expenses and lost interest income. Yikes!

This is a great example of why we need both types of E&O insurance:
*Notary E&O insurance for our notarizations
~and~
*General malpractice (E&O) insurance (for the non-notary part of our work)

Reply by MikeC/NY on 6/7/07 8:58pm
Msg #194144

Re: copies of RTC

<<If borrowers do indeed cancel after a few years, the lender will go after the NSA for damages resulting from expenses and lost interest income. Yikes!>>

I agree this is possible if the docs were sent to the NSA - we're supposed to know what the requirements are.

However, if the docs are sent o/n to the borrower, it's not the NSA's responsibility to figure out whether there are enough copies. What are you supposed to do - adjourn the signing while you find the nearest Kinkos? Do you get paid extra for that?

If the lender provides the documents directly to the borrower, they are the ones who have to answer for any deficiencies - they can't pass that responsibility off to the NSA, and can't hold the NSA responsible for their own mistakes.

Reply by BrendaTx on 6/7/07 9:53pm
Msg #194149

Re: copies of RTC

I just can't get my head around this. It makes no sense to sue the notary when other deep pockets are available. It makes more sense to use the notary as a witness for the defendant to conclude that the job was done appropriately. How do you prove you didn't get signed copies of something? I can only see that happening if there was not a signed RTC with the lender's package. JMHO. It's one person's word against another. What am I missing in this puzzle?

Reply by ZeeCA on 6/7/07 10:15pm
Msg #194151

This email was sent out to me... from a SS.... n/m

Reply by BrendaTx on 6/8/07 5:11am
Msg #194181

Zee, what I am saying is that this is yet another threat :< n/m

Reply by aciardoNY on 6/7/07 8:03pm
Msg #194134

Do you think we could be held accountable if they overnighted us the the docs ? Wouldn't that be on them to make sure there are enough copies? If I'm doing edocs, I always make sure I have enough.

Reply by PAW on 6/7/07 8:04pm
Msg #194135

Not exactly ...

>>> ... you must provide the borrower with two copies of the SIGNED AND DATED 3 day rescission form. <<<

Title 12 (Reg Z) does not state that the disclosure must be "signed and dated".

[quote]
(b) Notice of right to rescind. In any transaction or occurrence subject to rescission, a creditor shall deliver two copies of the notice of the right to rescind to each consumer entitled to rescind (one copy to each if the notice is delivered by electronic communication as provided in Sec. 226.36(b)). The notice shall identify the transaction or occurrence and clearly and conspicuously disclose the following:
(1) The retention or acquisition of a security interest in the consumer's principal dwelling.
(2) The consumer's right to rescind, as described in paragraph (a)(1) of this section.
(3) How to exercise the right to rescind, with a form for that purpose, designating the address of the creditor's place of business.
(4) The effects of rescission, as described in paragraph (d) of this section.
(5) The date the rescission period expires.
[/quote]

Note that it simply states that the two copies of the notice must be delivered. It is up to the lender whether or not they wish to have acknowledgment of receipt (signed and dated) and whether or not the two copies that must be delivered to the consumer are signed and dated. Most lenders do require a signed copy to be returned, some requiring that the consumer also receive signed/dated copies. One lender that I know of only requires initials on the lender's copy and one lender doesn't require any acknowledgment on the form itself, but has another form stating that they received two copies (each) of the notice.

Reply by SharonMN on 6/7/07 10:30pm
Msg #194153

Re: Not exactly ...

I agree with PAW.

I completely understand that the dates in the body of the RTC have to be filled in on the borrower copies. Otherwise the borrower wouldn't know when their right to cancel was up. The lender can ask for a signed copy so they have proof that the borrower received the RTC. But I don't think the regs require that the copies left with the borrower need to be signed and I can't think of a reason why they would need to be. The borrower doesn't even have to return the RTC form if they want to cancel - a letter they draft themselves is also acceptable.

Reply by Susan Fischer on 6/8/07 3:17am
Msg #194179

Right on...it says right *there* that

"...a creditor shall deliver two copies of the notice of the right to rescind to each consumer entitled to rescind (one copy to each if the notice is delivered by electronic communication as provided in Sec. 226.36(b))."

