Posted by Harry [NR] on 8/21/08 1:38am
Msg #260929

Notary Lawsuit Threat and Possible Lender Fraud

Your thoughts and opinions would be greatly appreciated with respect to the following scenario:

--------------------------------------
Bank A contracts Signing Service to perform home equity loan closing for a $60,000+ loan in July, 2005.

Signing Service contracts independent Signing Agent to perform said service on July 28, 2005.

Signing Agent receives PCL docs via eLynx on July 28, 2005, performs signing, and returns all docs.

Loan funds and is later sold to Bank B.

Borrowers file bankruptcy in 2008, at which point Bank B claims that the "Credit Agreement and Disclosure" (the "Note) was never signed and demands that Bank A repurchase the loan.

Bank A contacts Signing Service and Signing Agent, asserting that the Note was not signed by the borrowers and demands that they hold Bank A harmless from any loss resulting from Bank B's claim and any possible repurchase. Bank A blames the notary.

Bank A asserts that the "closing" was performed on July 22, 2005 and provides a copy of an unsigned Credit Agreement and Disclosure, bearing that date, which was stamped by Bank B, allegedly as part of the purchase. The document does not appear to be consistent with PCL-based documents.
--------------------------------------

Again, I would like to know what you all think. Have you seen anything like this before? Do you think the notary should be on the hook for $60,000+ and would it matter if the document in question was signed? (While it is likely IMPOSSIBLE to prove that it was signed, it may be possible to prove that the document presented by Bank B could not have been what was in the loan package.) Assuming the document was either not present or not signed, where do you believe the greatest lack of due diligence resides? Is a deal a deal, or should a bank be able to claim, 3 years after the fact and after their client has declared bankruptcy, that something was wrong and that they should not be responsible?

Here is a copy of the demand by Bank A:

http://www.notaryrotary.com/library/NotarySuitThreat.pdf

Feel free to comment.

Harry
Notary Rotary

Reply by GA/Atty on 8/21/08 2:48am
Msg #260932

Notary is not on the hook, and, assuming borrower was making

payments pursuant to the unsigned note to Bank A and then Bank B before filing for bankruptcy protection, I think it doesn't matter whether the note was actually signed in 2005 or not.

Reply by christiSocal on 8/21/08 3:04am
Msg #260934

I don't think it'll fly either, but can you imagine if it did? How many loans are going to show up "missing signatures" or whatever reason the bank comes up with to get out of their responsibility? There are alot of banks out there looking for a way out....

Reply by jojo_MN on 8/21/08 8:57am
Msg #260952

Could the bank have gotten a copy of the unsigned docs and swtiched that page in a desperate attempt to get out of the loan?

Reply by Virginia Doyle on 8/21/08 8:25pm
Msg #261144

Besides the mortgage or deed of trust, whichever your state uses, and the note, what other pertinent documents COULD a lender use to try to cut their losses against us as signing agents by claiming the document was not signed at closing. Could a claim be made that the TIL or RTC was not signed three years after the fact, and therefore, the Notary is responsible. Sounds like predatory lending has grown to predatory collection. Even if the Notary wins, it is still a loss of time, aggravation, self-confidence, and more to drag the notary through the mud just to clean up their records.

Reply by ReneeK_MI on 8/21/08 4:53am
Msg #260936

This just doesn't add up, in my mind - the 'unsigned' Note would have had to slip past multiple QC's, requiring just too many coincidences to sound plausible. REGARDLESS - you can't prove a negative! There is no means of PROVING that a Note was NOT signed at the closing (regardless of whatever the true date was).

Were I to receive this, I would completely disregard it as Bank A's attempt to stick their loss to someone else/anyone else via a scare tactic.

I'm not a lawyer so please don't give my lay opinion any weight whatsoever, this is just a conversation among peers.

Reply by BrendaTx on 8/21/08 5:50am
Msg #260939

I think that GA/Atty is right. As well as Renee'. There was a Note/Credit Agreement at some point but maybe they lost it(?). QC is at fault, if so. Not the notary.

This is something I think we'll see more of. A way to pass the buck for loans that go bad down the road and are headed for bankruptcy court or foreclosure. (Keep good journals.)

