Posted by Hugh Nations Signing Agents of Austin on 11/2/07 12:02am
Msg #219381

Conflict of interest

Today I was asked to handle a closing by a company that I have not worked for in a couple of years. Among the documents was a "Borrowers' Certification of Notary Duties."

In the document, the borrower attested that the notary had provided him copies, that the dates on the RTC were correct, and that the notary did not use the rescission period to persuade him to sign, nor did the notary express any personal opinions about the loan.

The instructions specified that if I did not get the document signed, it would negatively impact my fee. The notary was supposed to execute a jurat for the document.

I refused to notarize, on the grounds that the document resuled in me having an interest in the transaction, from several different aspects. Apparently, though the document has been in use for some time, no signing agent had ever raised that question.

Is there something I am missing or something that I have incorrectly read into the document that would have permitted me to notarize the certification?

Reply by MichiganAl on 11/2/07 1:38am
Msg #219386

Who creates these forms?

Can't be attorneys. Can't be anyone with the slight understanding of a notarization. Could a legal department have actually reviewed a form like this and okayed it? "Mr. Borrower, do you swear that I didn't give any personal opinions or persuaded you to sign? You do? Okay, let me put my unbiased, independent seal on this and we'll be all set." Some dummy is sitting in a cubicle trying to justify their existence. I don't care if it's a jurat, an acknowledgement, or a pinky swear. No way am I notarizing that.

Reply by MelissaCT on 11/2/07 8:46am
Msg #219400

I can see both sides of this one

but would tend to sway more toward the points Mike NY brought up. The contents of the document are not our concern -- unless the document is in effect having you notarize your own signature. In this case, it is the borrower attesting to a fact or set of facts and you are notarizing the signature. As long as the borrower is stating under oath that the information contained within the document is factual, there is no reason not to notarize. It doesn't matter if the document states that the notary acted independently or that the sky is blue. You are notarizing the signature.

Reply by Gerry_VT on 11/2/07 9:03am
Msg #219408

Re: I can see both sides of this one

I don't agree that the contents of the document are not the concern of the notary. The notary should not notarize documents when the topic of the document is something that the notary has an interest in. To take a more serious example than the issue of how the notary performed his/her duties, I would never notarize a deed for one of the neighbors who's property touches mine, because the deed describes the property lines, and those are my property lines too.

Reply by MelissaCT on 11/2/07 9:20am
Msg #219418

Re: I don't take it that far

in fact, I've notarized refi's for the neighbor on both sides of my house. Their property doesn't affect my interests in their loan, even though we share a property line. I don't understand the logic there -- the property is defined by the location (metes & bounds or feet). My neighbor's deed and legal description don't have my name listed on them, in fact it goes back at least 30 years to the owners of that time. Although, I guess there's nothing wrong with your logic. If I get a signing for someone I know, I always call them to confirm but to also let them know they can "opt out" of having me handling their personal information if they choose. So far, no one has done that, but I would respect it if they did. I don't know if I'm more comfortable having a stranger know my business or someone I know.

Reply by Gerry_VT on 11/2/07 9:51am
Msg #219428

More specific example

Let me give an example of why a notary shouldn't notarize a deed for a neighbor. Suppose the deed describes one of the lines as "...to an iron pipe, thence N 90 deg 0 min W 200 feet to a point...." But an earlier version of the deed said "...to an iron pipe, thence N 90 deg 0 min W 220 feet to a point...." So when the neighbor signs the deed, the neighbor in effect is making the notary's property 20 feet bigger. Thus the notary has an interest in the transaction.

Reply by Phillip/TX on 11/2/07 9:53am
Msg #219430

Re: More specific example

How would the notary know this difference??? Would they take their DOT or survey to the closing to compare???

Reply by Gerry_VT on 11/2/07 10:07am
Msg #219432

Re: More specific example

Phillip of Texas asks "How would the notary know this difference??? Would they take their DOT or survey to the closing to compare???"

The notary should just presume that whenever a neighbor signs a deed, that action will have some effect on the notary's property; maybe it will seem to give more land to the notary, maybe it will seem to take land from the notary, maybe it will confirm the status quo. In any case, the notary's land is affected, and so the notary should refuse to act. There won't be any need for the notary to take anything to the closing, because the notary won't be going to the closing.

Reply by MelissaCT on 11/2/07 1:43pm
Msg #219464

Re: But the Schedule A

would be pulled from city/town/county records, so absent a new survey to change the existing recorded property lines, a homeowner can't create their own Schedule A. I still don't follow this line of thought.

