Posted by Susan Fischer on 6/8/07 11:47pm
Msg #194315

Liability discussion, con't...PAW, Ernest, et al:

Yes, of course I agree that we should be aware of the common documents associated with common loan products. But I do not believe we are, or should be, the last bastions of quality control and therefore responsible financially for an error or omission of a document in a package.

My point is, that experienced NSAs can alert appropriate parties of missing or faulty documents, but a “Thanks for catching that” is a far cry from “You missed that, and now you are liable for hundreds of thousands of dollars.” Regardless of a directive from a SS, Lender, or TC to “make sure the package is complete,” I submit that is not possible to the degree of certainty that would constitute legal liability for the completeness.

Lenders and TCs have their particular rules. States have rules and regs, as do the Feds. And the rules change all the time everywhere. Add that there are thousands of Lenders & TCs. Can anyone purport to know all of the products of all of the lenders, and then know all of the particular documents associated with closing all of those loans, according to all laws and regulations of the Feds and all the states, as a generally lay participant in the entire process? The final QC can be addressed, but only to the degree possible for the individual. The buck cannot land on our desks.

Look, not long ago, deals were negotiated face to face between borrowers and loan officers. The closing was face-to-face, borrowers to lenders or borrowers to Title – and maybe an attorney or two. The document producers sat with the borrowers and finalized the deal, dotting the “i”s and crossing the “t”s.

Today, telemarketers inundate the public with loan options, those “loan officers” secure the “acceptance” of a product, and then processors input data and computer programs generate loan packages (often containing 100 or so pages and growing.) These packages are either sent directly to the borrowers or NSAs, or emailed to SSs and forwarded to us, or electronically sent to automated doc delivery sites for download/printing. These various packages are often generated at breakneck speed, and frequently without the borrowers even being aware that a “deal” has been struck. NSAs receiving the packages have no control over the accuracy of the docs or the integrity or training of the senders. Further, NSAs come from all walks of life, many different backgrounds, levels of education, real-world work experiences, degrees of interest, and understandings of this job. That said, we do good work. We try to catch ‘em when we can.

But there is no National Standard for this nationwide work we do. The NNA and others have attempted standardization, but, as it turns out, there is still no consensus by either the States or the Feds in the form of regulation as to a standard certification (level of knowledge/training/legal responsibility) for the NSA. Hell, there’s not even a consensus about what to call us.

Are we in legal limbo? Looks that way. Professional Liability Coverage is available only to Professionals – those who pass a bar – whether in law, medicine, engineering, or other such practice because there are Professional Standards of Mastery for those disciplines. We strive to be professionals, but that aspiration differs widely from the designation of the Professional status of the doctor, lawyer, engineer, etc – we do not Practice. And until we do, then the responsibility for a missing/erroneous document from a loan package cannot end with us.

Those who hire us - assume the risk - of contracting lay workers with elementary knowledge/experience at worst, and considerable knowledge/experience/judgment at best. Perhaps a Hold Harmless Agreement signed by the consumer and hiring entity is a reasonable ‘protection’ for the unprotected NSA at present.

IMHN-LO.

Reply by Bob_Chicago on 6/9/07 12:55am
Msg #194318

Susie, very well thought out and written. Late here, or I

would make a more detailed response.
I personaly have never heard of a NSA being sued for other
than deliberate, fraudulent acts related to a loan signing, commited in capacity of NP
I try to keep up my skills and continue to learn.
True we are not licensed professionals in our capacity as NSAs.
I would prefer to keep it that way. State or federal regulation or
our professions would involve increased costs, training, time, testing,
responsibility, record keeping and who knows what else. The only thing
that would not increase would be our level of compensation.
State regulation would be very unworkable as the lenders, and TCs ore
rarely located in the same state as the bwr and/or the PIQ.
We all know how efficient federal regulation can be.
That is the reason that I try to discourage NSA from contactin state legislators
to remedy such issues as non-paymnent of NSA by signing services.
We fill a vauluable adjunt to to the current national mortgage lending business,
where we are generally the only warm body that the bwr ever lays eyes on.
The best way to avoid NSA liability is to follow our state's NP laws and
do our NSA job (whatever that may be) dilignetly and honestly.

Reply by Susan Fischer on 6/9/07 1:41am
Msg #194319

Thanks, Bob. Not promoting regulation, please know -

just thinking about all the talk about Liability. E&O this, and Umbrella that. For *exactly* what risks? I'm trying to find some bright lines that by themselves define the NSA responsibility/duty.

Brenda eloquently states the common sense of the issue.

And your reminder of the pitfalls of Regulation begs more discussion - but only if the threats of liability for errors and omission loom much larger. Our sub-industry works hard at self-policing/education/teamwork/betterment. You're so right; collections are as old a damitall of self-employment as is work-for-hire. So, for now, the lawsuits aren't flyin', so let's keep shinin'.

Thanks again for your response, Bob.

Friday Night Cheers.

Reply by Ndwa on 6/9/07 4:03am
Msg #194322

"Hell, there’s not even a consensus about what to call us."