It's coincidental that I was googling "Modifications" last night and found this site:
http://www.loansafe.org/index.php?pid=24

One sample letter at this site said this, in part:

"Additionally, I believe that a notary was not present to witness my signatures on several pertinent documents and that this transaction did not take place in a legitimate title/escrow/real-estate office with any title/escrow/real-estate professionals therefore leaving us ill advised at the time of closing."

How nice that the notary is being thrown under the bus as often as possible!

Reply by JulieD/KS on 8/21/08 7:13am
Msg #260946

I would think the statue of limitations on this has long since expired. They are really graspoing at straws, aren't they, and possibly committing fraud.

Reply by PAW on 8/21/08 7:54am
Msg #260948

SOL (Statute of Limitations) probably have not expired. Typically, it expires at the termination of the loan. (At least in most states.) Further, if the loan was executed in 2005, there are 'certified' copies of the Note somewhere. A title company can't close the file and disburse funds without final lender approval, which includes copies of the signed Note and DOT/mortgage, among other documents. (Each lender has their own list of funding documents.)

I don't see how Bank B can say the Note was never executed. Again, I'm sure there is at least one 'certified copy' in someone's file, either at title or Bank A.

At any rate, I don't think the signing agent has anything to worry about. Their notary journal (assuming the NSA has one) should show the 'transaction' was completed, with signatures as required. Even though the Note is not normally notarized, the journal would show that the process was completed, especially if the lender and title company have original/certified copies of the executed, and notarized, DOT/mortgage.

I agree with Ed (GA/Atty) that since the borrower has been making payments to Bank A on the Note, that whether or not the Note is actually signed may be immaterial. (But I still think the Note was signed and properly executed for it to be going on for this long.)

Finally, missing a signature on an non-notarized document (i.e. the Note), would not fall under the Notary's E&O anyway. So there would be no claim. This, of course, does not release the "Signing Agent" from possible liability.

Reply by Kevin/Ct on 8/21/08 7:57am
Msg #260949

This sounds like a fascinating case and defenses for negligence. It almost resembles a question you would expect to find on a final exam in law school. Undoubtedly the
Defendant(s) will demand a jury trial.

There are few defenses to a foreclosure action in Connecticut, but failure to sign a note is one of them. Connecticut is a title theory state with respect to mortgages which means that the borrower splits his title with the lender. The lender takes legal title to the property, and the borrower retains equitable title to the property. Contracts invloving transfer of an interest in real estate are required to be written in order to satisfy the statute of frauds in Connecticut. The note is the promise or contract made by the borrower to the lender to repay the loan. The mortgage provides the security for the note. The lender would not be able to foreclose on the borrower's property. I saw a judge pronounce this from the bench in a foreclosure action several years ago.

Since the Plaintiff can not foreclose on the property at least not in Connecticut, it most likely would seek recovery of its damages through other theories... probably contract breach and negligence. Financial institutions and their insurance carriers usually cast a wide net when attempting to recover damages. So the title company (assuming there was one involved), signing service and signing agent become fair targets as Defendants in the case. All it takes to justifiably file suit in Connecticut is a reasonable basis to assert the claim...a very easy standard to satisfy.

The title company would be in privity of contract with the lender. The signing service would be in privity of contract with the signing agent. So in addition to the defenses that the Defendants would most likely assert they would also probably assert cross claims and/or third party claims against each other to pass their liability to the other party in the event that they lose to the Plaintiff.

The inconsistency of the dates on the documents will definitely add fuel to the fire of the defenses presented by the Defendants. In order to win its case the Plaintiff will have to offer into evidence the original (or certified copy) of the unsigned note. The the discrepancy in the dates would raise a serious question as to the admissability of the unsigned note as evidence. If the note was ruled adimissable... there would still be a serious question as to the weight to be given to it as evidence by the trier of fact (Jury in a trial by jury or judge in a trial by the bench).

It is inconceivable that the lender would not have noticed that the note was not signed immediately upon receipt of the doc package from the signing agent. This failure may also give rise to a defense of contributory negligence. Most if not all states are now comparative negligence states. There was a time when the contributory negligence of the plaintiff was a complete bar to the plaintiff's recovery of damages. In comparative negligence states that is no longer true. If the Plainff is found to be contributorily negligent, the trier of fact will assign a percentage to the Plaintiff's negligence and reduce its recovery of damages by the amount attributable to the Plaintiff's own negligence in the case.

