Posted by LynnNC on 1/15/09 12:31pm
Msg #274544

I was "fired" by a SS

I had a call this AM to handle a VA streamline tonight. The confirmation said to not call the borrower until after I printed the docs. I printed out the title docs and looked at the HUD. The loan was for $323,297 with $14,128.75 in settlement charges, including $3,196.59 origination fee, $4,427.47 discount points, and $1,608.44 VA funding fee. A red flag went up in my mind because of the number of high cost loans that have not closed in the past.

I called the SS and said that I wanted to confirm with the borrower and tell him to make sure that he knew the final terms of his loan before the appointment and before I printed the rest of the docs. The owner of the SS got real huffy and said that I, as the notary, could not go over the terms with the borrower. I told him that I didn't intend to, but, I didn't want to drive 50 minutes each way and not have the borrower sign.

The owner said that he would find another notary.

I am curious if other NSAs ever tell borrowers to find out the final terms before the closing appointment.

Reply by pan/nd on 1/15/09 12:47pm
Msg #274547

Given the same set of circumstances, I would have done what you did.

In fact, I have encountered similar circumstances in the past...have called (because of distance involved)...and had the borrower say....NO WAY.

Had about a dozen or so of those over the last year....and in only one case did borrower say OK.

Not everyone agrees with this however....but they're all entitled to my opinion.

Reply by jojo_MN on 1/15/09 12:59pm
Msg #274551

Whether or not this is a bad loan, is not your place to decide. You don't know their circumstances. Maybe they are going from a 7%+ interest rate down to 5 (example). There are many variables: What os their credit score? How long will it take to pay off the finance charges? Most likely, they will be paying them off in the first year, then saving thousands of $$ every year.

Most originators charge at least 1%. The VA funding fee is a fixed rate.

If the loans are high cost, the lender has to by law disclose that to the customer. There are only certain circumstances that they are allowed. The VA also has to approve the loan.

Once again, it really isn't your place to make that decision. The borrowers DO have a three day right to cancel.

I also wouldn't want a notary to be

Reply by jojo_MN on 1/15/09 1:01pm
Msg #274552

sorry pressed "send" too quickly

I also wouldn't want a notary trying to decide if a loan is or isn't a good one and possibly ruining a borrower's chance to get out of a bad circumstance.

Reply by snoopdogMs on 1/15/09 1:20pm
Msg #274559

As notaries we are privy

to borrowers financial info, but not our decision to alarm the borrower because of rates or figures. There have been times that I have bristled at such in documents, but I understand my boundaries and duties as a notary. The better question (since you were so alarmed) may have been to ask what their no sign policy is and then either cancel or go if you agree on their fee. I would never discuss a borrowers figures with anyone but my cats.

Reply by CaliNotary on 1/15/09 1:38pm
Msg #274563

Re: As notaries we are privy

"The better question (since you were so alarmed) may have been to ask what their no sign policy is and then either cancel or go if you agree on their fee."

Exactly. I would have just told them that I needed them to guarantee in writing that I'd be paid my full fee if they refused to sign. As long as they're willing to do that, who cares if the borrower signs or not?

Reply by LynnNC on 1/15/09 1:51pm
Msg #274567

CaliNotary - I should have done as you suggest!

That would have been a much better way to handle the situation.

I guess that I fumbled in this instance!

Reply by ReneeK_MI on 1/16/09 7:07am
Msg #274631

Lynn, you're a class act! =)

Sometimes we're the teacher and sometimes we're the student - in this instance, you were BOTH. You learned how you might've used a different way to handle it - and you taught us all a huge lesson in maturity and humility with three little sentences.

I'm impressed, and just had to say so. =)

Reply by LynnNC on 1/16/09 9:25am
Msg #274650

Thanks, Renee! n/m

Reply by Teddog/CO on 1/16/09 8:30am
Msg #274637

Re: As notaries we are privy

Have to agree with you. There are 101 reasons why people take out loans. Just make sure you are going to get paid for your work in writing.

Reply by Linda_H/FL on 1/15/09 1:03pm
Msg #274554

I don't print until I've confirmed with borrowers...unless I have a confirmed fee in writing for no-signs and rescissions - and, in this case, printing if I never leave my house.