My Deed & Schedule A state 60 feet to the east bordered by my street, 120 feet on the south bordered by property now or once owned by so-and-so, 120 feet on the north by property now or once owned by so-and-so, and 60 feet on the west by property now or once owned by so-and-so. There is an easement listed as recorded on page such-and-such of book such-and-such to the property. That's it. Maybe different states/cities/towns/counties list differently, but mine is pretty cut-and-dry. The only way I would be able to get it changed in city records would be to have a survey conducted to re-establish the actual property lines and get it recorded at city hall. My neighbor refinancing their property has nothing to do with my property & I see no conflict of interest in doing the signing.

Reply by Gerry_VT on 11/2/07 2:32pm
Msg #219472

Re: But the Schedule A

I don't know how they do it in Connecticut, but the places I've seen (New York and Vemont) make only a very cursory examination of a deed that is being recorded. Is there an original signature? Have all the fees and taxes been paid? Is there a notary certificate that it was acknowledged? If it calls for a survey, does the survey plat accompany it, or if not, is the plat already on file.

Now way is the town clerk going to try to compare the plat to the legal description. No way is the town clerk going to try to figure out if the legal description is in harmony with the descriptions of the neighbors. No way is the town clerk going to try to figure out if the latest legal description agrees with the most recent description already on file.

As for getting it changed in city records, the city or town does not take any position on which, if any, of the dozens of legal descriptions for a given property is correct. That's up to a land surveyor to figure out (or if that doesn't work, a judge and jury).

Reply by Gerry_VT on 11/2/07 3:01pm
Msg #219478

Connecticut

In a previous message I said that I didn't know about Connecticut. When I wrote that, I wasn't thinking of all the fun my brother and I had this spring trying to find the marker pipes for his Connecticut house. I'm not a land surveyor, but I don't need to be to tell you there is nothing cut and dried about Connecticut land boundaries.

Reply by Phillip/TX on 11/2/07 2:40pm
Msg #219474

In full agreement Melissa

Just because my neighbor's DOT says that the meets and bounds are this... does not make it so... that is for a survey to prove, and if replating is required the city/county/state will then be involved.

So me notarizing my neighbors DOT is in no way a conflict of interest... because without my DOT and the DOT on the other sides of this DOT not all matching... does still yet not make a legal assumption that they own land that is mine or someone elses or they own my land.

Reply by Gerry_VT on 11/2/07 2:44pm
Msg #219476

Re: In full agreement Melissa

If there's uncertainty about the boundary, someone will call a surveyor. The surveyor will get copies of all the deeds and plats, and make field measurements. He'll then form an opinion about the most likely location of the boundary. The deed signed by one neighbor and notarized by another would be one of the pieces of evidence the surveyor would use, hence the conflict of interest.

Reply by Linda_H/FL on 11/2/07 9:15am
Msg #219413

Re: I'm confused...

How can you notarize a document about yourself? Regardless of who signed it, if the subject matter of the document is the notary, how can the notary notarize that document? Sorry, I just don't see how this is correct. MHO

Reply by MelissaCT on 11/2/07 9:28am
Msg #219421

Re: I'm confused...

If the document states that the notary has brown hair & brown eyes, would you be able to notarize the signature of the borrower who attests to that fact?

This is an interesting thread. Are the contents of the document strictly of no consequence to the notary, or do the document's contents play a part in determining whether a notarization can occur? The notary is typically primarily concerned with the notary block and if the document contains blanks. As long as the signer appears before the notary and is willing to sign (or acknowledges that they have signed of their own free will), or affirms under oath to the truthfulness of the contents of the document, is that not a legal request for notarization?

I understand that the contents play a role IF it is a vital record or something specifically prohibited from being notarized by a notary through state statute (such as birth or death certificates). I would also state that if the document is such that a notary is, in effect, notarizing their own signature, then it could not be notarized.

Reply by Linda_H/FL on 11/2/07 9:34am
Msg #219424

Re: Isn't a notary supposed to be impartial?

If the document is ABOUT the notary there's no way he/she can be impartial - the notary has an interest in the impact/consequences of the document as it's a statement ABOUT them...

Again...MHO - simply put, some will think it's okay - I'm not comfortable with it and I wouldn't notarize any document about myself.

Reply by MikeC/NY on 11/2/07 8:26am
Msg #219397

I don't see how that particular form itself would give you an interest in the outcome of the transaction - they're being asked to affirm things that were supposed to have happened during the closing. If you know those actions were required, where's the conflict in having them swear to the fact that you did them?