Some lenders record the note with the mortgage as a safety measure. The land records office becomes a safe repository for these documents, and if the original documents are lost or destroyed, certified copies issued by the land records office become fully admissable in evidence.

The bankruptcy of the borrowers would probably not present a problem with respect to the Plaintiff's claims asserted against the other Defendants. The automatic stay issued by the bankruptcy court protects only the bankrupt. If the note and mortgage had been enforceable against the borrower it would have been a simple matter to file a motion for relief from stay with the court. If granted the lender would then proceed with the foreclosure action against the borrowers. You run into this scenario quite often while performing title searches on foreclosure properties. However, in the instant case it sounds like it would be a waste of time
since the the oringinal note (or certified copy) was either not signed, or cannot be produced as evidence. Claims other than foreclosure asserted against the borrower by the lender would be barred by the bankruptcy.

Whether the claim is time barred by the statute of limitations is also a valid defense to be raised by the Defendants. Whether it would be time barred would depend upon how the statute of limitations is drafted in the forum state. Some states' statutes of limitations begin to run at the time of the negligent act or contract breach. In other states the statute of limitations begins to run later ...at the time that the negligent act or contract breach was discovered or in some states should have been discovered by the Plaintiff. In many states the statute of limitation on contract breach claims in longer that on negligence claims. In many cases there are contract law corollaries to tort claims that can be invoked. The same fact pattern make create a claim in both negligence and contract breach. While the negligence claim may be time barred...the contract breach claim may not.

The above analysis is based on Connecticut law, and the law of the forum state should be consulted to determine if the same precepts are operative in the forum state.

This case presents a prime example of why signing agents should carry liability insurance, and should explore completely the extent of coverage provided for claims.

Reply by BrendaTx on 8/21/08 9:45am
Msg #260962

What a great summary, Kevin.

Wow. I didn't think about all those things (naturally).

I agree with this, "Some lenders record the note with the mortgage as a safety measure. The land records office becomes a safe repository for these documents, and if the original documents are lost or destroyed, certified copies issued by the land records office become fully admissable in evidence."

However...borrowers and their attorneys tend to balk at the idea of putting an acknowledgment on the note for that very reason (in my experience/observation)...they don't want their "terms" on the loans "out there" and having an ack on a note will certainly make that possible.

Reply by PAW on 8/21/08 10:21am
Msg #260979

Re: What a great summary, Kevin.

>>> ... they don't want their "terms" on the loans "out there" and having an ack on a note will certainly make that possible.<<<

What does "having an ack" on any document have to do with whether or not it can be recorded? Does Texas require all documents to have an ack or jurat in order for them to be recorded?

Further, terms of loans are often part and parcel to a mortgage (instrument) or DOT, especially in the case of adjustable rate loans. There are all kinds of riders that get recorded whether or not the Note itself is recorded the lays out the terms.

Reply by Linda_H/FL on 8/21/08 11:54am
Msg #261030

Re: What a great summary, Kevin.

Paul, in most states (and recording venues) notarization is required to render a document recordable..mortgage riders are considered a part of the mortgage - they're itemized in the mortgage itself so are considered part and parcel of the mortgage so the mortgage ack is sufficient (just like the Schedule A) - however if you wanted to record an entirely separate document, some areas may require that it be notarized. IME

Reply by PAW on 8/21/08 12:34pm
Msg #261046

Re: What a great summary, Kevin.

>>> ... in most states (and recording venues) notarization is required to render a document recordable ... <<<

I disagree. There are a ton of non-notarized documents that are recorded. I agree that documents conveying property ownership typically are required to be notarized prior to recording, but Notes and other contracts do not convey property ownership and are often recorded as are many other public records and documents.

Reply by BrendaTx on 8/21/08 1:38pm
Msg #261067

Paul...Linda and I are probably brainwashed from

the years of working with lawyers. That's where we've picked up that crazy idea of the county clerk requring a notary act on documents having to do with property.

