Posted by Bruce_CA on 6/22/07 5:46pm
Msg #196514

Purpose of "California Per Diem Interest Disclosure"

How would you best describe the "California Per Diem Interest Disclosure". This document seems to have some very specific uses that I can see, but I want to see how people here describe it to there clients.

Thanks
Bruce

Reply by Gary_CA on 6/22/07 8:59pm
Msg #196536

Here's how I do it...

Depending on the borrower and the time, I usually do take a second to explain that one...

Here's my script... more or less...

The Title Company is not allowed to release money until the deed records, and they don't record the deed until they have the money in hand. So it's almost impossible for them to get the money, record the deed and pay everyone on the same day, especially since the county only records deeds one time in the morning. What this means to you is, you'll have to pay interest on both your old loan and your new loan while the money is at the Title Company and they're getting the deed recorded. Usually that's one day, but if the money comes in on Friday, it can be all weekend and even three days if Monday is a holiday...

Now this form gives you an option to check this box and tell them not to fund the loan on a Friday... but I think that's bad luck. It's your right, but I figure any day the bank wants to fund is a good day. If they're ready to fund on Friday and you make they wait till Monday something could go screwey. Up to you."

Ya know they always check the box that says fund any day and they'll pay the interest.

YMMV

Reply by MikeC/NY on 6/22/07 10:24pm
Msg #196554

Re: Here's how I do it...

<<Now this form gives you an option to check this box and tell them not to fund the loan on a Friday... but I think that's bad luck. It's your right, but I figure any day the bank wants to fund is a good day.>>

I think you're crossing the UPL line here - any time you say "I think" or "I figure", you're giving advice.

Reply by Gary_CA on 6/23/07 9:45am
Msg #196621

Only lawyers are allowed to think?

I see your point, it's advice and I probably shouldn't give it... hmmm... you may have me convinced.

But for crying in the sink, it's not LEGAL advice. It's advice from having real estate construction and development business in my family all my life.

There's a bizillion little things that can hold up loan funding. We all know that... and Monday, of all days, why would you want to trust that all the people that have to get your funds wired will all come to work on Monday?????

That's not legal advice, that's life experience advice.

But you're right, it's more than just doin' my job, so I'll knock it off.

Reply by BrendaTx on 6/23/07 10:11am
Msg #196627

Re: Only lawyers are allowed to think?

I approach these "choices" by reading aloud and stating nothing further.

Your logic and insight on this is appreciated...but darn it, Mike has a point...I think in our world, notaries are not allowed to know anything... or to think.

Reply by Sylvia_FL on 6/23/07 12:06pm
Msg #196653

Re: Only lawyers are allowed to think?

You are there as a Notary/Signing Agent, you are not there to give them advice on the options on the documents, they are legal documents and your advice could be considered UPL.
You are to be a disinterested party!

Reply by MikeC/NY on 6/24/07 9:42pm
Msg #196748

Re: Only lawyers are allowed to think?

You can certainly give non-specific info based on your life experience, but the point where you cross over into UPL is when you start to apply that knowledge to a specific situation.

There's a huge difference between saying "I've seen this before, and here's how others have handled it" , and saying "I've seen this before, and I think you might want to consider..." That's the essence of UPL - applying the law to the facts.

The words "I think" should not be in our vocabulary in these situations, and it's probably safer to just dummy up and not say anything. If you have experience in the field and want to share that with the borrowers, it really needs to be done in a way that doesn't influence them one way or the other,

Reply by JanetK_CA on 6/23/07 9:07pm
Msg #196692

I try to keep it simpler than that. I say something to the effect that: the amount of interest you pay can be affected by the day of the week on which your loan funds. This document states what your per diem interest amount is [IF it's filled in...], what your rights are in relation to that and how it impacts you. You may also choose to have the escrow company make that choice for you, which would likely mean they will fund as soon as possible.

Typically, their eyes glaze over and they choose to have the EO decide for them. Occasionally, they'll want to read it, but I can only remember one time when someone made a proactive choice on that doc - and he was a sophisticated professional investor.