As far as threatening to reduce your fee for not getting it signed, I don't see that as creating a conflict either. They're saying that if you don't provide proof that you did what you were supposed to do, they will reduce your fee. It's tacky and insulting, but I don't see how it gives you an interest in the outcome of the transaction.

Reply by MichiganAl on 11/2/07 10:29am
Msg #219435

I don't know what you and Melissa are thinking

You guys don't see that we have an interest in that form? What if the borrower refuses to sign because they feel I did give them advice or persuaded them to sign? The company that hired me probably won't hire me again. I've just involved myself in UPL, so I could lose my commission. I have a major interest in that form and I have a reason to persuade the borrower to sign that form. Guys, being an independent party to a transaction is notary 101. It's one of the basics of being a notary. I'm frightened that this is even a conversation.

This is absolutely clear cut. If you have an interest in a document, you can't notarize it.

Reply by Linda_H/FL on 11/2/07 10:48am
Msg #219442

Re: Thank you Al - you said it better than I could.. n/m

Reply by MelissaCT on 11/2/07 2:10pm
Msg #219467

Does this differ from

a document that the borrower signs which states that if they cancel the loan, they (the borrower) are responsible for paying the notary directly -- which is then notarized. Just out of curiosity I'm wondering if that would be ok to be notarized.

Or a document that states "I, notary, have seen the ID as recorded on this form by me and certify that I've recorded it correctly. -- borrower signature -- notary signature" and requires notarization. ---I have refused to notarize this form as written, however, CaliNotary of CA responded to my message # 202107: "Do they have an acknowledgment or a jurat on the form? If it's an ack, I don't see why you can't notarize it, all you're attesting to is that the so and so is the one who signed the form, it doesn't matter what's actually on the form that they've signed."

Just curious if it makes a difference here, why not there?

Reply by Phillip/TX on 11/2/07 2:28pm
Msg #219469

Re: Does this differ from

According to Al and Gerry it would matter... and you could not notarize it, as you have an interest in it.

Reply by MichiganAl on 11/2/07 2:44pm
Msg #219475

Re: Does this differ from

I've never had that form that says the borrower is responsible for paying the notary. If I did and I was then supposed to notarize, I wouldn't do that either. No way.

The I.D. form, I've never seen one worded the way you're stating above. That's an interesting wording and probably less clear cut. But in general I don't have a problem with the I.D. form being notarized. I'd think that even if it's a jurat, the borrower is just signing to say that the info written above is correct, not that they swear that I identified them. So he's not signing to say I did or didn't do my job. You're notarizing his signature, his signature is to attest that the info is correct. Even in the above wording, it doesn't say "I the borrower swear that the notary identified me."

Reply by Linda_H/FL on 11/2/07 5:53pm
Msg #219512

Re: I've had one signing pkg that included the

form where the borrower assumes the responsibility for paying the notary, and it didn't need to be notarized If it required notarization, I wouldn't notarize it. As for the ID, I'm either signing off that I examined the original identification and obtained the above information or, as stated, the borrowers are stating that the information is accurate and I'm notarizing their signatures.

Reply by MikeC/NY on 11/2/07 4:49pm
Msg #219504

Re: I don't know what you and Melissa are thinking

<<You guys don't see that we have an interest in that form? What if the borrower refuses to sign because they feel I did give them advice or persuaded them to sign? The company that hired me probably won't hire me again. I've just involved myself in UPL, so I could lose my commission. >>

No, I don't see that we have any beneficial interest in that form; I think you're splitting hairs too finely. The document simply asks them to affirm that some actions were taken by the notary; you either did those things or you didn't. It doesn't make you a party to the transaction, because there is no transaction involved - it's a statement of fact.

If you haven't given them advice or pressured them to sign (IOW, are doing the job properly), what's the issue? If you HAVE done either of those things - well, you're probably in the wrong line of work... If the borrower refuses to sign the form for whatever reason, how does that amount to an accusation of UPL on your part? They don't need a form to accuse you of UPL, all they have to do is call the LO or the TC or whoever and complain about the way you acted.

Reply by BrendaTx on 11/3/07 6:06pm
Msg #219594

Mike, I respectfully disagree with you on this. I've read all the debate here so I came back up to your first post in this thread to check and make sure I understood what you were saying.