While it may sound like pure myth to you, it's not to us. It's something we've been taught by real, licensed, practicing attorneys...I'm guessing they didn't pull it out of their rears.

You are absolutely right that if you want to "record" the TV guide in the public records you darn sure can...but for whatever reason...I have been taught what I stated about the note. I'm not going to argue with my previous bosses or my current boss about it and will continue to act as if all these guys have known their business.

Reply by PAW on 8/21/08 2:05pm
Msg #261073

Did you even read what I wrote?

>>> That's where we've picked up that crazy idea of the county clerk requring a notary act on documents having to do with property. <<<

There's no disagreement with that statement. Actually I even said:

[quote]
"I agree that documents conveying property ownership typically are required to be notarized prior to recording ..."
[/quote]

Reply by Linda_H/FL on 8/21/08 4:01pm
Msg #261120

Now..Now guys....fight nice...<G> n/m

Reply by jojo_MN on 8/21/08 9:01am
Msg #260953

Maybe we can start offering another service to the borrower--scan all documents and give them cd with their signed docs before returning? $50 should cover the cost of scanning, the cd and postage. Either that or it could become part of TC procedure.

Reply by Kevin/Ct on 8/21/08 9:06am
Msg #260955

It may be better for the lender to record the note with you mortgage. That way it is always assured that it will be able to obtain a certified copy.

Reply by BrendaTx on 8/21/08 9:32am
Msg #260958

At first, I said, "Great idea!" and then I thought...probably not. As a matter of fact, the borrowers (in Texas) anyhow are SUPPOSED to receive a copy of their signed documents...I tell them to contact the title company/lender immediately if they want theirs.

$50 to get something they are entitled to have for free would set off alarms here. In MN it might be a bonanza.

Reply by Kevin/Ct on 8/21/08 10:46am
Msg #260992

In Connecticut the original note is returned to the Lender after recording. The land records office retains only a copy from which it can generate certified copies. The lender retains the original note and mortgage because the best evidence rule requires him to introduce the originals at trial as exhibits. If they have been lost or destroyed certified copies of the note and mortgage can be introduced instead.

When the borrower pays off the loan the cancelled originals of the note and mortgage are returned to him as well as releases filed with the land records office. The borrower receives them free of charge.

Reply by BrendaTx on 8/21/08 3:04pm
Msg #261096

Kevin - that's the general way of handling the

mortgage/dot and note in Texas as well. Recording is the same.

Referring back to Jojo's post...giving them an option to "purchase" copies for $50 would upset people because signers are entitled to a signed copy before recording.

I hope that makes sense.

Reply by Kevin/Ct on 8/21/08 3:55pm
Msg #261117

They do not have to pay $50.00 for copies in Connecticut. The can get certified copies from the town hall for $1.00 per page plus $1.00 for the certification. If they want uncertified copies they can request them from their loan officer after the doc package is returned, and make receipt of the copy within the rescission period a condition of not cancelling.

Reply by Lee/AR on 8/21/08 9:28am
Msg #260956

Basically...missed by too many QCs to be believeable, but

if they can get the Notary's E&O carrier to cough up with some cash, that's good for the bank, bad for the notary. It's the 'deep pockets' theory of lawsuits. And a really good reason to ask yourself some interesting questions about the motivation of the Bank/TC who require huge amounts of E&O. jmo

Reply by MW/VA on 8/21/08 9:32am
Msg #260959

Interesting scenario. I'm not an attorney, but I can't see how this could hold up.
Are they trying to say that the bank funded a loan without a signed Note???--really!
IMO, if there is negligence involved, it would certain be on their part.

Reply by RickinVA on 8/21/08 11:40am
Msg #261023

Re: Possible Solution Notary Lawsuit Threat

My thoughts...I throw this up for comments from the more learned participants!
I'm not an attorney either but this scenario worries me a little. How do you prove a negative when all copies are in someone else's possession? My attorney suggests keeping a copy of the signed sig pages of the note and DOT, and a copy of the signed TIL. I mentioned not wanting to keep copies of docs, and he asked which is more important: My house or theirs? E&O Ins carriers would just come after us if they had to pay anything on our policies.

