Posted by Vince/KS on 11/29/07 10:47pm
Msg #223685

Cipa proposal and more - long

This is concerning the proposal and ideas expressed by Diane Cipa or in comments made by others concerning this topic. It looks like Diane may be trying to steer this ship on her own in her own direction. But we need to reflect on the actuality of what is and has historically taken place as many alternatives exist and nearly all are currently working - although some fine tuning occasionally may be needed. The proposal as presented seems to focus on only one part of this process and with what some believe could be a dangerous zeal. Instead, we need to consider that there are various ways that the “NSA” fits into the home mortgage industry.

This process may be explained (over simplification) as follows: a borrower decides they need to finance or refinance a home loan. They would typically be talking with either a bank or a broker about the need for this. So, we start simply by defining the major decision makers. The banks and or broker works out what MAY be the best deal that the BORROWER PERCEIVES is available to him/her (the cost based upon what the bank has estimated the total expense of the loan to be). Once the borrower decides they have the loan and lender they want, they then give a nod to proceed. They do not normally say, “I want _________ ” as a title company, nor do they say they want a particular person to close the loan.

One of the two decision makers instead influence the remainder of the process. Both the bank hiring the title company and the broker want the job to be done correctly (most even if it means losing the loan if it is not done correctly). A person in the position of trust determines how the next part of the process proceeds. Typically, that person works at a title company that likely has the most to lose if the actual signing is not done correctly. If the title company representative or bank loan officer has a good relationship with the broker, they will likely be interested in the brokers opinion. But, because they have much to lose, they go with persons they can trust to do the job right or whom to blame if the job was not done correctly (broker or not). Some of the title companies apparently have less interest in this “position of trust” as they are hiring the remaining persons in this process on a bid basis. The ones actually performing these signing jobs on a absolute low bid basis tend to churn back out of the business as low prices cannot be sustained forever and those same prices may leave a lot of persons holding a very empty bag of fluff and receipts payable. Further digressing, if enough trust exists or enough financial incentive may be held out to the borrower, a TC may be able to get a poa signed and proceed with a small dollar cost closing that they feel will be done right. If the borrower is not as trusting, or if the company has been accused of serving its own needs first too often with the poa, they may be searching for outside service at a reasonable cost.

Notaries Public that do a good job for the borrowers and the title companies day in and day out are hard to find. If the TC has enough presence in an area, they may have in-house people to do the job. However, independent contractors have an awfully strong attraction (no ongoing salaries during slack periods, benefits, workers comp, etc). The independent contractor is especially important if the TC is physically not located in a given area and they need someone they may trust to do the job well. If a persons presenting the documents for signature is breaking any common sense rules, the TC is going to hear about it. If they are not doing the job correctly, they will not be hired by the bank again or may be facing appropriate legal action.

So, if the title company and/or broker has a trusting relationship with a person that may assist with the borrower’s execution of the documents, they are likely to use them. If they trust a signing company to carefully screen personnel, they may use them - especially if they have been satisfied with the value of the services provided. If they are primarily concerned in obtaining the lowest possible cost for the service, they may infrequently get more than they are paying for - if they are lucky in the draw.

It is great Diane’s company has found enough title companies and other decision makers to keep her hopefully well trained staff so busy and that she is able to provide all of the things she has said that she provides for them (the cars and other benefits). But, that is only one model that works in that location. Some of the TC’s may find a Notary working on his/her own that will charge less for quality work and make the TC more competitive in the process. If not, they may go to a signing service that they have had the good fortune to trust. The newbie notary that charges $50 in that area may be doing it for fun, may have an employer covering his/her expenses or may be simply be trying to break into the business and eventually will compete with you head on. However, most of these new persons will fail miserably and fall by the wayside as will the SS that does not carefully screen them.

The failure rate among “newbies” is high because they will realize that the money they thought they could make is not there for them (regardless of how they believed it possible), or that they made a frequent costly mistake (resulting in no one is willing to take them on anymore), or a multitude of other reasons. The majority of the TC’s doing business are more concerned in trust. Many of the companies will pay more than the obscenely low fees that many of the “newbies” are willing to accept, even to pay mileage and other expenses to several out of the way places (where some local notaries public charge less) because of TRUST.

This is a people business. Most of the good ones will survive irregardless. Adding additional regulations will likely create more expense to the borrower. Based upon observations of most highly regulated areas, new burdensome regulations may lead to the “not so good ones” benefiting more from new regulations - as the standards typically required within them tend to be flexible enough to allow it. The local building inspector said it this way when referring to poor workmanship , “You would think by the way that these contractors complain that we want excellent workmanship when we are simply enforcing minimum code.”

Reply by Pat/IL on 11/30/07 12:09am
Msg #223695

Vince,

I can't argue with your facts, and you said it well. Long, but well. However, you seem to be suggesting that no change is best and let the chips fall into place. That's already happening. And the inexperienced who are exiting are easily replaced with more of the same. Raising the standards might just curtail the saturation, with only serious candidates entering the biz.

