Posted by Mary Irene Mccomb on 5/3/07 7:28pm
Msg #188700

new 1003

how are you handling this new front page. I was only having them sign the top if it is a joint account. But a few weeks ago I had to go back and have it signed at the top by a single borrower. Now I just have everyone sign it.

Reply by Lisa Prestegard on 5/3/07 8:11pm
Msg #188707

It should always be signed. Period. It has been misinterpreted often, but it must be signed at the top, whether there is one Borrower or two.
If you read the paragraph under the heading "Uniform Residential Loan Application", it states that "Applicants should complete this form as Borrower and Co-Borrower, as applicable". If there's only one Borrower, then only one person signs at the top-right. If there is a Co-borrower, they sign at the top-right also, and by doing so, they further agree that they are applying for joint credit. Whether individual or joint credit, all boxes on the URLA must be completed IF applicable.

Reply by Sylvia_FL on 5/3/07 10:27pm
Msg #188720

Re: new 1003 - Lisa

I have to disagree.
First, I was told by a title company when the new 1003 came out that if there was not a co-borrower, then the borrower should not sign the top line as it was only for borrowers applying for joint credit. I have never ever had a sole borrower sign at the top.

Second, if you go to https://www.efanniemae.com/sf/formsdocs/forms/pdf/sellingtrans/1003.pdf

The 1003 states above the place for signatures in the top portion:
"if this is an application for joint credit, Borrower and Co-borrwer each agree that we intend to apply for joint credit"
Why would a borrower who is obviously not applying for joint credit sign that he/she is intending to apply for joint credit?

Reply by Lisa Prestegard on 5/3/07 11:10pm
Msg #188729

Re: new 1003 - Lisa

Then we agree to disagree, Sylvia, respectfully.

Please note the operative word "IF". "IF this is an application for joint credit...etc"

What the paragraph doesn't state, unfortunately, is that if it is NOT an application for joint credit, the sole Borrower must still sign.

I attended a very thorough training seminar on this matter, and was told that the Co-Borrower line AND the language was put there for a specific reason; so that the CO-BORROWER understood that they were applying for credit (becoming financially liable) and not just "going on the deed". The Borrower signs. Period. IF there is a co-borrower, that person must acknowledge at the onset of the application that they indeed understand that they are applying for credit.

Reply by LynnNC on 5/4/07 8:10am
Msg #188756

Re: new 1003 - Lisa

The instructions are poorly written. I originally interpreted the instructions to mean that only co-borrowers signed at the top, however many title companies will have the name typed at the top for a sole borrower. Now, I always have a sole borrower sign, even if his/her name is not typed.

Reply by JanetLA on 5/3/07 9:01pm
Msg #188712

Where?

Did you get the information that everyone had to sign (one borrower or two)?? I daresay that it is open for interpretation.

Reply by Lisa Prestegard on 5/3/07 9:52pm
Msg #188717

No, it really isn't open to interpretation

And I am not saying this in a smug manner, but this issue was argued ad nauseum not so long ago. It's really very clear. Read Fannie Mae and Freddie Mac guidelines (if you can locate them). The rules are clear. EVERY applicable box on a 1003 must be completed. (*note the word applicable) I received this training while working as a Loan Officer prior to becoming a signing agent.
Borrower signs. IF there is a Co-Borrower, Co-Borrower signs and by doing so acknowledges participation in the loan application process (not just marital rights, for example). Just because a Co-Borrower may not exsist does NOT exclude the Borrower from having to sign the top of the 1003.

Reply by GF_CA on 5/3/07 10:24pm
Msg #188718

Re: No, it really isn't open to interpretation

Yes Lisa is right. Even a single borrower has to sign on the top of the first page.

Reply by pan/nd on 5/3/07 10:25pm
Msg #188719

Re: No, it really isn't open to interpretation

Lisa,

Whether one agrees or disagrees about how the top portion of the 1003 should be signed,

I think it's fair to say that there is still a goodly amount of confusion over the issue . Those

who concoted the the top paragraph should re-think the whole thing for two reasons:

1) If it's unclear...it should be re-done. It obviously was and is and will continue to be if nothing is done.

2) The whole paragraph at the top should be put at the bottom where any logical-thinking person would look for it.

The numbskull(s) who drafted it and decided the top of the form was the place to put it,
need an MRI or a Cat-scan on the portion above the shoulders.

And while we're on the confusion factor...

The first box on the TIL (Truth-In-Lending)--aka annual percentage rate--should be tossed out and re-worked as well.

I had two borrowers today in two separate loans..decide to cancel because of it. But, they thought better of it when I explained what it was.

It's a government form...so I suppose congress would have to change it or some regulatory agency. But, it too, IMHO should be knocked out and reworked.

But what do I know.

I could tell the "form people" what I think...but they could care less and will do what they want anyway.

Reply by Lisa Prestegard on 5/3/07 11:03pm
Msg #188727

Yes, it could (and should) be more simply put...

but we all know how the gov't agencies work, don't we? I wouldn't count on it changing any time soon. I have my own horror stories of dealing with RECD/HUD/USDA for nearly 10 years. I still have nightmares of 12-month projected budgets based on 9-month actuals... ugh.