What say ye?

Rick

Reply by PAW on 8/21/08 12:40pm
Msg #261048

Re: Possible Solution Notary Lawsuit Threat

My attorney advised just the opposite. Besides that, Florida does not authorize a notary to keep a copy of documents they notarize. Considering the extent of personal identifying and financial information, keeping copies of the documents may require certain protections to be executed in line with state and federal privacy laws. Not something I wanted to do when I was a broker and certainly not something I am willing to do now.

Reply by Gary_CA on 8/21/08 9:39am
Msg #260960

Dear Fraud Prevention Specialist

I am in receipt of your letter. It is certainly possible that I missed a signature on a document in your 100+ page loan package, but it is not likely. It is highly unlikely that I missed a signature on the note. At any rate, I am a notary, not an underwriter. Surely you know that the customary practice is for your underwriters to review the package prior to funding.

After funding the loan, you say you endorsed the note over to the purchasing bank and still did not notice the missing signature?

I'm sure your stockholders and FDIC would love to know about the high level of care your loan department practices. I know a couple of blogs that would love to post a copy of the letter you sent me.

I'm on my way out of town for the weekend, so I can't deal with this until Tuesday. Tell ya what, FedEx me a document holding me harmless, a confidentiality agreement and a check for $1,000 and I'll have my lawyer take a look at it.

Have a nice day.

Reply by Dennis D Broadbooks on 8/21/08 9:50am
Msg #260963

Gary...

...you are a HOOT! Love your sense of humor!

Reply by BrendaTx on 8/21/08 10:07am
Msg #260969

"Love your sense of humor!" .... as do I, Dennis! n/m

Reply by Dennis D Broadbooks on 8/21/08 10:19am
Msg #260976

We Gotta Be Careful, Though...

...he might start believing in his press clippings!

Reply by DianeCipa on 8/21/08 9:51am
Msg #260964

three thoughts

1. No closer - independent or not - should close a mortgage transaction without making certain there is a NOTE.

2. The title agent should have retained a copy of signed documents and should be able to produce a signed NOTE from the archives.

3. The validity of the mortgage would be covered by a loan policy so let's hope the lender had a loan policy. If it was an uninsured mortgage and there was no title agent involved and the bank decided to use a signing service........yoi.

Reply by DianeCipa on 8/21/08 9:55am
Msg #260965

one more thing

The lender had an absolute duty to check the document package when it was returned from signing. I know of NO lender that does not look for the NOTE first and then make certain that the NOTE is placed with a custodian or some other safe method of storage.

It would be interesting to query the formal procedures this lender has in place and whether their employees followed protocol.

Reply by Pat/IL on 8/21/08 10:29am
Msg #260984

Re: Excellent opinions, I think.

I would only add that, since this is a junior loan (we are not told the venue) my best guess would be that no title insurance was required - thus, no title company holding a copy of the note.

If the mortgage had been insured, there should be no reason to demand satisfaction from the signing service, as the lien would be guaranteed by the title company (unless that 'wide net' thing that Kevin mentioned is in play). The letter does suggest, also, that GB Home Equity contracted the signing directly through the signing service.

I agree with all who noted the negligence on the part of the lenders. If they did not bother to look for a signature on the credit agreement, what exactly does their underwriting policy consist of?

Reply by Kevin/Ct on 8/21/08 11:00am
Msg #260998

Re: Excellent opinions, I think.

In the event that the transaction was insured... the insurance carriers stand in the same relation to the Defendants as the lenders under the standard subrogation clauses contained in most insurance policies. If the lender did not proceed against the title company, signing service and signing agent....its insurance carrier would pursue a claim against them to the extent that it paid the claim to the lender.

Reply by DianeCipa on 8/21/08 12:20pm
Msg #261041

I agree.

Would be interesting to see the terms of the contract between the lender and the SS and the SS and the notary.

Reply by WDMD on 8/21/08 12:26pm
Msg #261042

Re: Excellent opinions, I think.

"If the lender did not proceed against the title company, signing service and signing agent....its insurance carrier would pursue a claim against them to the extent that it paid the claim to the lender."

It would be interesting to hear a signing services defense. "But you honor, all I did was make a phone call." While in here we get lectured at how difficult their job is.

