Posted by cathie/FL on 4/24/08 5:49pm
Msg #244896

closing script

NNA has just posted a concern that the new RESPA requirements (closing script) might constitute UPL, and that this may phase signing agents out of loan closings.

Reply by AZ Signings on 4/24/08 5:57pm
Msg #244898

Is this an isolated issue for just FL or all of USA? When is this to come in to affect?

Reply by cathie/FL on 4/24/08 6:16pm
Msg #244901

It is for all of the USA. As to when it comes into effect, I can't answer. At this time it is just 'proposed'. If you go to the HUD homepage, it will have more on it.

Reply by Leon_CO on 4/24/08 6:19pm
Msg #244902

I don't see this as a threat to notary signing agents.

We don't know what this "Closing Script" is going to say, or how it will be worded. But I don't see it as UPL.

This is an excerpt of what I read:

-------------------------------------------------------------
The proposal requires the person who is presiding over a signing appointment — as part of the closing process — to read aloud a prepared script to the borrower and explain it if the person has questions.

HUD is proposing the closing script as a way to more thoroughly inform borrowers of the terms of their loans and explain settlement services costs.

Notaries, however, are prohibited by law from explaining the terms and conditions found in closing documents.
--------------------------------------------------------------------

If a notary signing agent reads aloud a ** prepared script **, how is that UPL? The notary is not the one who writes the script. We're merely reading aloud what someone else wrote. If the borrower doesn't understand their loan terms, we do what we've always done: "Call your loan officer." That is the person who has always born the responsibility of explaining the loan terms. And it will remain that way.

This is not the end of remote closings. I don't see how our roles will be any different than what they have always been. We can only tell the borrowers what we know. Most of it is outlined in the documents anyway.

Also, this may not be the case in all states, but according to the Colorado Notary Law Primer, under the section: >> Unauthorized Practice of Law << it states:

** Exceptions. Nonattorney Notaries who are specially trained, certified, or licensed in a particular field such as real estate, insurance, and escrow may advise others about documents in that field, but in no other. ...**

Reply by TRG_wy on 4/24/08 6:30pm
Msg #244906

I am in total agreement with Leon here.

If the "proposed" RESPA revisions in any way would so drastically reduce a lender's ability to continue offering remote closings they would be the first ones to jump in mass against this proposal. They stand to lose a lot more than we do in the closing process.

I also fail to see the "UPL" aspect that the NNA sites.

Reply by BrendaTx on 4/24/08 6:35pm
Msg #244908

Does anyone have a link or full text on this?

It's hard to figure what's conjecture and what was stated...what's being interpreted and what the "Great Beast" really said in their article.

Reply by PAW on 4/24/08 7:17pm
Msg #244913

It doesn't make any difference what the script says.

As Leon pointed out, we are reading, word for word, exactly what is prepared by someone else. It would be the same as reading, verbatim, the Note or Mortgage. If there is a question that requires 'explaining' any specifics within the script, "call your loan officer" is the answer. I too do not see where UPL enters the equation with a prepared script.

I would also hope that a copy of the script is provided to the borrowers/homeowners as well as some sort of acknowledgment by the borrowers/homeowners that the script was read to them and that they received a copy of that script.

Reply by BrendaTx on 4/24/08 7:23pm
Msg #244914

I don't care what the script says, I am asking what the

NNA article says.

Reply by PAW on 4/24/08 7:31pm
Msg #244916

Re: I don't care what the script says, I am asking what the

Oh, I thought you were asking what the script says. Sorry, I read your post incorrectly.

Reply by BrendaTx on 4/24/08 7:44pm
Msg #244922

Thanks Paul, no...I'm just looking to see how this informa-

tion was conveyed by the NNA. It surprises me to hear they took that stance, if I am understanding correctly.

Reply by Bob_Chicago on 4/25/08 12:36am
Msg #244953

Here 'tis

http://www.nationalnotary.org/nsaSection/index.cfm?story=1386&referID=A35329&wt.mc_id=902

It is late and had a busy day
Have not studied it, but on first glance, I do not find a UPL problem
but do see it as a major PITA

Reply by Sherri_IN on 4/25/08 6:15am
Msg #244965

ALTA's Position

here is a link to ALTA's position on RESPA reform.

http://www.alta.org/advocacy/news.cfm?newsID=6273

Reply by MikeC/NY on 4/24/08 9:06pm
Msg #244931

Check your PM n/m

Reply by Tess on 4/24/08 7:29pm
Msg #244915

Re: It doesn't make any difference what the script says.

The only problem I see is if the borrower is unable to reach anyone to explain it to them, and sign anyway. Do they then have a way out of the loan later??

Reply by PAW on 4/24/08 7:31pm
Msg #244917

Re: It doesn't make any difference what the script says.

The proposed changes doesn't change the right to rescission, if there is one.