First, the Creditor must deliver, and secong, only ONE copy is required if EDOCS.

The law says borrowers get a copy of the NOTICE, and not that the Notice is a form for the purpose of rescinding. (b)(3).

I'm not in the document production, copying, or legal business, and I'm not upping my E&O or getting a Prof Liability policy. Borrowers pay $100+ for 'document preparation,' and the onus is on the document producers to create complete packages.

And thinking about crazy EOM days, and the ensuing edoc chaos, the niceties that professional NSAs provide in the normal course of the day to help insure complete packages are much more difficult to deliver.

No matter what "requirements" the hiring entities stuff into their comfirmations, to imagine that even a seasoned NSA could, or even should, know the necessary docs for every loan product out there (and there are hundreds) is preposterous. Some are so obvioiusly vague..."*Some Documents*, etc..." Et Cetera? And, many times packages will include docs that are obviously not applicable, yet because they are included in the package, do we then decide they need not be signed?

The comment about 'deep pockets' merits serious consideration, as does the bottom line fact that NSAs do not produce, nor are we responsible for, the *content* of the loan packages for which we are charged with obtaining signatures, initials, and dates - and notarizing where indicated.

NSAs who assume a gatekeeper position, IMHO, assume too much. It is the responsibility of the Creditor to provide the documents that comply with the law and seal the deal.

Not Ours.

Reply by PAW on 6/8/07 5:29am
Msg #194184

Re: Right on...it says right *there* that

>>> ... only ONE copy is required if EDOCS. <<<

I may be wrong, but I don't think section 226.36(b) refers to edocs.


Sec. 226.36 Requirements for electronic communication.
(a) Definition. ``Electronic communication'' means a message transmitted electronically between a creditor and a consumer in a format that allows visual text to be displayed on equipment, for example, a personal computer monitor.


This section deals directly with the E-sign Act when the documents are presented in an electronic format visually. Our edcos are transmitted electronically, but are not presented electronically, so, imo, does not qualify under this section. Thus, even with edocs, two copies of the notice must be delivered to each consumer.

Reply by Ernest__CT on 6/8/07 6:10am
Msg #194186

Politely disagreeing with some points mentioned above.

I take serious issue with the phrase "... even a seasoned NSA could ... know the necessary docs for every loan product ...". A Notary Signing Agent should know all of the common documents that every refinance, Home Equity Line of Credit (HELOC), and Reverse Mortgage have. A red flag should go up, for example, if the borrower is (re)mortgaging their primary residence and there is no Right to Cancel (RTC). I've lost count (actually, I've never counted) of the number of times I've called to report that the non-obligated spouse is on title but not mentioned anywhere in the loan docs.

Part of being a professional Notary Signing Agent is knowing what documents to expect and when to expect them. Like it or not, lenders, title companies, and signing services depend on us for quality control.

Reply by PL on 6/7/07 8:09pm
Msg #194136

Just looked through my home papers and it looks like

this ol' boy is going to get some fees and interest back. The title company only gave me one copy of the RTC, lets see how far that argument gets.

Reply by Bob_Chicago on 6/7/07 11:12pm
Msg #194160

Probably not real far , since you most likely signed.....

and dated a receipt (original RTC) stating that you did.
in fact receive 2 copies of the form
Unless the copy that you have does NOT show the appropriate
dates, your claim should probably be written on very soft paper.
Would not want you to get a rash.
And, yes , I know that you were not serious.

Reply by jba/fl on 6/8/07 12:45am
Msg #194168

Agree w/Zee

I will do my research, but I did receive law on this from ??? that stated that 'each borrower' must have two copies of the RTC, signed and dated, or they had 3 years to cancel instead of three days. Ever since I have been ultra diligent on this point in my own work, but as noted, don't know what to do when bor. gets copies sent to them directly. Then I guess it is TC's problem?...?

