Posted by Stamper_WI on 11/7/08 10:54pm
Msg #269270
WI/GA closing
I was called to "just do the notarizations" on an open line of credit for a couple from GA that were here due to the death of her mother. I was told there would be a GA attorney on the phone with them to go over the doc's. I called the borrowers and that was the first they knew of a specific time and day for the signing. The appt time was scheduled for the time they were supposed to be at the estate lawyers office for the reading of the will. So we changed it with the ok from the attorney. The borrowers had not even been told who the attorney was!
When I got there and had ID'd them, we called the attorney. He spoke with Mr Borrower and then with me. He said"you do the closing and call me with any questions". I had one question about a non borrowing spouse affidavit and that was pretty much it.
Now the SS talked me down a bit because I was not actually performing a full signing. I am sure they expected the attorney to do that. How is this in compliance with an attorney only law?
| Reply by GA/Atty on 11/7/08 11:49pm
Msg #269278
The fact that it is GA property doesn't trigger the atty req
The GA attorney-only law only applies to loan signings (or other real estate conveyances) that are conducted within GA, regardless of where the real estate is located.
Georgia borrowers who live near the Florida border, for example, could take their loan docs across the border and have the entire closing conducted by a FL notary, and the state of GA would have nothing to say about it.
| Reply by ChristineHI on 11/8/08 1:16am
Msg #269279
Re: The fact that it is GA property doesn't trigger the atty
That is weird because the two Georgia signings I have done, I did here in Maui. The properties were in Georgia, but the borrowers were here in Maui on vacation.
The documents contained an "attorney waiver form". We had to call the attorney from the signing table, he got on the phone briefly with the borrowers to discuss the waiver form and then the borrowers signed that form. That document was then sent back with all the other docs we signed and the attorney in Georgia will then sign that form and get it notarized as well when the package is received back in Georgia.
This was required in order for my 2 Georgia closings to fund.
There was also a witness requirement. The deed required two witnesses, I being one and another an additional witness.
I am not sure if your information is accurate. Of course, I am no expert in Georgia notaries as I am in Hawaii, but that has been what was required of me here in Hawaii for my 2 Georgia signings.
One I did just last week in fact.
| Reply by PAW on 11/8/08 7:11am
Msg #269284
Re: The fact that it is GA property doesn't trigger the atty
Please read the following, provided by a GA attorney (not GA/Atty, but another NotRot member). Pay specific attention to item (3) below as it is in direct response to this situation:
James R. Kobleur,
Attorney at Law
Savannah, Georgia
I am asked, often, (1) Whether Georgia is a "Lawyer Only" State and, if so, (2) whether a lawyer is needed when the borrowers are located in Georgia but the property is in another State. Questions also arise regarding (3) whether a lawyer must conduct the closing in a situation where Georgia real estate is given as security when a loan is closed outside the State.
Most people in the loan industry use the term "Lawyer Only State" to refer to those states which require that a lawyer (as opposed to a Notary or other "Loan Signing Agent" conduct all loan closings in which real property is given as security for the loan, even if the lawyer's role involves only explaining the documents and witnessing the signing of those documents but does not require the lawyer to perform a title search or other activities normally associated with closing a real estate loan. The question arises most often in the context of a Refinancing of an existing loan ("REFI" or the granting of a Home Equity Line of Credit ("HELOC" where the lender has prepared its own loan documents and has obtained a title search from a non-lawyer or from a lawyer other than the person conducting the closing.
Question (1), "Is Georgia a Lawyer Only State?" was answered definitively by the Georgia Supreme Court in November 10, 2003 when it issued a ruling in the case designated: IN RE UPL ADVISORY OPINION 2003-2 (277 Ga. 472). That case held that a so called "Witness-Only" closing may be conducted only by a lawyer in Georgia. The Supreme Court Opinion, with slight formatting changes to increase readability for the lay person, and the UPL (Unauthorized Practice of Law) Opinion from the State Bar on which the Supreme Court Opinion is based, may be read HERE (http://www.kobleur.net/Lawyer_Only2.html).