I think the reason (not that it's reasonable!) that the signature lines were put at the top is so the Co-Borrower (provided there is a Co-Borrower) can understand at the onset of application that he/she is applying for credit by completing the application.

The TIL serves a useful purpose, but I agree that it's confusing for 99% of the population. Have you done a Countrywide loan? If so, you see the "Definition of Truth in Lending Terms" that follows directly. I take that document and put it along side the TIL and tell the Borrower that it best explains the TIL. I don't explain. I don't opine. I just show them the page and most of the time, they figure it out. I think every TIL should have a "Definition of Truth in Lending Terms". I keep one handy at every signing for exactly that purpose.

*sigh*
When they make me Queen, things will change... I promise

Reply by pan/nd on 5/3/07 11:15pm
Msg #188732

Re: Yes, it could (and should) be more simply put...

OK, when you run for Queen, I'll vote for you.

My take on the "definitions page" is this:

If you need a definitions page to go along with the TIL...then there's a problem with the TIL

And, in fact, there is.

But my ranting and raving won't do diddly.

However, as my father-in law used to say " Every little bit helps said the mouse as it pissed in the ocean."

Reply by Lisa Prestegard on 5/3/07 11:27pm
Msg #188736

From one mouse to another, I couldn't agree more

I just use the cheat-sheet to make my time spent in their home less stressful, less eventful.

And as for the Queen thing... I've been threatening my kids with that for years. Still works. That and wooden spoons. Magic, I tell ya.

Reply by JanetLA on 5/4/07 8:28am
Msg #188761

YES it really IS open to interpretation

Unfortunately law school does teach you to read and understand every word. The loan application says very clearly right above the signature lines "If this is an application for joint credit, Borrower and Co-Borrower each agree that we intend to apply for joint credit (sign below). Most signing companies have borrowers sign every time to avoid confusion. However, there is a misunderstanding because there is no law or guideline that says that a single borrower must sign. The title/signing companies just find it easier to have everyone sign since it will not invalidate the document. I understand the importance of completion of forms and the need to not leave blank lines... Three years of law school teach a person some things. But I do not agree that it is mandatory. Maybe in practice it is understood that a single and joint credit borrower will always sign, but in fact, it IS NOT the law, or the rule. Have a great weekend to all.

Reply by Susan Fischer on 5/5/07 10:59pm
Msg #189042

Agree, JanetLA. I have single BOs put 'N/A' to show (s)he

saw the signature line, but is not a joint applicant. Never had a problem.

Reply by Joe Ewing on 5/3/07 10:48pm
Msg #188722

I can remember when every loan had both the old and the new 1003. My signers have been signing the top of the new application since the first one I was sent out with had a bright pink post it note on it reminding me to have both borrowers sign.

The paragraph next to the signature line is ambiguous though.

Reply by Joan Bergstrom on 5/3/07 11:12pm
Msg #188731

The way I handle is if I get hired by a new title/escrow/lender; I always have the single borrower sign the top of the 1003.
You will already know how to handle this issue with your "bread & butter" companies.

Just a confusing form that should not have been changed in 2006 or was it 2005? How time flies!

To me, its obvious that its only for joint credit; but there is much disagreement by many people in our industry.
This is just what I do and not a legal opinion by any means.

Reply by Lisa Prestegard on 5/3/07 11:24pm
Msg #188735

Maybe this will explain it...

Revised Authorized Changes page for URLA
Freddie Mac's Authorized Changes page for the URLA has been updated to reflect the correct site in the California Civil Code that allows married persons to apply for separate accounts. The language now reads: "Pursuant to California Civil code 1812.30(j) a married applicant may apply for a separate account."
http://www.freddiemac.com/uniform/unifnews.html

Now, while that is not exactly the language used on the URLA, the revision date (12/05) coincides with the changes to the URLA. It all has to do with the Co-Borrower's awareness of applying for joint credit (IF there is a co-borrower).

Reply by pan/nd on 5/3/07 11:37pm
Msg #188737

Re: Maybe this will explain it...

Not to me it doesn't...


It's a lawyer's world...and that's what all that mumbo-jumbo at the top of the 1003 is all about.

It's trying to head off a lawsuit or making corrections because of one..and failing miserably in both departments because it's so ambiguous.


And, frankly, if one put the top 1003 language before a panel of lawyers...they wouldn't be able to decide how it should be signed either.

The whole thing is a farce.

Reply by Bob_Chicago on 5/4/07 1:15am
Msg #188739

PAW has convinced me that the intent of the regulatory....

agencies was to only require that it be signed if there are two
bwrs. We went round and round on this.
That said, I have ALL bwrs , single and multiple ) sign the 1003 at the
top, unless I receive specific instuctions not to. (never happened to date.)
Most lenders and TCs instuct me to have it signed by single OR multiple bwrs.
I have heard plenty of stories where NSA were regd to go out to have a single
bwr sign the top. Hear of ONE instance (from PAW ) where he was regd to go
back out because single bwr signed top.
. The language was apparently written by a committe on strong medciation,
and can easily be interpreted both ways. I think that it could be easily clarifed by
adding something like " If there is only one borrower, do NOT sign here. "
I believe that the safest practice is to have single bwrs sign top.

