Posted by Robert/VA on 3/29/08 10:21am
Msg #241269

VIRGINIA Notaries Only - CRESPA issue

I am seeing more and more "Short to close" loans, where the borrowers have to provide either a personal check, or more likely, a certified check, to the closing table. This is to be returned with the loan doc package. If I read Virginia Notary law correctly, this is illegal for a notary to do so, unless that notary is CRESPA certified. The law seems to state that if a notary but ONCE handles funds, without being CRESPA certifed, that notary is precluded from EVER doing any more closings!! Not sure how other Virginia notaries are "Handling" this issue. Would providing the borrowers a seperate envelope be still considered handling funds? Would having the borrowers actually send a check in themselves, and dropoff themselves at UPS or FEDEX facility be considered handling? (Not sure how the Virginia would rule on that?)! I do know that a Notary can be CRESPA certified, but it costs something around $1000 per year to do so, and one must be associated with a Title Company. Any thoughts for us Virginia Notaries on this issue?!

Reply by MistarellaFL on 3/29/08 11:38am
Msg #241276

http://www.vsb.org/crespa/13guidelines.html

III. What are "escrow, closing or settlement services?"

"Escrow, closing or settlement services" occur after the buyer and seller have executed a contract for the sale of real estate or after a lender has agreed to refinance or provide to borrower a loan secured by real estate. "Escrow, closing or settlement services" are those administrative and clerical services required to carry out the terms of contracts affecting real estate. The Act defines these services to include, but are not limited to:

placing orders for title insurance;
receiving and issuing receipts for money received from the parties;
ordering loan checks and payoffs;
ordering surveys and inspections;
preparing settlement statements;
determining that all closing documents conform to the parties' contract requirements;
setting the closing appointment;
following up with the parties to ensure that the transaction progresses to closing;
ascertaining that the lender's instructions have been satisfied;
********conducting a closing conference at which the documents are executed; *******
receiving and disbursing funds;
completing form documents and instruments selected by and in accordance with the instructions of the parties to the transaction;
handling or arranging for the recordation of documents;
sending recorded documents to the lender;
sending the recorded deed and the title policy to the buyer;
reporting federal income tax information for the real estate sale to the Internal Revenue Service.

Reply by SharonMN on 3/31/08 4:00pm
Msg #241535

I'm not from VA, but I'm not sure why acting as a courier (accepting a check made out to the title company and mailing it to the title company) would be considered "handling funds." If the notary can't do this, wouldn't the FedEx guy be in trouble, too?

Reply by Sandra Clark on 3/29/08 2:14pm
Msg #241297

If there are funds due at closing I always make sure TC knows that I cannot handle the funds. I request a separate label, prepare the proper package and have the borrowers take care of that themselves without my ever having to touch the check. I have never had a problem doing it that way. My personal take on the non handling of funds is that we cannot accept or disburse funds from an account such as an escrow account, that you have personal control over without being CRESPA certified. I have heard over the years that the Land Title Agents are the ones that raised cane on this.

Reply by RickinVA on 3/29/08 3:00pm
Msg #241303

Check your private mail. For some reason, I can't post the message.

Rick

Reply by Sandra Clark on 3/29/08 3:45pm
Msg #241313

Didn't come thru there either. Email me direct please.

Reply by Sylvia_FL on 3/29/08 3:55pm
Msg #241316

Sandra, I think he was replying to the original poster. n/m

Reply by Sandra Clark on 3/29/08 4:14pm
Msg #241320

Re: Sandra, I think he was replying to the original poster.

(knock on my forehead)! "and I could have had a V-8" this morning!! LOL

Reply by Sylvia_FL on 3/29/08 5:09pm
Msg #241331

Re: Sandra, I think he was replying to the original poster.

Nah - in the morning it should be a Mimosa

Reply by Shannon_Va on 3/30/08 2:03pm
Msg #241411

Yes, you must be CRESPA registered to take a check of any kind.
Do a search with the orange tab at the top to look for several other posts I have written about this subject. It does not cost $1000 a year to do it, but I am sure your e&o is more than that a year anyway....
Basically, you must be a licensed underwriter appointed with a title insurer such as Lawyers Title, Old Republic, etc...you must have e&o and have a $100,000 surety bond which is about $300 a year depending on how good or bad your credit is. It isnt a hard process and it doesnt take that long to accomplish either. And you can charge much more for you signings as well.
Feel free to email me with questions.

Shannon

Reply by Teresa/FL on 3/30/08 2:10pm
Msg #241415

What if the property is in Florida but the TC is in Virginia

with the signing taking place in Florida.

The TC is instructing the borrowers to send in their check separately instead of handing it to me to send in with the signed documents. Given the scenario above, is this necessary?

Reply by Shannon_Va on 3/30/08 2:15pm
Msg #241417

Re: What if the property is in Florida but the TC is in Virginia

It has always been my understanding that the state in which the signing takes place (not where the title co or property is) is what the rules of a notary would apply.

For example, here is VA, we are required by the state to affix out commission id # to our notary ack, but other states do not have this requirement. So if my doc was signed in that state, it is ok since they dont require it.

If your state allows you to take a check and send it back, then why not? As a title company ownedr here in Va, when I have a closing happening out of state and in that state you can take money to send to me, then I am fine with that, (as long as it is not cash you are taking). But you can rest assure I will make sure the notary I use is a reputable one!

Reply by Teresa/FL on 3/30/08 2:24pm
Msg #241419

Re: What if the property is in Florida but the TC is in Virginia

Maybe the TC is just being overly cautious. I have accepted many checks for other companies and always make sure the check is payable to the TC, or endorsed over to the TC if the borrowers had the check made payable to themselves. There have been no issues with any checks I have handled, as far as I know.

The next time this company calls I will question them about this. If they will agree to let me collect the check it will save them the money for the FedEx shipment.

Reply by Shannon_Va on 3/30/08 2:28pm
Msg #241420

Re: What if the property is in Florida but the TC is in Virginia

But you are in Florida, so you may not have the same restrictions as we do here in Virgina.

Reply by Teresa/FL on 3/30/08 3:08pm
Msg #241428

That's right we don't have the same restrictions

I think they were just on "auto-pilot" and handled the arrangements they way they were used to, as if they property and closing were in Virginia.