I don't think licensing is the solution. I think there is a better way.

By the way, Diane is a title agent - not a signing service, as your third from last paragraph seems to suggest.

Reply by Glenn Strickler on 11/30/07 1:34am
Msg #223707

I really wasn't going to comment on this issue as I am going to retire completely in the not to distant future and I thought it would be for the "youngsters" in the business to hash it out, but I do have a comment or two to make.

licensing does not raise any bar .. it only proves the person licensed can pass a test and pay a fee, something that is already done by the many certification tests out there. licensing only makes way for more government regulation. And when has the government been efficient at doing anything lately? In some states, there is already a lot of hoops to jump through to get a commission. And lastly, do we really need another fee to pay?

The industry is already raising the bar by screening the notaries it hires and the ones that aren't performing are beginning to drop off the map. True, some companies are hiring "cheap" notaries, but many more are asking a few questions before they hire the notary and if they don't get the right answers, they move on until they do. This has to be fact, as I am not cheap, I am not even home a lot lately and my phone still rings with offers of work for my full fee.

Reply by MichiganAl on 11/30/07 9:22am
Msg #223730

Certification tests aren't required, and they're sketchy at best. We've seen the questions asked by thousands of people over the years who have passed the NNA exam. Somebody can basically wake up one day and decide they're an NSA. We know it's true, we see it here all the time. Heck, the shoe shine boy at Detroit Metro Airport is a notary. Not kidding. Fly in for a two hour layover, get your wing tips buffed, sign your mortgage docs. If a realtor could do that, just wake up and hang an open for business sign, wouldn't the industry bar be lowered significantly? It would be in my estimation. If insurance agents, appraisers, and dare I say attorneys (I know, I'm not saying we're anything like attorneys, just trying to illustrate the point) weren't required to be licensed, pass stringent exams, have background checks, continuing ed, etc, there would be a bunch of fools running around (kind of like what we sometimes see with NSAs, no?). I would also say that consumer confidence is an issue. I've had more and more borrowers ask me about my background, how I'm qualified to handle their sensitive information. I think it's a valid concern on their part, and I think licensing is a way to address that as well.

Anyway, just my thoughts. I always respect your opinion Glenn. Sad to see that you're getting out.

Reply by Glenn Strickler on 11/30/07 1:19pm
Msg #223801

Thanks, Al. I am not really getting out anytime soon, just changing gears. When the phone rings, I'll take the job, and I will keep my ad up here and a few other places, and keep up on the changing industry and new laws. I am just not running around marketing myself right now. Some other things have caught my attention and since life is short, I don't wait to do something different if I can.

Also, I guess the opinion changes depending on the state we do business in. In Calif, we have to take a course and pass a test and a BGC each time we renew our commission. I understand that requirement differs from state to state and some type of consistent standards may be necessary.
But because of my experience with government regulation in other areas, I don't trust the government to get the job done.

Each time I want to do something different here, it seem like I have to have the proper license from the city, county or state, pass some kind of test and subject myself to some other type of government regulation and testing. And still incompetant people exist in these heavily regulated service industries and there is a demand for people to do things right no matter what the service.

Reply by janCA on 11/30/07 9:49am
Msg #223733

Glenn, I couldn't agree with you more. I don't think licensing is the answer. Certification to a certain degree does say that you at least have a minimal knowledge of the loan docs, it just depends on "which" certification you have. Too many out there as far as I'm concerned. I'm finding that I don't agree with some of the "best answers" and therefore it behooves me to trust where the certification is coming from.

Someone said it so eloquently in one of the recent threads "If the industry would stop hiring these idiots" they are sending out to do these signings. And the way they can do that is to screen them beforehand, before they are put into a database. And you are starting to see this as some companies are setting up appts. with the NSA, sending them a set of loan docs, via e-mail and having the NSA go through these docs as if they were sitting in front of the borrowers. One such title company stopped me after about the fourth document and stated, " we don't have to go any further, you are not a point and sign SA and you know these docs, you just wouldn't believe who is out there conducting these signings". And of course, I stated back, "yes, I would".

We have a very limited role in the whole loan process, but an important role. Licensing is not going to change that.

Business is still down and will continue to be for awhile but I have not waivered on my fee one bit. I get the repeat business from clients I've had for years but they are stating it's just very slow right now. I can weather through this downturn, it's just lighting a fire under me to do more marketing, venture into other areas that I would not have before and my husband loves that I'm cooking again. Ha!

Reply by Lee/AR on 11/30/07 11:03am
Msg #223756

Jan...this makes much more sense than another

layer or 2 of certification/licensing or stipulations or government. The folks that hire us also see all the mistakes made. Doubt that it would take more than 15 minutes to compile a list of the most frequent &/or most troublesome. A short interview via phone prior to putting someone in a database most assuredly could sort the good from the bad. Doesn't have to be repeatedly annually either. We don't suddenly become stupid. I think a common sense approach will yield better results than more hoops to jump through.