Posted by pat/WA on 4/12/09 1:46pm
Msg #284577
Big Debate
My husband and I are both signing notaries and we are having a debate.
He says we should present the documents to the borrower and then point,
That is say what the document title is and point where they are to sign.
I feel and I do point out the title of each document. But I do explain the DOT, TIL. NTC, HUD and the Note. I content that this has saved alot of logs because borrowers can be confused and refuse to sign.
We have agreed to abide by the suggestions from this forum
pat and buc
| Reply by GA/Atty on 4/12/09 2:00pm
Msg #284578
I think you should tell the borrowers what they are signing. n/m
| Reply by ME/NJ on 4/12/09 2:43pm
Msg #284585
Be careful what you say it may put you at risk
I've been coached by lawyers and just one word can get you in trouble "document means" big no no . You can read the document that is it. If they have a question they need to contact who ever they are working with or a lawyer if they feel the need for one.
By saying "means" it puts you at a huge risk.
| Reply by MikeC/NY on 4/12/09 11:45pm
Msg #284644
This is not exactly true...
"By saying "means" it puts you at a huge risk. "
You can tell them what a document "means"; you just can't tell them what a document "means to you". A professional should understand the difference and know where the boundaries are.
According to the ABA, there is a difference between explaining in general terms (facts that anyone can provide), and explaining in specific terms (interpretation of how these facts apply to their situation). The latter may be UPL; the former isn't. As long as you don't advise them or give them specific information that can be construed as advice, you're on the right side of the line.
If they ask you what APR "means", you should be familiar enough with the process to explain it to them in general terms. If and when they ask for specifics - which of their financing costs are included in the APR, for instance - you should defer the question to their LO or their attorney.
Or, alternatively, you can just name the document and point to where they're supposed to sign...
| Reply by Linda_H/FL on 4/12/09 2:08pm
Msg #284579
I'm not a "point and sign" notary...
I go through the documents....present the doc, state what it is then skim through it briefly with them...I don't do line by line reading but I don't just state the title and say "sign here"...especially the mortgage - I flip through each page pointing out each provision by reading the paragraph headings.
I don't interpret docs, don't explain why they are what they are, but I do go through it with them - always reminding them they have a copy and 3 days to read them in depth.
That's just me - my schedule isn't such that I can't afford that type of time and I'm at least satisfied my borrowers know what they signed.
| Reply by Linda_H/FL on 4/12/09 2:09pm
Msg #284580
Re: I'm not a "point and sign" notary...should add
I *DO* go line by line in any affidavit where they are swearing to the truth of the statements in the doc - I don't want them swearing to something they haven't read....MHO
| Reply by pat/WA on 4/12/09 2:32pm
Msg #284582
Re: I'm not a "point and sign" notary...should add
Well, He still does'nt agree. HIs says our position as a notary is to identify and witness the signatures not to explain the loan docs.
Can I get an opinion from Paw, Sylvia, Negretes,an attorney or any title company or signing service?
| Reply by Linda_H/FL on 4/12/09 2:38pm
Msg #284584
Re: I'm not a "point and sign" notary...should add
"our position as a notary is to identify and witness the signatures not to explain the loan docs"
Have to realize that when doing signings you're wearing two hats - that of the ntoary and that of the signing agent...and it's the signing agent portion that deals with the loan docs and whether to review them or not - it's not a notary function.
| Reply by Sylvia_FL on 4/12/09 2:48pm
Msg #284587
Re: I'm not a "point and sign" notary...should add
It is our job to identify and witness the signatures and not explain the loan docs. There is a difference between "identifying" and "explaining"
For example:
This is the note, here is the amount of the loan, here is your interest rate etc. If it is an ARM, you an point out that on this date this is what your interest rate will change to - again this is just pointing out and identifying key points in the document. This is not explaining the docs. But it is more than just identifying the title of the docs.
Whether acting as a notary or a signing agent, unless you are an attorney you cannot explain the docs.
| Reply by Marian_in_CA on 4/12/09 3:13pm
Msg #284591
Re: I'm not a "point and sign" notary...should add
I agree. We don't "explain" them at all.