Reply by Tess on 4/24/08 7:36pm
Msg #244920

Re: But what about after the right to rescission ends?

I see a problem for the LO and TC if they are not reachable!

Reply by NJ_Notary on 4/25/08 5:38pm
Msg #245061

Re: It doesn't make any difference what the script says.

I would compare the script somewhatly to the "opinion 26" in NJ. I would alsohope a copy of the script is provided to the borrower/homeowner/buyer as well as an acknowledgement of such. Have a great weekend Paw!

God bless.

Reply by Lee/AR on 4/24/08 6:56pm
Msg #244911

Had one recently.

Just stuck in the back of the package. No 'instructions' to read it; B's didn't have to sign it.
Started out with.... My name is _______ and I'm here on behalf of (Lender) to explain... goes on to say if you still have questions, we can call your LO.
The following explanations of docs are pretty good. But that first sentence.... ooooeeeeee!

Reply by Pat/IL on 4/24/08 7:34pm
Msg #244919

Re: ALTA has expressed concern, too

Ed Miller, Chief Council for the ALTA, related concerns along these lines recently at its Small agents and Abstractors Forum. I cannot quote anybody directly, as I am a lousy note-taker. I can only offer what my memory (about as good as my note-taking) will allow:

In a conversation with HUD representatives, the ALTA representatives expressed concern that any non-lawyer reading the closing script might be considered to be UPL in many states. The answer from one of the HUD representatives amounted to something like: "So?"

It also seems that HUD expects the script to add considerable time to the signing process. I am only on page 14 of the propoosed reform rules (around 96 in all). Not that it's not a good read, but...anyway, lots of unhappiness about the closing script. Hey, did you hear also that they plan to simplify the 1-page GFE into a 4-page simpler document? Leave it to HUD, who couldn't even pull off simplicity with that joint- credit section on the 1003.

Reply by jba/fl on 4/24/08 7:43pm
Msg #244921

Re: Had one recently.

I also see these, but why, oh why, do they put it in the bottom of the pkg? that should be on top. When I see it I can't help but laughing to bor: well, I guess we should have started from the back and worked our way forward. Then we all laugh.

There is no KISS when the govt. is involved, until kiss-off time anyway.

Reply by MichiganAl on 4/24/08 7:33pm
Msg #244918

The sky is falling!! Not. n/m

Reply by MW/VA on 4/24/08 8:37pm
Msg #244929

NNA does a great job of getting attention! They always use "hot button" words. This one said "threatens". Has the new RESPA regulation gone into effect. The last I knew it was drawing input from all areas of the industry. Many of us use a "script" at a signing, just a one-liner about what the doc is. UPL is ADVISING the borrower. I always tell them I can't offer legal or financial advise, and if there are any questions they need to call the LO. I'm sure RESPA is trying to standardize the way this is done. It would kind of backfire, if NSA's are out of business, so would the NNA be if it lost a large majority of members, right?

Reply by BrendaTx on 4/24/08 9:23pm
Msg #244932

After reading what they said I agree-it is "fear" marketing

technique. "You'd better stick close to us or you'll be S.O.L."

Persuasive speech...or sales tactics... includes (off the top of my head)
Money
Power
Sex
Beauty
Intelligence
Prestige
Popularity
and/or
F E A R

Here is a basic explanation I found online to explain better what I mean:
http://www.marketingrocketfuel.com/ARTICLE17ReasonsPeopleBuy.htm

Reply by MikeC/NY on 4/24/08 9:43pm
Msg #244934

The NNA's concern is not about reading the script, but about explaining the docs, which they claim we are "by law" forbidden to do.

This is just stupid. First of all, I'm not aware of any law that makes it illegal for a notary to explain loan documents. You can explain anything in general terms - what you can't do is give advice, unless you're licensed to do so. If the proposed rules take effect we'll have to be familiar enough with the documentation to answer general questions, but anything specific about the loan has to go back to the LO. I don't see how that's any different from the way things work today, other than that it might put the "point and sign" notaries out of business...

Also, the point they seem to be missing is that even if the RESPA rules are changed, it's not the end of the world - a notary will still be required for some of those docs at the time when those docs are signed. Worst case scenario - someone else "conducts" the closing (possibly by phone) while the SA does everything else.

My guess is that if the proposed rules are enacted, the TCs and lenders will either be looking for notaries who are already trained in loan documentation, or they will offer training.

Reply by Gary_CA on 4/24/08 11:56pm
Msg #244948

This is a very good and well thought out solution...

...if the problem with the mortgage mess is that the borrowers can't read.

Reply by JanetK_CA on 4/25/08 1:57am
Msg #244957

Re: This is a very good and well thought out solution...