The conflict is that the notary has it in black and white that if they don't get a certain document signed then they are damaged financially. There's the conflict. The problem isn't the document being notarized as much as the ridiculous circumstance the notary has been put in by an idiot set of instructions which put the notary in a situation that's wrong.

There's a difference between saying "do your job right or we will reduce your fee" (the tacky and insulting thing we usually encounter) and "if you don't get that particular document signed by the borrower we will reduce your fee"; and, if I am reading Hugh's post correctly the latter is the position he was put in. So, I believe that Hugh's decision on this one was the correct one.

This is another one of those "less is more" situations where the instructions to get that particular document signed or else the fee is reduced went over the line, if I am understanding this correctly.

I can agree that we aren't the police to review the contents of the documents but at some point we have to become responsible in our positions as notaries who take the "impartial" witnessing part seriously. The people who are ginning up these documents are the ones who need to go back to school on their business. (Rule 1 - don't make up documents which have legal import unless you're a lawyer.)

I hope I have said this clearly.

Reply by Phillip/TX on 11/2/07 9:31am
Msg #219423

First off, are not attesting to the document, but to the signature of the person... so what difference does it make what the document says????

Reply by Gerry_VT on 11/2/07 9:54am
Msg #219431

The only reason the notary is considered reliable is because he/she has no stake in the transaction. If the notary has a stake in the transaction, the notary can't be relied upon.

Reply by MichiganAl on 11/2/07 10:39am
Msg #219439

Are you kidding me?

If a document says, "If I miss a payment, my property immediately transfers to Phllip in Texas," you think you can notarize that and it would be hunky-dory? Please, everyone go back to page one of your handbooks.

Reply by MikeC/NY on 11/3/07 12:17am
Msg #219546

Re: Are you kidding me?

<< If a document says, "If I miss a payment, my property immediately transfers to Phllip in Texas," you think you can notarize that and it would be hunky-dory? Please, everyone go back to page one of your handbooks.>>

It's not up to the notary to determine whether or not the document makes sense - our function is to verify identity and be reasonably sure that the signer is competent, understands what he or she is signing, and is not signing against their will.

So if the document says "If I miss a payment, my property immediately transfers to Phillip in Texas", and the signer meets all of those tests... yeah, I can notarize it and everything would be absolutely hunky-dory. It might be a stupid decision on their part, but that's not my problem. My concern as a notary is not about WHAT they're signing, it's about whether or not they are capable of signing.

I think that might be on page two or three in your handbook...

Reply by MichiganAl on 11/3/07 3:45am
Msg #219549

Ok, let's try this - From the NYS Manual:

Notary public—disqualifications.
...PERSON MAY BE DISQUALIFIED TO ACT IN CERTAIN CASES BY REASON OF HAVING AN INTEREST IN THE CASE. To state the rule broadly: if the notary IS A PARTY TO or directly and pecuniarily interested in the transaction, the person is NOT CAPABLE OF ACTING IN THAT CASE...In New York the courts have held an acknowledgment taken by a person financially OR beneficially interested in a party to conveyance OR INSTRUMENT OF WHICH IT IS A PART OF TO BE NULLITY; and that the acknowledgment of an assignment of a mortgage before one of the assignees is a nullity; and that an acknowledgment by one of the incorporators of the other incorporators who signed a certificate was of no legal effect.

So you'd notarize a doc saying the property goes to you if the borrower misses a payment? Really? You wanna stick by that despite what your NYS manual says? PERSON MAY BE DISQUALIFIED TO ACT BY REASON OF HAVING AN INTEREST. Again, this is day one notary 101 stuff.

Reply by MikeC/NY on 11/3/07 8:37am
Msg #219556

Please go back and read what I wrote

<< So you'd notarize a doc saying the property goes to you if the borrower misses a payment? Really? Again, this is day one notary 101 stuff. >>

I never said I would do that. Please don't twist or change my words to try to make your argument.

Reply by MichiganAl on 11/3/07 1:32pm
Msg #219577

Huh? You didn't say that? Here's your post:

"So if the document says 'If I miss a payment, my property immediately transfers to Phillip in Texas (Phillip in Texas is also the notary. Maybe that's what you're not getting?. The post was originally directed to him, so he'd be notarizing a doc that says the property transfers to him.)', and the signer meets all of those tests... YEAH, I CAN NOTARIZE IT and everything would be absolutely hunky-dory (But now you're saying you didn't say that). My concern as a notary is not about WHAT they're signing (which your NYS handbook clearly says is NOT true if you have an interest)."

I haven't twisted anything. And I give up.