However, I have been asked, multiple times, something like this, "Okay, but what exactly is a deed of trust?"
For those situations, I have a presentation folder that includes several documents I printed from government sources, like these:
http://www.ftc.gov/bc/edu/pubs/consumer/homes/zrea03.pdf
http://www.hud.gov/offices/hsg/ramh/res/sc3secta.cfm
This takes me out of the situation by giving them a recognized source of information without having to "explain" things. In that folder, I keep a couple of pages that list the URLS or places they can get the same information that I tell them to take one if they'd like.
| Reply by Marian_in_CA on 4/12/09 3:16pm
Msg #284593
Re: I'm not a "point and sign" notary...should add
I should add that I do that, not because i don't know the answer... (I do know what a DOT is!!) but because I don't want to give an appearance of advising them on anything.
| Reply by Linda_H/FL on 4/12/09 4:27pm
Msg #284600
I don't provide any more documents to the
borrowers than those provided in the closing package...IMHO adding your own "presentation folder", although very benign, may be construed as UPL.,...if the LO or lender wanted the borrowers to have copies of information from HUD they'd have provided it - IMO it's not up to us.
| Reply by Marian_in_CA on 4/12/09 9:17pm
Msg #284632
Re: I don't provide any more documents to the
well, I do agree that it's not up to us... but when I said "presentation folder" it's really just a cheap plastic report cover and the papers inside are just definitions and things from HUD and the FTC. Nothing in it comes from a private organization or is something they'd have to pay to get.
Obviously, when I present a DOT, for example, I do what Susan said below... give a brief description of the document. If they still have questions, I will point out the term in the folder and tell them that is a federal definition.
So as for a DOT, it says, "Deed of Trust: A legal document in which the borrower transfers the title to a third party (trustee) to hold as security for the lender. When the loan is paid in full, the trustee transfers title back to the borrower. If the borrower defaults on the loan the trustee will sell the property and pay the lender the mortgage debt."
I'm not going to say all that when presenting the document, but I will tell them that the DOT is a security instrument that is public record and is filed with the county clerk. If they still don't understand that's when I pull out my definitions, because beyond that, I don't want to find myself in the gray area of legal explanation vs. description. I make sure they know the source of what i'm showing them and where they can find it.
| Reply by Alice/MD on 4/12/09 5:08pm
Msg #284601
Re: I'm not a "point and sign" notary...should add
I agree with Sylvia. I don't explain the loan docs......I just point out certain pages in the docs to let them see if they agree with the terms and amounts agreed upon in their discussion with LO.
| Reply by Pat/IL on 4/12/09 3:00pm
Msg #284590
Re: I'm not a "point and sign" notary...should add
Pat, your husband is right IF you are only talking about general notarial acts. There are often higher expectations when you are also being paid as a signing agent. I would think a signing agent ought to be very familiar with the documents and their purpose. They should be able to provide a brief, accurate description of the contents of the documents.
At least be able to point out the essential information, such as the terms of the note. Most of the document descriptions can be given succinctly in about the time it takes the borowers to sign the document. Others, such as the HUD, I point out the fees section by section. Stick with the 'whats', but know the proper party to contact to explain the 'whys' to the borrower (this is over simplified, there are even ways to explain some 'whys' in general terms. But absolutely not when the 'why' is particular to the borrower's terms or fees).
Know the standards in your state, and know the boundaries of your role. Where I am located, I would expect nothing less than the above, performed expertly, when contracting with or hiring a person to conduct signings. The same expectations may not apply in other states, or from company to company within a state.
Pat Scott
OConnor Title
Chicago, IL
| Reply by MichiganAl on 4/12/09 6:58pm
Msg #284605
As others have said and maybe it's still not clear
It's the word "explain" that's really causing our concern. When we hear explain, we think of someone who is maybe saying more than they should. we don't interpret, we don't tell them anything that can't be shown to them in the documents.
Here is your interest rate, here's your first payment due date, here's your monthly payment, here's where it says there's no prepayment penalty, here are your mortgage fees, here's what's being paid off, here's the money you're getting back, here's your right to rescission, you still have until this date to cancel. I didn't explain, I showed them the terms.