Reply by MistarellaFL on 8/21/08 12:42pm
Msg #261050

Well, WDMD

I think this may be over their collective heads.
Otherwise, we'd see them responding to this thread.
Strangely enough (not), they are all obviously absent today, and even more strangely (not), they don't seem to have an opinion on the subject.
This is an area I'd expect them to have a strong opinion on, however, it appears that they can't seem to post on anything except how we should accept the lower fees, oh, yeah, of course.....AND how profitable it will be for us to fork over our TC contacts and eliminate the research end of their marketing efforts.

Reply by ReneeK_MI on 8/21/08 2:53pm
Msg #261093

hmmm another thing to add to the list

Assuming there was an existing first, and that is also in default or foreclosure, COULD it possibly be that the 2nd is about to be cast into oblivion w/out any possible recourse - and this is the best they could come up with to find 'some kind of button that might look like a quarter' (paraphrasing my favorite literary talent!)

Reply by Pat/IL on 8/21/08 3:26pm
Msg #261110

Re: hmmm another thing to add to the list

That's a very good thought, Renee. There may not be an actual loss attributable to the unsigned credit agreement if there is no equity left to pay the junior lender. The outcome would then be the same as if the lender - the one ultimately left holding the hot potato - had had a valid, enforceable lien on the property. Generally speaking, that is. Please don't take my message board yakity-yak as an attempt to make any legal determination.

Reply by Negrete on 8/21/08 10:27am
Msg #260982

Re: three thoughts ( Silly question maybe )

Do not most all mortgages have a loan policy Diane ?

For every loan that I do myself personaly I always see a loan policy in the paperwork.

Hope you don't think this is a stupid question.

Reply by DianeCipa on 8/21/08 10:54am
Msg #260996

Re: three thoughts ( Silly question maybe )

not a stupid question at all....

Lots of helocs aren't insured. I've always wondered why title agents and insurers were contracted to so these closings without insurance because in PA - we're not supposed to be performing work unless it's connected to a policy - even if just on a concurrently closing first.

That said, I don't see any reason why a lender can't contract directly with a notary signing service for their own uninsured loans.

Reply by Becca_FL on 8/21/08 9:30pm
Msg #261151

Tony, Diane is correct.

Many lenders, most frequently credit unions, do not require title insurance on Jr. loans or only require a limited policy or Jr. policy. Some that come to mind are NFCU, WaMu, some Chase and Citi. When I worked in title here in FL we had a CU that would not pay for title insurance, but only a LTP. While in CA, working assembly line escrow, my department was responsible for closing the CU and local bank 2nds with LTPs. It's very common.

Reply by AF on 8/21/08 10:54am
Msg #260995

Re: three thoughts

Most lenders that offer HELOC's in a 2nd position or Fixed Rate Seconds do not require title insurance unless the loan amount is over $250,000. I handled hundreds of these GB Home Equity closings from 2004-2006. They were all asssigned to me by two signing services, and the docs were sent directly from GB Home Equity to the Signing Service, and then on to me. There was never a title agent involved because the loans were always in 2nd position and the amounts were always under $250,000. There were usually a few small title-related services listed on the settlement statements. These services were always provided by one specific third-party vendor that I won't name here.

Reply by CJ/Alaska on 8/21/08 12:50pm
Msg #261053

re: Lawsuit Threat

I guess as a Notary, I would remind the Signing Services that when they Paid me, it meant that they were Indeed 'Satisfied' with my work, sort of a Settlement of the service I provided..
These services will use any excuse conceivable to NOT pay us, in my experience.
This is certainly a Blaming Game, so if they thought something wasn't done that needed to be done, there is no way the Notary would have been Paid..

Reply by Gerry_VT on 8/21/08 3:06pm
Msg #261098

Notary Signing Agent Duties

Leaving aside the possibility that some other party might have been more negligent than the NSA, or might be required to insure the NSA against errors or ommissions, what are the actual duties of the NSA? That, of course, might depend on any contract, advertisement by the NSA, or instructions given to the NSA, but since those have not been included in this thread, let's assume for sake of discussion that none of those add any duty to the NSA.

