Posted by SD/CA on 11/14/07 10:57am
Msg #221148

Loan Officers

I had a signing last night that was about 15 miles away where I had to print edocs, 2 copies. When the borrowers saw the docs they said "NO THANKS". The amount of the payments were about $300.00 more that they were told and the loan terms were not even close to what the loan officer had stated.
They called the OL and he tried to tell them that the increase was because they had included tax and insurance and that the loan was fixed rate loan. But when I looked at the deed the loan was an adjustable rate loan and the taxes and insurance were not included. He told me that all deeds show this as another way to pay the loan.
The borrowers looked at the first payment coupon and they reflected the higher payments and no taxes or insurance payment were included. The schedule of payments showed the higher payments and the large increase after the adjustable rate period.
I have been on other singings where this has been common practice by loan officers. Some have signed and others have not. I can only say so much when I'm on a signing, i.e, I can only show the borrowers the documents and I can not and do not express an opinion about the loan terms. How many times have you had to stop short and not say anything when you know that these are loan offficers trying to close a loan that was not as quoted? This is unfair to the borrowers and wastes time and money. What can we do?

Reply by Charles_Ca on 11/14/07 11:04am
Msg #221150

Was this for SOX Alan? n/m

Reply by Lee/AR on 11/14/07 11:06am
Msg #221154

Just point out the 'black & white' in the docs. And hope they've got common sense. Sounds like your Bo's did. Also, ask the B's to write a 'why I am not signing this loan' statement to prevent the LO from playing the 'blame the notary' game. Never had a B who wasn't eager to comply.

Reply by BetsyMI on 11/14/07 11:13am
Msg #221160

I get tired of this too. I aim to close the loan, but it's out of my control if it's not what the Bwr was expecting. Tell them the truth ahead of time so they know what's coming in the paperwork, and we'd be closing 100% of the loans we are assigned to close.

Many of you say you hope the borrower has 'common sense', but I don't want to drive an hour each way and spend 30-40 minutes at the table only to find they don't want to sign after all. If they knew what they were getting beforehand, there would be no waste of time.

I think the LO's figure we'll talk the Bwr into it or that the Bwr will sign because we've made the trip. But that doesn't always happen. The LO is sitting home having dinner with his or her family while I'm driving around in the dark, and if the papers have to be redrawn for the next day it doesn't matter to them. They'll get their commission no matter what, but we'll be begging to get a trip and a print fee if it's a no sign the first time around.

Reply by Carolyn Bodley on 11/14/07 11:18am
Msg #221163

I've had a LO tell the BOs to hand me the phone -- his comment was "MAKE THEM UNDERSTAND !!"

Reply by SD/CA on 11/14/07 11:31am
Msg #221164

This was not through SOX. I thank you for your comments. I think there needs to more oversite of the loan industry. Many people are loosing their homes because of this type of action by LO's.

Reply by Rachel/ORWA on 11/14/07 12:11pm
Msg #221167

I sympathize with borrowers who have lost their homes, but the vast majority are not due to any action by LOs, shady or otherwise. Many, many people gambled that the housing market would keep rocketing skywards and the house they couldn't afford would be re-financable before their rate adjusted. Many lost the bet and are now suffering as a result.

Usually, if believes an outright lie, it's because they don't want to see the truth, even when it's spelled out in black and white, right in front of them.

Reply by Rachel/ORWA on 11/14/07 12:30pm
Msg #221172

s/b "if somone believes..." n/m

Reply by Leon_CO on 11/14/07 12:38pm
Msg #221173

Rachel, I agree

>> I sympathize with borrowers who have lost their homes, but the vast majority are not due to any action by LOs, shady or otherwise. <<

Rachel, I agree. I just finished writing an article on this very topic. It's worded a lot differently, but it has pretty much the same message as what you posted.

Reply by CF on 11/14/07 12:16pm
Msg #221169

Some time ago when prepayment penalities and adjustable rates were all the go....I would flip through edocs before printing and when I called the borrower to confirm....I would go over the Note with them and the TIL.....I would just say total loan amout, interest rate, monthly payment, prepayment penality. I saved myself some time and money....I would instruct them to call their LO and get it cleared up....as I have no authority to do anything once at the table. Today....I would still call even if I had printed everything off....I would rather "eat" some print fees....then be fighting for a trip fee. (which is wrong....I should get paid either way) Going over the Note and TIL is not UPL- that is in black and white....so you may be albe to head off trouble. But most the time the LO will talk them into it. However....I want to be conpensated for my work and that does not include a mess at the signing table! I dont make enough money to call the TC, call the LO and wait and have BO asking me questions that I can not legally answer....I dont make enough to "sell" what a LO was suppose to in the first place for loads of orgination fees and $$$$$ right into their pocket!

Reply by CaliNotary on 11/14/07 1:53pm
Msg #221186

"Many people are loosing their homes because of this type of action by LO's."

That's why it's our responsibility to make sure they understand what it is they're signing.

In the situation you had, I would have no problem telling the borrower that what the LO was telling them over the phone was not what the docs stated, that impounds are always separate from the loan and that it was definitely an adjustable loan. Once I've given them the info to make an informed decision my part is done, if they want to sign and still believe the LO over the docs, more power to them. You can't protect some people from their own stupidity no matter how hard you try.