Your husband wants to just point to the signature line? Then he clearly is "just a notary." Most of us here, we're signing agents. I'd love to work in his territory. I'd eat him alive. Every one of his companies would be working with me within a month.
| Reply by Susan Fischer on 4/12/09 4:19pm
Msg #284599
Agree with LindaH - big difference between 'explaining' and
"describing."
I.e., "This is the Deed of Trust - it gets filed with the country as a public record that there is a lien on a property." Not explianing, just a description.
Describe, not explain.
| Reply by MW/VA on 4/12/09 6:12pm
Msg #284602
Re: Agree with LindaH - big difference between 'explaining' and
I agree with this 100%. IMO there is too much literal interpretation of "explaining" the docs, and some notaries won't say a word. In our capacity as signing agents we do have the responsibility to review or describe docs to the borrower. UPL would be advising them as to whether this is a good loan for them, whether they paid too much in closing costs, whether or not they got a good rate. Part of the notary function is "willingness & awareness". In the capacity of NSA we need to do more than check ID & witness their signature. Beyond my one line description of each doc, I advise them to call the LO if they have any questions regarding the loan or any of the terms.
| Reply by John_NorCal on 4/12/09 6:59pm
Msg #284606
Re: Agree with LindaH - I agree too.....
I tell the borrowers what the purpose of the document is; i.e. this is the dot that secures your loan; this is your note that states your loan amount, the term and the interest rate, etc.
Any literal interpretations of any docs, I refer them to their loan officer, title company or whomever.
| Reply by Susan Fischer on 4/13/09 12:10am
Msg #284645
Well put; the purpose of the document, not the meaning. n/m
| Reply by Ardel Richter on 4/12/09 2:37pm
Msg #284583
I briefly go over the Primary Five (HUD, Note, TIL, 1st Payment Amt., RTC) and tell them 'this is an Aff. that you're swearing to, so you ought to read it'. Some do; some don't. I see no reason to dwell on the DOT/Mortgage. More to the point, I let them go over the HUD while I enter their IDs in my journal. If they have questions, fine. If not...move on to the other 4.
Once the main points are understood & agreed to, everything else goes pretty fast.
| Reply by Les_CO on 4/12/09 2:54pm
Msg #284589
It depends on the client, and if the LO shows up. If the LO shows I let them explain the loan docs, I explain the others. I did a re-fi for the Attorney General of CO…I said you probably know more about these documents than I do….but if you have any questions feel free to ask. If the people are familiar with the docs, I let them sign at their speed. If not, I explain.
| Reply by Todd/OH on 4/12/09 3:13pm
Msg #284592
I never allow a borrower to sign blindly. I go over the "critical 5" in some detail. I summarize the rest as we cover the package.
| Reply by Art_PA on 4/12/09 3:49pm
Msg #284595
Good Grief!! This is not a personal attack, and "you" means "the notary". You are not being paid by the word. The more you say, the more opportunity there is to confuse the borrower. You do not know how the transaction was explained by the lender or broker.
No reason why you should not identify the document, and I agree that it is a good practice to point out the loan rate & amount on the Note, and to step in to resolve any confusion about the numbers on the HUD (if you really understand it).
It may not have happened to to yet, but some day you will say something which will end the signing, or make it last much longer than necessary while the LO is contacted. The reason lenders often include an explanation of the TIL is because no human being can explain it. I have one of these forms to present when borrowers look at the TIL, but I would never try to explain it other than to point to the Note to confirm the correct interest rate.
A very good friend believed that he had an obligation to explain the documents and to go over the borrowers copies to show that they had copies of everything. He also complained that his signings took over an hour, and sometimes over 2 hours. Guess why.
Do not make this job out to be more than it is, which is to identify the borrowers and to be sure that everything is executed properly. You are not the borrowers friend, lawyer, or advisor, and you are not the representative of the lender charged with explaining the lender's documents.