Here's my 30 secs pet peeve before I start passing the papers:
I am first and foremost a notary public who's been contracted as a third party to this transaction. Secondly, I am to ensure this package is properly executed. Therefore, my supporting role in this transaction can be that I'm a...
- Signing Agent: Yep, I can make as much as $100K.
- Facilitator: I don't have all day...Say no now or use RTC later.
- Stickman: Sign as printed (except for chicken scratch)...Or the consequences (rejection, funding delay, etc.) are yours.
- Courier/Messenger/Paper golfer: Don't shoot me.

Notary E&O is imo, just a another layer of cosmetic to attract more work with the risk of being a target for suit. Due diligence in getting the job done is all it take to be successfully in this business. Good customer service required one to act professionally and/or a professional attitude is as far as it goes for being an NSA.

GLBA will be everyone's worst nightmare if there ever is any governmental involvements. Of course, it will separate the cream and peanuts b/c there's going to be serious (vendor/client) compliance and liability issues where the real (business/professional) E&O come in play.

Reply by Susan Fischer on 6/9/07 9:07pm
Msg #194395

Andy, you crack me up. *Exactly. "Don't shoot me."

But: "GLBA will be everyone's worst nightmare if there ever is any governmental involvements." (ah-hem) The government is the ~source~ of the GLBA.

Privacy is an enormously big picture. But, we do a great job of self-policing in the sharing of information about shredding, internet security, deleting, and general guardianship solutions. I venture to submit that we, as a rule, guard the privacy entrusted to our care with dogged determination to a greater degree than some institutions. (Breaking news: 'Corporate Laptop left in Starbucks; film at 11.')

And NSAs have gone above and beyond the call of the Act by paying for submission to background checks.

You hit the nail on the head: we operate in good faith. Add due diligence, good business practices, common sense, and continued education and you have ~great customer service.~

And, you're so right. By virtue of being here, we're likely targets. Falling for the professional liability insurance gambit only serves to create a deep pocket (and a possibile source of liability?)

Still and all, anybody can sue anybody, and the cost of defense is outrageous. Any NSA attorneys out there who would offer pro se representation a little pro bono back-up to even up the fight?

Reply by Dennis D Broadbooks on 6/9/07 6:20am
Msg #194323

Agree Wholeheartedly...

...with your assessment, however there IS professional "non-Notary" E&O insurance coverage available to an NSA. The "catch" is that it can run as much as $2,500 per year & while I've not researched this (so don't assume this is gospel), it may not be available in all states. I'm of the opinion the ultimate responsibility for ensuring the completeness of a document package lies with the lender & title company. That also places them on the hook for any financial repercussions as a result. I also agree with Bob's comments about keeping "Uncle Sugar" at bay. We shouldn't be looking to the government for all the answers to our NSA dilemmas.

Reply by Dennis D Broadbooks on 6/9/07 6:22am
Msg #194324

Aw Shucks...

...I forgot to place my web site address in my post. Forgive me, Laura!

http://www.bnsllc.com

Reply by Marla_FL on 6/9/07 10:10am
Msg #194334

Re: Agree Wholeheartedly...

Let's break it down further...A lender/mortgage company provides the title company with the lender package which includes a very detailed list of closing instructions. The title company has the option of utilizing a notary for the delivery, witnessing, notarization (printing, etc...) and ensuring the proper execution of the documents.

Printing packages that are emailed to you does not include auditing the title companies work!

Yes we should know if we receive a lender package and a HUD. Aside from that, I have had one or two title companies that had ZERO title/junk docs. I questioned it and they confirmed.

With that being said, if a title company expects or needs their packages to be audited because they are unsure if they sent a full package, they send so many email attachments that they get confused or whatever the reason, they should request the package be audited and negotiate an appropriate charge or ask if that service is included in the price quoted.

I make every attempt to verify a complete package but do not feel it is part of my realm of responsibility. Every title company, lender and loan package is different and we are not title processors. We are not contracted to interpret the closing instructions. The lender requires that from the title company and if the title company ultimately does not email a complete package and they try to place blame on the notary, they are trying to shift blame.

One notary's opinion...

Reply by PAW on 6/9/07 12:57pm
Msg #194352

Some things should be obvious

Granted, the NSA is not an auditor. However, as Susan stated in the first post in this thread, an NSA should question if there are missing "standard" or common documents. Such as the HUD, Note, TIL, Mortgage/DOT, Exhibit "A" (legal description), etc. All too often, these packages are being thrown together without any QC checks, especially during EOM, and the processor may simply miss something. IMO, the Signing Agent should ensure that their package at least has what is commonly in every package for the type of loan (ARM, HELOC, RM, etc.).

Reply by Marla Escobar on 6/10/07 7:24am
Msg #194424

PAW-I agree but...

I agree that you should know what is in a package. The issue here is, as you stated, at monthend, it is very busy. The lender, title company and most notaries are all very busy. If they are not going to ensure that their work is complete, it is not a notaries obligation to make sure they did their job. If I make sure that the title company provided the lender package for me to print and I print it, along with the other packages, I have printed the packages provided to me and made sure that the component packages have been provided.

You will have a hard time convincing me that if the lender doesn't do their job the liability falls back on the notary. That is the topic of this post...liability. PAW...respsonding with all due respect...

Reply by BobRogers_FL on 6/10/07 12:41pm
Msg #194438

Works for me...been doing it for 8 years now and have been told by many attorney's that it is good to have (Disclosure Hold Harmless) it.