Reply by PAW on 6/8/07 5:23am
Msg #194183

Please "Show Me"

>>> ... I did receive law on this from ??? that stated that 'each borrower' must have two copies of the RTC, signed and dated ... <<<

Can someone please show me a law, statute or state or federal directive that states the borrower must have "signed" copies. If that's the case, then there are two major lenders that I know of, who are violating this "law".

Reply by SharonMN on 6/8/07 11:07am
Msg #194213

Re: Please "Show Me"

I think what happened is that somewhere along the line, somebody interpreted "completed" copies of the RTC as "signed and dated by the borrower" copies of the RTC. Maybe our favorite nationwide notary organization.

If you think about it logically, it all makes sense.
- Don't give the borrower a form that says "your right to cancel expires at midnight on [blank space]. That's not complete.
- If the lender were to email the borrower the right to cancel, they don't need to send two emails because borrower can easily print or forward all the copies they want while still retaining the original.
- If the signing agent gets the docs by email, borrower doesn't have the ability to print or forward copies while still retaining the original, so the borrower still has to get two copies.

Reply by jba/fl on 6/8/07 11:25am
Msg #194215

Re: Please "Show Me"

I will look it up this week-end as I am busy signing this week. I know everyone wants proof, but it has been a while since I read this, and sometimes we just file away in our memories, apply to own situation and go on with our lives. But, like Zee, I also got notice again this week. Will prob. start new thread.
I certainly did not post to enrage anyone with call to battle stations. Many others have stated that notarys should not be penalized for carrying out orders, and I agree wholeheartedly, and there is nothing I can do to remedy TC's short-sightedness on this issue w/ON docs, and I am not chastising anyone else for whatever they do/do not do. I also agree w/many others points of view, and I also disagree from time to time, and I agree that we should agree to disagree.

Reply by BrendaTx on 6/8/07 6:49am
Msg #194188

Re: Probably not real far , since you most likely signed.....

That's my point, too, Bob, et al....the notary closer's function has been going on for a long time...but how many are getting sued by lenders? They do get called into depoisitions to admit they have closed the heloc in the wrong venue in Texas (as a witness), but it is the lender's burden for letting that slip by. The notary is a notary and courier...not a legal department. And every day there is some kind of new threat that the Notary is going to become responsible for something else and be sued into eternal ruination. Really? Really??? Then why would so many people be doing this for peanuts...which is actually what is offered and accepted *most* of the time. We need to do our jobs as best that we can, for sure...but think about this...

The NR community is probably only about 10% of the people who do loans across the USA. Those who read here are more educated on the nuances of loan packages than many.

And, believe me, from what I have heard from a few insiders who see the notary work returned, it is being done on a wing and a prayer with a host of half-a$$ notaries who know very little and who do this a little here and there for the extra $$$. I truly believe most of the work returned is crap.

It's pathetic...yet...we don't hear much about notaries getting sued for being half-a$$e$...we hear of legal ramifications only when they clearly BREAK a NOTARY law while participating in some kind of FRAUD.

Notaries are not making the big bucks...lender and escrow is. That's where the law suits will go. We carry papers around (as Joe says) and we witness signatures, point to correct lines to sign. Half the time, and I do not believe I exagerate, notary signing work is returned to the title company done incorrectly and has to be fixed. Yet...no one's in court over it.

Just more threats to *make 'em do right." ('em = the NSA). It's too bad the industry doesn't take the time to qualify the notary before they use the notary. Obviously, the great and wonderful "Certified NSA" status from the XYz didn't fix the RTC problem...or we wouldn't be hearing about it.

Reply by Ernest__CT on 6/8/07 7:26am
Msg #194192

I'm with Brenda (as nearly always). n/m

Reply by kathy/ca on 6/8/07 10:53am
Msg #194211

I too received the email from that SS. Made me wonder why

it was sent out just "outta the blue". When doing e-docs I am very diligent about making sure each signer gets 2 copies but still makes me wonder why this SS thought it necessary to send out this email to all their notaries. How in the world could someone prove they only received one copy, sounds like a case of "he said, she said"!

Reply by Susan Fischer on 6/8/07 11:56pm
Msg #194316

Amen! n/m