This is a rare case in which the husband is right, and it should be reported to Ripley's or to the Guinness book of World Records.
| Reply by NCLisa on 4/12/09 7:36pm
Msg #284609
I can give a brief description of every doc in a CW loan package that the BO signs, plus go over the hud. And I do know what each and every line on the hud is and what the TIL is. My average closing lasts between 25 to 45 minutes.
| Reply by MistarellaFL on 4/12/09 7:46pm
Msg #284612
Ditto what Lisa wrote
The clientele I have expect me to know what I am doing, and best explain as if I were working directly in their office. UPL? No way. I don't give advice, and I don't interpret the docs.
But, my client's expect that I can "explain" what the NOA dues are on line 1306, and expect me to "explain" that the amount on line 204 is a credit, when they (the brw or buyer) believe it to be an additional charge. I don't think either type "explanation" ventures into the practice of law.
I am working as an extension of the TC, and should be able to answer most anything THEY can
| Reply by JanetK_CA on 4/12/09 8:16pm
Msg #284618
Re: Ditto what Lisa and Misty wrote
Yeah, I agree, too (although my signings usually last longer than that, what with journal entries, notary cert's, etc.). I'm finding that people I meet with seem to mostly fall into three categories lately. The first includes people who are well informed, know how to read a HUD, etc. The second group are people who are kind of new to this - or didn't pay attention the last time (or two or three times) they did this, and are scared of being taken. And the third are those who fall in-between. Naturally, the first group are no-sweat, easy. But the others - unless they've had a chance to see the docs in advance, which rarely happens, expect someone to be able to walk them through what they are signing.
This doesn't require answering detailed, specific questions about their loan but it does require being able to know where in the document the answer can be shown. I can think of numerous occasions when a signing would not have been completed if I was just a "point and sign" notary. Personally, if I didn't know what I know now about loan docs, I would likely be one of them if I was signing loan papers with someone like that. [Don't be shoving any document in my face and expect me to just sign away!!  ]
The key here is knowing where to draw the line, and what is - and is not - appropriate for us to say and when to call the LO. I tell people right up front that I'm going to start out by first showing them all the key terms of their loan to find out if they have any issues or questions that would require them to contact their LO. (Not in those exact words.) It really puts people at ease. Sometimes the change in demeanor is clearly noticeable, so it's obvious that they were worried about having to sign things they didn't understand or didn't have time to read. And sometimes they thank me for it at the end. But if they are savvy or in a hurry and just want a point-and-sign notary, that's what they get.
| Reply by CaliNotary on 4/13/09 11:16am
Msg #284691
Re: Ditto what Lisa and Misty wrote
"although my signings usually last longer than that, what with journal entries, notary cert's, etc."
You do realize that the rest of us have journal entries and notary certs too?
| Reply by NCLisa on 4/13/09 4:28pm
Msg #284745
Re: Ditto what Lisa and Misty wrote
I fill out the journal as they are filling out their info aff or looking at the hud, I fill out the other info docs while they are signing the journal. I fill out the acks while they are signing the doc before it, then stamp/sign while they sign another doc. I keep things moving right along, and if they want to chat, they have to sign and chat at the same time. If I need a copy of their DL, I've got my little Pandigital photo scanner, and that only takes about 60 seconds while they are signing. Again, I just keep things moving.
| Reply by Linda Juenger on 4/12/09 8:30pm
Msg #284622
Re: Ditto what Lisa wrote
I can't imagine doing a point and sign loan. It is too important to do that. One of the docs that I spend a lot of time on is the Escrow disclosure. In my home county, our taxes are paid in 2 installments (June and Sept) and we are also paying a year behind. So the taxes we will pay this coming June are for 2008 not 2009. Some borrowers do not undertand this or even know this. Occasionally I will see on the escrow discloure that taxes are set to be paid in a different month and sometimes this will cause the borrower to not have enough money in escrow to pay them. I wish I had a nickle for every time I have caught this. This will cause their payment to rise immediately. These next couple months are sticklers for me and escrow accounts. Borrowers are confused on which loan is paying their taxes, the old one or the new one. Although I can't answer that question (cause I don't know), I advise them to immediately call and find out, if not at the table, the first thing the next morning. This stuff is too important for them to have someone just say sign here. I can't imagine doing that. My .02 worth. A good notary will watch for things like this and know enough to ask the borrowers if thier tax amts are within reason for their property and due dates.