***Questions (2) and (3) have not been addressed by the Georgia Courts, to the best of my knowledge, and my opinion, expressed below, does not constitute legal advice and should not be relied upon by anyone in making a decision regarding the issues discussed. You should consult your own attorney concerning the state of the law applicable to your particular situation.
Question (2), "Is a lawyer required for a closing when the borrowers are located in Georgia but the real property given as security for the loan is located in a state other than Georgia? It appears that the Supreme Court decision referenced above, although not specifically addressing the question presented, did not limit its Opinion to real property located in Georgia and would clearly require that a lawyer conduct the closing in this situation. The practice of law, as it relates to conveyancing, is an activity unrelated to the location of the property involved. As the Georgia Supreme Court has ruled that the actions of overseeing the closing, reviewing and explaining documents and obtaining signatures constitutes the practice of law in Georgia, the location of the real property is immaterial. It is the actions, in the State of Georgia, of the individual conducting the closing which are subject to Georgia Law, not the property itself. If those actions are conducted in Georgia then it is highly likely that the Court's Opinion applies and a lawyer is required. My only caveat to this position would be a loan closing conducted in Georgia but involving real property located in those states which use Mortgages (or other instruments which merely create a lien against property) as opposed to Security Deeds or Deeds to Secure Debt. Security Deeds and Deeds to Secure Debt, as used in Georgia, actually convey legal title to the property used as security for the loan to the Grantee, the lender, while leaving the Grantor, the borrower, with equitable title. Mortgages, on the other hand create a lien against property used as security for the loan but leave legal title in the landowner, the borrower. Since the rationale of the Supreme Court opinion rests, at least in part, on the fact that only lawyers may prepare and supervise the creation and execution of a "deed of conveyance", the Court might hold that a closing conducted in Georgia but involving a loan secured by a mortgage on real property in another state does not constitute "conveyancing", because of the lack of a "Deed of Conveyance", and thus conducting such a closing might not constitute the practice of law. However, even in this situation, it is more likely that the Court would hold that a mortgage conveys a lien from Mortgagor to Mortgagee and is thus a conveyancing transaction, regardless of the absence of a "Deed of Conveyance".
Question (3), "Is a lawyer required for a loan closing conducted in a state other than Georgia but in which Georgia real property is given as security?" In my opinion, the answer is No. Under our legal system, a State Court's jurisdiction, in most cases, is limited to acts occurring within its geographic boundaries. The Georgia Supreme Court has jurisdiction to define what actions constitute the practice of law in Georgia but that jurisdiction does not extend to acts carried out in other states. Each individual state has the right to define the "Practice of Law" within its boundaries and those states, such as California, which allow notaries to conduct "Witness Only" closings within their boundaries are not bound by the Georgia Supreme Court's Opinion as to what constitutes the practice of law. It is the location of the closing rather than the location of the property which governs whether the closing must be conducted by an attorney.
***Again, I stress that my answers to questions (2) and (3) are only my opinion! You should consult your own attorney concerning the legal status of your actions in those situations.
----- ----- ----- -----
Note that even though an attorney may not be required per GA statutes, nor the state in which the documents are signed, it may be the policy of the lender and/or title company to have an attorney on the phone for GA properties.
As for witnesses being required, that has nothing to do with whether or not a state is an "attorney only state". It has everything to do with a states recording laws. The following is a summary of the real estate recording requirements, with regards to witness requirement on the recording of documents relating to real property.
State Witness Requirements (as determined by PROPERTY LOCATION) 2008
--------------------------------------------------------------------
CT - 2 witnesses on deeds of conveyance, one can be the notary (1 witness required on a mortgage)
FL - 2 witnesses, one may be the notary - DEEDS ONLY (F.S.A 695.03 & 689.01)
GA - 2 witnesses, one may be the notary (GA Code - Title 44 § 44-14-33)
LA - 2 witnesses, CANNOT be the notary
SC - 2 witnesses, one may be the notary
NOTES:
1) FL - Mortgages DO NOT require witnesses, DEEDS (QuitClaim, Warranty, etc.) do.