Reply by MikeC/NY on 11/3/07 1:50pm
Msg #219578

Again, I didn't say what you're accusing me of saying

Read it again. I never said I would notarize it if the property was transferring to me, nor was I claiming to be Phillip in Texas, nor was I suggesting that Phillip would do it. You're purposely trying to make it sound like something altogether different from what it means (using really convoluted logic to do so).

Reply by Rose/CA on 11/2/07 10:20am
Msg #219434

Since the borrower is attesting to the fact that the notary "did not express any personal opinions about the loan" it would probably be ok to sign, but since the notary is expected to be an impartial witness anyway to any of the docs signed, sounds like a bad precedent. Where will it end? Will notaries next be asked to supply subscribing witnesses to their own signatures?

Reply by OR on 11/2/07 12:22pm
Msg #219451

Re: Conflict of interest-- I agree--wouldnt touch it. n/m

Reply by Bob_Chicago on 11/2/07 4:10pm
Msg #219498

For good reason, a NP may not notarize a doc, if the NP....

receives a benefit if the doc is signed and notarized.
Think of notarizing a will leaving a bequest to the NP or a
deed conveying property to the NP.
Here, the NP will get less, or no, payment if the doc is not
signed and notarized. CLEARLY the NP can NOT notarize this doc.
Even if it is legal in your state, it is still improper.

Reply by Lee/AR on 11/2/07 5:07pm
Msg #219506

Reading between the lines...

It appears that some B must have 'put words in a Notary's mouth', so SS/Lender/TC. is put in a 'he said/she said' position. And, of course, we all know who loses that type of thing. So, maybe it's not a bad idea. The question becomes: How do you get something 'from the b's pen' that s/he can't 'disremember' later when it becomes beneficial to do so?
Hugh, you started this--and you are an attorney (yes, retired, but). Tell us--what would you like to see done to prevent the problem that this objectionable form is trying to cover?

Reply by Linda_H/FL on 11/2/07 6:06pm
Msg #219513

Re: My .02 FWIW

If they really want this form signed and notarized, to avoid the hint of impropriety, the signing agent can leave the form with the borrower with a stamped, self-addressed envelope and instruct him that the lender has requested he complete it, have it notarized (by another notary) and return it in the envelope provided - lender/title now gets their information and their form completed as they want and the SA is taken out of the mix. MHO

Reply by Hugh Nations Signing Agents of Austin on 11/2/07 6:10pm
Msg #219516

Re: Reading between the lines...

Lee/AR asks:

***Hugh, you started this--and you are an attorney (yes, retired, but). Tell us--what would you like to see done to prevent the problem that this objectionable form is trying to cover?***

Notarization adds nothing to the form. If the SS thinks it necessary, why not just have the borrower sign it, and forget about notarization? That's what I wound up doing.

Reply by MelissaCT on 11/2/07 7:01pm
Msg #219525

Re: This thread -- there can be a useful discussion here

without anyone getting upset or name calling or whatnot. This thread is a great example of this community brainstorming & exploring different aspects of an issue intelligently. Thank you!!

Reply by MikeC/NY on 11/2/07 7:10pm
Msg #219526

Were the instructions that you just get the doc signed...

.. or did they require a notarization also?

If all they want is a signature, I would say just get it signed and ship it. I still stand by my earlier posts that it's not a conflict of interest to notarize, but if they're not demanding that you do so it shouldn't be a problem.

Reply by JK/TX on 11/2/07 9:11pm
Msg #219539

Re: Conflict of Interest..... Good Thread

IMO

I'm w/the ones that think it s/not be notarized by the SA. I also think that the borrower's sig being notarized by the SA could render this document useless in a court of law (if it was prep'd for that purpose. ) But, hey, I'm not an attorney and many times the Judges are not either.... I think this doc would be more valuable w/out the SA's signature.

Gerry, I also see your point and have seen your point, not involving a notary being a neighbor that notarized, etc, but I have seen conflicts with the boundaries in the chain of title,,,sure didn't make for good neighbors.... Ohhh, what mess! And if the notary HAD been a neighbor ..?...Makes Ya Wanna Go.. BUUURRRR ~ !

Reply by Stamper_WI on 11/2/07 10:29pm
Msg #219543

Hugh

Did you get it in writing that your fee would be impacted if you did not notarize this? Simplistically put , if your notarize it, you get your full fee. If you don't, your fee is reduced. I call that an interest. It also make you a party to the transaction. You profit from the act. Like notarizing your own deed.