| Reply by JanetK_CA on 4/12/09 8:49pm
Msg #284625
Re: Ditto what Lisa wrote
Great example. Here, the second half 2008 taxes are due in April and nearly always are included on the settlement statement if proof of payment hasn't been provided - even if they escrow property taxes and insurance. People tend to look at the bottom line on the settlement statement/HUD and freak out at what they think are their closing costs. That, and the pro-rated interest charges included, are one of the key elements that could cause a signing to adjourn if the notary didn't walk them through the details. This doesn't require interpretation, it's just showing them facts. I also go over impound/escrow docs up front, if applicable.
| Reply by Susan Fischer on 4/13/09 1:50am
Msg #284650
Au contraire, mon ami. " explanation of the TIL is because
no human being can explain it." I have this down to a few simple words:
"This is the Truth in Lending form - a federal disclosure, if your will. The amount financed, generated by adding/subtracting some fees to the amount on the Note, over the life of the loan, and expressed as a percentage is the APR. The difference between the APR and your interest rate are the fees. The closer your interest rate is to the APR, the lower your fees relative to the life of your loan. It's designed to show you how much it is costing you to borrow the money."
Lots of 'thank yous' for a short and sweet definition. Not an explaination.
| Reply by Gary_CA on 4/13/09 7:25am
Msg #284656
Yep I do something similar.
I usually take a few minutes with the TIL... and I've got a script (well not quite a script, but almost)
"Okay, your note says 4.5% interest but the federal law requires that they tell you your "true cost of money" it says 4.62% here... but you're interest didn't go up. See here it says "amount loaned" is $172,064 but the loan is for $180,000. That other eight grand is money you're borrowing but instead of going to you it goes to the bank... it's the point you paid and all that crapola we went over at the beginning."
So for the truth in lending they take that eight grand and divide it up over the 30 years and add that cost to your interest rate. You're still paying 4.5% but including the eight grand your total cost of money is 4.62%.
It takes longer to write than say, but everyone has always understood. And always grateful for the description, or whatever the hell you want to call it that is being helpful but definitely not being a lawyer.
| Reply by jnew on 4/12/09 9:23pm
Msg #284633
I have seen outlandish fees on Hud Ones, but they are none of my business. I am not there to protect the borrower from the lender. With the RTC they have enough time to go over the terms of their loan with the lender. I think that I will explain the technical part of a document only to the point needed to make them agreeable to sign it. The two best practices are to follow the written instructions to the letter and offer as little explanation as necessary to fulfill the instructions. I think a lot of signing agents (myself included) learned the documents by watching attorneys explain the documents to their clients. I think there is a gray area between explaining a document and presenting information as a closing expert. If you present information which the borrowers believe to be from a closing expert, you could be liable for damages. This would be an extreme example. I think most of the good signing agents know how much information to present and use common sense.
| Reply by trnsa_IL on 4/13/09 12:01pm
Msg #284704
Pat and Buc,
As a notary you are to identify, confirm willingness, and witness signatures on documents.
As a loan signing agent you need to be able to present the documents in a way that the borrower will know if they agree what they are signing or not.
I do "point" to the documents, but it is to point out things like:
This is the Note,
This is the ...
(point)...Loan amount
(point)...Interest Rate
(point)...1st Payment date
(point)...Final Maturity date
(point)...Principal & Interest Payment
(point)...Grace Period
(point)...Signature Line
Although I do "point" to the documents, I am definitely not a "point and sign" notary. I have had many borrowers state that I made the signing easy or painless. And that was just because I showed them what their documents stated. Most borrowers do not know where to look for this info themselves, but they do want to know what the terms of their loan are before they sign. No matter how informed their LO may have kept them, most people want to see it in black and white.
If someone asked you if their loan had a prepayment penalty, you should be able to turn to the correct document and "point" to the wording that states one way or the other. If they still have questions then they can call their LO.
Good Luck and God Bless,
Tonya
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