At a minimum, we could expect the NSA to:

1. Print the documents, and check for any ommissions on the NSA's part, such as paper jams, or running out of paper. If the documents can be displayed on the screen, the NSA should at least check that the page count from the screen agrees with the physical pieces of paper.

2. Deliver all the documents to the signer. Give the signer time to sign everything.

3. Check all pages for any notarizations that are needed, and correctly perform all the notarizations.

4. Return everything, except the signer's copies, to the agreed-upon address, without losing any papers.

There are some additional things that are often done, but I don't really know if these fall under the heading of MINIMUM duties. This would be such things as pointing out to the signer places where unnotarized signatures are called for, noticing if any customary documents are not in the package, or writing a note to the lender/title company/signing service pointing out that the signer declined to sign certain documents.

If the items I numbered above really are the minimum requirements, then the bank trying to put the NSA on the hook would have to show, by preponderance of the evidence, that the signer signed the note but the NSA (accidentally or otherwise) substituted an unsigned note for the signed one when he/she returned the package to the agreed-upon address.

Reply by Mia on 8/21/08 3:12pm
Msg #261101

Harry [NR]

Harry, is this a TRUE scenario or ficticous? Can I ask how you obtained this?

"Have you seen anything like this before?" -- I doubt that 99.99% have seen anything like this before.

"Do you think the notary should be on the hook for $60,000+ and would it matter if the document in question was signed?" -- To answer the first part... No. To answer the second part... if the document
in question was signed, Yes it would matter.

"Assuming the document was either not present or not signed, where do you believe the greatest lack of due diligence resides?" --The Document Holder (those that created the document[s], & QC).

"Is a deal a deal, or should a bank be able to claim, 3 years after the fact and after their client has declared bankruptcy, that something was wrong and that they should not be responsible?" -- Don't know... call the Banking Regulators, see what they have to say.


**The above answers to the questions are just my thoughts and are probably not worth anything -- I am not a Lawyer / Attorney**

Reply by BrendaTx on 8/21/08 9:11pm
Msg #261149

Re: Notary Lawsuit Threat - Signing services are amazingly

quiet on this issue.

This would actually be a time when they could contribute helpful insight.

I miss Sylvia. I'll be glad when she is back.

Reply by jba/fl on 8/22/08 8:24am
Msg #261186

Re: Notary Lawsuit Threat - Signing services are amazingly

One of the first things I thjought of was that the borrowers are not left with signed copies so they may be presenting unsigned copy that was left with them and some legal eagle thought he 'had' something. I know that CW didn't send me copies of signed docs - so now am thinking, what is to stop me if this suit is successful? Not really - I have payment history and acceptance of terms by not using my RTC -and I have ethics and a good sense of right from wrong.

But, a borrower who is overwhelmed by escallating costs and is grasping straws just may not feel the same way. And we know how the current norm has become litigation happy....

Just my first thought, that I can't quite shake.

Reply by Virginia Doyle on 8/24/08 12:57am
Msg #261551

That kind of letter should keep the riff raff out of the signing business meaning less competition for the rest of us.

How could they ever prove that it was the SA that messed up? Guess at it? I'm not a lawyer, but I was under the impression that somehow someone would have to "prove" that it was a particular party who messed up. How could they prove that it was the SA and not the company who received the documents from the SA? If it ever really gets to a lawsuit, if it were me that was involved, I would ask my legal counsel to join all parties who had contact with or access to the loan document package once it left my hands, including FedEx or UPS, since noone knows if the package broke in transit and the note fell out when the docs were re-packaged. I certainly would not roll over and play dead and say okay just sue me.

Once other parties were joined as co-defendants, someone would likely come up with a copy of the signed note if for no other reason than to prove they weren't the faulting party.

This has very likely been stated elsewhere, but I will give my thoughts on it here. If the borrowers made payments for three years, then they would be admitting that they themselves thought they had signed a note or they would not have even made the first payment. They would have defaulted immediately.

If I get a bill from someone in the mail and I don't believe that I really owe it, I certainly don't go ahead and pay it. And I doubt the borrowers in this instance would have paid three years for something they didn't believe they owed.

I am not an attorney, so this is just my personal opinion.