Reply by Ndwa on 5/4/07 2:41am
Msg #188745

Think who we are and what we do

We are NSA, there's no place for us to read into and interpret docs. Our job (at least mine) is to make sure every signature line is correctly signed. Remember more is better than less?

Reply by Lisa Prestegard on 5/4/07 6:39am
Msg #188748

Re: Think who we are and what we do

"Our job (at least mine) is to make sure every signature line is correctly signed."

Wise advice, Andy. And since it's a signature line, it should be signed

Reply by BrendaTx on 5/4/07 7:20am
Msg #188751

Crazy as it seems

If I don't know the policy of the folks I am signing for, I call. If I can't get them on the phone, I make two copies and do it both ways, then find out which one is correct. I have had some borrowers refuse to sign if it is not joint credit. Usually they are the ones who are already mad about an issue with the loan and the joint credit issue. I have never had to redo one, but then again, I don't do the volume that Bob or Lisa do.

Reply by LauriecPA on 5/4/07 8:20am
Msg #188760

Re: Crazy as it seems

Brenda, What a great idea! I have never had a single BO sign it, unless their name was typed underneath. (I work with two title cos. that specifically say in their instructions, "Only have the BO's sign if they are applying for joint credit." I have never been called and asked to go back out to have a single BO sign. Now, after reading this...I'm wondering if I'll get a call...

Reply by Lee/AR on 5/4/07 8:30am
Msg #188762

I do both ways...

Unless there are specific instructions or a name is typed at the top. Make a copy, one is signed; one is not. So far, so good. Is this nuts? Yeah. But saves a return trip on my dime/time.

Reply by Dennis D Broadbooks on 5/4/07 8:43am
Msg #188765

One Would Think...

...after two years of utilizing this new language in the 1003 there'd be a "uniform" interpretation of its meaning & how the borrower(s) should sign. Personally I can see both sides of the argument as its been presented here in this thread & other past postings, but believe the "intent" is to have the lines on the 1st page signed ONLY when the two borrowers are applying for joint credit. To be on the safe side it probably does make sense to have them sign both ways on separate forms & let the powers that be decide which is correct, discarding the other. Great idea, Brenda.

BTW, I've never had a 1003 returned to me for correction when a borrower applying for the loan on his/her credit alone didn't sign the 1st page. I've also never been instructed to have a single borrower sign on the 1st page of the 1003 & I've asked multiple TC's repeatedly if they should.

Reply by JanetLA on 5/4/07 8:56am
Msg #188769

Re: One Would Think...

Exactly the intent. The signing and title companies have borrowers sign across the board to avoid confusion. It does not invalidate the document to have a single borrower sign. The point of the signature is to make certain that borrowers understand that the co-borrowers credit is used in determining interest rate and loan terms. Federal law allows borrowers to apply for separate credit. Fair lending laws are the reason for these types of issues. The wives of yesterday used to rely on a husband's income and credit score. The fair housing and lending practices now protect them from that. So... while it is acceptable for single borrowers to sign, and most title and signing companies put it in big bold letters to have EVERY BORROWER SIGN AT THE TOP OF THE NEW FORM, it is just to keep things simple.

Reply by Brad/AZ on 5/4/07 9:47am
Msg #188772

Why Not?

I agree with that. To clarify, although I don't believe it is necessary for a single primary borrower to sign that line, it is more common to have an issue with having too few signatures than too many signatures, therefore, if their name is on the application then they might as well sign that line regardless.

From a post-closing aspect, a few extra signatures may be superfluous, but not detrimental (in regards to this specific box on this particular form...we're not talking about an RTC here, extra signature won't hurt).

Reply by BrendaTx on 5/4/07 12:57pm
Msg #188808

Re: One Would Think...

Dennis, When I began doing this business whenever I ran into a document I didn't know how to handle I have done it both ways, as long as I was able to make a duplicate to take with me.

The reason I started doing this is because I found that the signing service personnel often didn't have a clue and I didn't want to be left with title going all crazy on them or on me so I just started doing it both ways if there was a question. A stitch in time saves nine.

I know that many vet NSAs may say, "only sign where their name is" but the unfortunate thing about Texas is that there are around 30-40 pages of "junk docs" and often the title company just sends the forms and expects the notary to fill in the blanks correctly and get them signed correctly. During refi boom days it was quite common for title to let the notary fill in all the blanks and figure out pretty most all of it.

That left a lot for me to gamble on when I was getting my feet wet so I would go ahead and make a copy and get it done both ways.

Until you have a few signings behind you and know the difference between the legals, the lender docs and the title docs it is pretty overwhelming for Texans to figure it all out. I studied those documents a lot when I was beginning to find out which one told what story in case the borrower was looking for info.

Reply by Elizabeth Soliday on 5/4/07 12:40pm
Msg #188805

If their name is on it, they sign it. That's my policy.