2) Lenders may require witnesses, even though there is no state requirement.
MN - Witnesses are not required on conveyances or mortgages executed in Minnesota. Minnesota Statute Section 386.39.
RI - Per Stewart Underwriting Manual, witnesses are not required on conveyance documents (deeds) nor mortgages.
TX - Per Stewart Underwriting Manual, witnesses are not required on conveyances or mortgages executed in Texas, unless the person signing does so by making a mark instead of signing.
VT - Witnesses are no longer required. 27 V.S.A. 341 Amended 2004
| Reply by Stamper_WI on 11/8/08 7:44am
Msg #269288
Re: The fact that it is GA property doesn't trigger the atty
Yes, we fulfilled the witness requirement. What bothered the borrower and me was that we we both told the attorney would be on the phone going over the documents while they signed. This was not the case
Thanks for all the input!
| Reply by Teresa/FL on 11/8/08 9:10am
Msg #269294
I did the seller side of the closing for a SC property last
week. Since SC is an attorney state, an attorney was on the phone with us during the closing. He traveled to the buyers' location and called us from there. I questioned the TC (in Ohio) regarding whether it was necessary for the attorney to be on the phone while we closed the seller docs in FL. They said it was required.
Does anyone have an opinion, legal or otherwise, about this situation?
| Reply by PAW on 11/8/08 9:19am
Msg #269295
Re: I did the seller side of the closing for a SC property last
As far as I've been told, SC **does** require an attorney to be on the phone with the buyer/borrower for any property physically located within SC, if the closing/signing is taking place outside of SC. If the closing/signing takes place within SC, the attorney must conduct the closing/signing, in person.
| Reply by Linda_H/FL on 11/8/08 9:32am
Msg #269298
But she did the seller side - not buyer/borrower side... n/m
| Reply by Teresa/FL on 11/8/08 5:36pm
Msg #269318
I just doesn't make sense to me.
How can SC state law apply to a transaction that is being closed outside the boundaries of that state? The Warranty Deed is signed by the sellers and recorded in SC, but all the other docs are just the standard title docs and are not recorded.
Why is this different than GA?
| Reply by GA/Atty on 11/8/08 5:42pm
Msg #269320
There is a form required to record an SC deed, I think,
that indicates that a SC attorney was involved in the closing process. Don't quote me on that but I think that is the case.
The GA requirement comes from a GA Supreme Court decision in which they stated that conducting a real estate closing constitutes the practice of law, and only attorneys are allowed to practice law. So non-attorneys who conduct loan signings in GA (regardless of where the subject property is) are by definition engaged in the Unauthorized Practice of Law (UPL), which is a crime.
| Reply by Teresa/FL on 11/8/08 6:24pm
Msg #269321
Re: There is a form required to record an SC deed, I think,
There was a "Deed Affidavit" included in the package , but it was signed by the seller only and did not require an attorney to sign or acknowledge it in any way, although the seller's signature had to be notarized.
There was another document in the package (Real Estate Closing Disclosure Form) that discussed the role of the attorney in the transaction and the fact that he did not represent the sellers. This form did not require the notarization of the sellers' signatures.
I just don't understand why I can conduct a loan closing in FL for a GA property without a GA lawyer on the phone, but the same is not true for a SC property. How can the SC laws apply to a transaction that is happening in FL yet the GA laws do not?
When I received the call for the assignment, I accepted it knowing that the plan was for an attorney to be on the phone. The process went pretty smoothly. I was hired for the job, did my part, and returned the executed documents to the TC.