Not only that... I can just imagine me pulling something like that out at the start of a signing like one I had tonight where one of the borrowers just got home from the hospital today! Also, the sophisticated borrower who just wants to get it signed isn't going to have too much patience with us reading a script. It's hard enough to get them to sit through a quick review of signing procedures when they've been through several signings and think they already know everything. (BTW, I really do love those types of signers because I get out of there faster! )

Reply by jba/fl on 4/25/08 2:01am
Msg #244958

Re: This is a very good and well thought out solution...

if the problem with the mortgage mess is that the borrowers can't read."

I don't see that is the problem. They just don't want to read...they want a bedtime story w/a happy ending which translates to money coming their way, whether cash out or lower interest which translates to lower payment meaning less out of their pocket monthly.

Going to the 96 page article:
"The benefits of the script are not estimated separately from the benefits of the new GFE
($6.48–$8.38 billion, see Section I.B of Chapter 3). It is assumed that the script reinforces the consumer savings of the new GFE by compelling settlement agents and borrower to check the compliance with the
tolerances. The script is a vital part of the new GFE. Requiring is expected to increase the number of consumers who realize the full benefits of the proposed rule.93 The benefit of the script is to double-check the final figures."

I went straight to the last page - too much gobbledy-gook to wade through, but conclusions shine good lights. The final sentence says it all: double-check final figures. Personally, my law is rudimentary at best, but even I can understand that plain statement. This whole thing appears to be based on the GFE - the estimates received initially when applying for loan against the final GFE and how much the variances come to be, that they should be within tolerances of ?? what?, logical guesses? ie, estimate for flood search $9, final cost: $11. Tolerable range I suppose, but still 25+% higher than initial est.

I still like, best of all, giving HUD to bo. 24-48 hrs. in advance of signing paperwork. That gives time to hash and rehash w/o wasting time at the table as it will be taken care of prior to my arrival (in an ideal world anyway).

(I really need to learn to do technical writing - I could have wandered for 96 pages and made some big bucks - you know someone did)

An afterthought: in credits to sources was this gem: "Simplifying and Improving the Process of Obtaining Mortgages to Reduce Settlement Costs to Consumers,"
It looks as though many are on this course of action through offering notaries less and less as time goes by for the work that they are doing.

Reply by Marlene/USNA on 4/25/08 8:45am
Msg #244977

I've been a technical writer for 21 years. . .

. . .no big bucks!

Reply by Marlene/USNA on 4/25/08 8:50am
Msg #244979

In fact (she says, getting into her subject). . .

. . .technical writing is the opposite of what is implied. It is taking subject matter and distilling it to its essence, with the audience in mind. It is doing with technical documentation what the Plain English movement proposes to do with government documentation - make it readable and usable.

</off soapbox>

Reply by Lee/AR on 4/25/08 3:19am
Msg #244961

Figures will clarify. Words will bore them.

The GFE (& final HUD reality) is not the problem that has brought about the 'mortgage crisis'. ARMs, interest only, teaser rates did that. If they would just add the following sentence to the TIL (if not a fixed rate)--I think a lot of eyes would be opened quite wide (& eyebrows go up, too). " If the interest rate of your mortgage increases by 1%, the corresponding increase in your monthly payment will be $(a dollar amount)."

Keeping it real simple... a $100,000 mortgage at 5%, increasing by just 1% to 6%, the monthly payment will go up by $62.73. Even the densest person can do minimal math & see that if it goes up 2, 4, 6%...well, er, uh, hmmm.... that's a lot of money to come up with every month!

Reply by JanetK_CA on 4/25/08 3:20pm
Msg #245039

Exactly!!!!!

This is the only suggestion I've heard that makes sense! People make decisions with their pocket - and not necessarily rationally. LOs sold those old loans mostly by convincing people who think short term that their monthly payments would go down. Very few people have the know-how (or make the effort) to calculate how much those potential adjustments could cost them with current info provided. With your example, I think it would make the reality much more clear.

One couple (with several kids) that I did a signing for clearly sticks in my mind. We did the signing on their coffee table in their little apartment because the house was mostly packed - boxes were everywhere - for the move into the first house they were about to buy. If memory serves, it was a neg am loan that adjusted pretty quickly. They commented was that they would just have to earn more... I remember walking away wondering how long it would be before they ended up in financial trouble. I'm sure they had no idea what the actual dollar amounts would be.

Reply by sue_pa on 4/25/08 7:41am
Msg #244971

HFC/Benef video

Who works in these offices where the closing room has a window? The borrowers are sitting in there jabbering the entire time they are to be watching their video.

I personally am reader, not a listener. If someone were to sit and read a docuemnt to me I'd get very little out of it. If I can look at a piece of paper and read it, I get a whole lot more out of it. Naturally, others like to listen and not read - one 'solution' doesn't fit all.

One 'reform' that would make sense to me would be to have the GFE and the HUD look remotely alike - same terms, same order, same way of totalling the figures.