Then the sellers called me a week later wondering where their funds were. I told them to contact both the attorney in SC and the TC in Ohio. They should have had their funds the day after the closing via wire transfer. I have no idea what happened...maybe issues with the buyer's loan funding...but the involvement of an attorney doesn't seem to have helped the sellers in this case.
| Reply by GA/Atty on 11/9/08 8:05am
Msg #269338
SC laws and GA laws are totally independent of each other n/m
| Reply by Teresa/FL on 11/9/08 10:19am
Msg #269340
Re: SC laws and GA laws are totally independent of each other
Of course they're independent of each other. I just find it interesting how two "attorney only" states treat the same type of transaction in different ways. Somewhat similar to the differences in notary laws from state to state.
| Reply by PAW on 11/9/08 7:19am
Msg #269337
Re: I just doesn't make sense to me.
All transfers of property, by SC law, must be certified by a licensed SC attorney. (I don't have the actual law or regulation handy, but the way it is worded, the SC attorney must have first hand knowledge of the transaction before the transaction can be certified. Therefore, the attorney must either be personally present or in audible communications during the transaction.)
| Reply by Teresa/FL on 11/9/08 10:14am
Msg #269339
So the transaction cannot be recorded unless it has been
certified by a SC attorney? I wonder if this would also apply to a refinance since there is no transfer of property?...unless SC is a Deed of Trust state instead of a Mortgage state.
It's really a moot point for me as I don't anticipate being involved in any SC property transactions anytime in the near future. Although it is interesting how two different "attorney only" states deal with the process. It appears the SC Bar Association had a different thought process regarding the whole transaction than did the GA Bar.
| Reply by GA/Atty on 11/9/08 4:17pm
Msg #269344
There is a transfer of property in a refinance; the transfer
of the security interest is why GA requires attorneys to close them.
| Reply by PAW on 11/9/08 8:15pm
Msg #269345
Re: So the transaction cannot be recorded unless it has been
This is the addedum information I have concerning SC from Stewart Underwriting:
" South Carolina is a traditional "Attorney State", which means that real estate closings are considered the practice of law. There are two preeminent decisions of the South Carolina Supreme Court which set forth with particularity the attorney's role in real estate transactions. In State v. Buyers Services Company, Inc., 292 S.C. 426, 357 S.E.2d 15 (1987), and Doe v. McMaster, 355 S.C. 306, 585 S.E.2d 773 (2003), oour Supreme Court enumerated the pertinent parts of a real estate transaction, whether refinance or purchase, that are defined as the practice of law in South Carolina. Although stated in slightly different language in the two cases, both hold that attorneys must perform the following functions relating to closings: (1) supervise the title search, title examination, and preparation of abstracts; (2) prepare or review loan documents; (3) supervise the closing and provide advice to the buyer; (4) record legal documents. To this list must be added a fifth function, the disbursement of funds, which was included as an action which must be supervised by a lawyer in a subsequent attorney disciplinary opinion. See In re Fortson, 361 S.C. 561, 606 S.E.2d 461 (2004).
"This case law mandates that all aspects of any closings involving South Carolina property must be controlled by an attorney licensed to practice law in the state. The attorney must certify title after examining the title work. The attorney must be listed as the "Settlement Agent" on the HUD-1 or HUD-1A, and must personally perform the actual closing. The attorney must record all documents required to be filed with the county and the proceeds of the transaction must be disbursed by the attorney. Mail-away closings are permissible, but even in these instances the attorney must exercise the same control over the transaction.
"The customary security instrument is the Mortgage. Two witnesses are required for mortgages executed within the state. Mortgages executed and acknowledged in accordance with the laws of another state will be accepted for recordation without two witnesses."
| Reply by GA/Atty on 11/8/08 5:31pm
Msg #269317
Most title companies and lenders probably require some
kind of attorney involvement, even though it isn't required under GA law when the borrowers are signing in another state.
And I am not sure about the South Carolina requirement, but I know I have had folks sign loan docs in my office while we had a SC attorney on the phone.
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