I also don't read the HUD prior to signing - the only thing I look for is whether I have to collect a check, in which case I can let borrowers know on the phone that they need to have a check for me. The rest of the HUD is not my business....at the table I show them "this column itemizes the costs associated with your loan" "these are your payoffs" "here's your loan amount" "here's <<amount due you>> or <<amount I need to collect in a cashier's check>>...

I don't tell borrowers to find out final terms - the phone call is pretty telling - they're usually good to go, but if they have a lot of questions for me, or appear unsure of what the final loan product looks like, I refer them to their loan officer and make sure they have my number to call me if they choose to cancel or postpone...but I let them know I'll be there at whatever time.

Reply by JanetLA on 1/15/09 1:25pm
Msg #274561

In my opinion you should NEVER discuss loan terms on the

telephone. How do you know who you are speaking to? I think that even in Louisiana where we have some broad powers and different rules that is stepping over the line. I think you should be able to identify a person before disclosing anything. Not possible over the telephone...

Reply by LynnNC on 1/15/09 1:34pm
Msg #274562

I was not going to discuss the loan terms...

...I just wanted to make sure the borrower knew them before I made the trip.

Based on the posts responding to my original one, the majority of you would not have done so.

I guess I blew it!

Reply by SReis on 1/15/09 1:51pm
Msg #274568

I don't think you blew it....

I don't really check out all the figures & such on the HUD but when I do notice that there are large amts of cash needed to close I def make sure that borrower is aware before I head out, esp. if the travel is extensive. Unfortunately, if all LO's were upfront about everything then we really wouldn't have to worry about these things.

Also, the SS policy on not calling until all docs are printed seems a bit strange to me. There have been plenty of times I have contacted borrowers & they had NO idea that they were even closing that day. Many co.'s say don't print until you confirm, which makes a lot more sense.

Reply by LynnNC on 1/15/09 1:56pm
Msg #274572

I don't usually check out the figures on the HUD...

...except to see if the borrower needs to bring cash. In this instance, the settlement charges of $14,128.75 on a $323,297 loan caught my attention.

Reply by parkerc/ME on 1/15/09 2:13pm
Msg #274574

Re: In my opinion you should NEVER discuss loan terms on the

It's not our place to discuss loan terms at all. We are not lenders, we are not title companies. We're to just do our jobs: make sure the RTC, Mortgage/Deed, Note, and HUD are there, to confirm that the BOs are aware of any stipulations they need to have ready for us, and when there, positively ID them, point to what each document is, and witness their signing.

Reply by LynnNC on 1/15/09 2:37pm
Msg #274576

I was NOT going to discuss the loan terms...

...I was going to suggest to the borrower that he check with the lender to know the final terms before the closing. Settlement charges of $14,128.75 on a $323,297 loan with only $383.95 cash out threw up a red flag to me that the loan might not close. Obviously, I didn't know the borrower's circumstances, but, I felt wary.

After reading the responses to my initial post, the best way to have handled it was to make sure I received my full fee in the event of a no-sign, and leave it at that.

Reply by MW/VA on 1/15/09 4:29pm
Msg #274582

I also have some companies that won't allow me to contact the borrower. Since I normally will never do that, they say they will pay full fee if it doesn't sign. Again, don't make the terms or costs of the loan your business. You might find yourself in much deeper trouble than being "fired" by the ss. Expressing your concerns to the borrower about the costs would definitely be UPL. I've had some of those that didn't close for that reason, but it was the borrowers decision entirely, and I didn't "lead" them in any way in making that decision.

I had a situation last week. I was called to do a closing that they said they had to pull another notary from. The person was accused of saying to the borrower that they had 3 days to cancel (they said this when they were confirming the appointment). I guess this person tries to "insure" a completed signing by saying, "even after you have signed the paperwork you will have three days to cancel". At any rate, coincidentally, he received a call from another company right after that. He/she was implicated as introducing another lender.
It turns out that wasn't the case. The borrower admitted he lied & had used it to do a little more shopping. When he realized the serious trouble the notary was in he fessed up.
I was glad to hear it got straighted out & the notary wasn't reported to the SOS for misconduct. We need to be careful of what we say, because the borrower can misconstrue the remark.

Reply by LynnNC on 1/15/09 4:44pm
Msg #274585

I did not plan to discuss the HUD with the borrower, nor show concern, but, suggest that he know the final terms before the closing. IMO, all borrowers should know the final tems before the closing, including costs, funds owed or disbursed.

Reply by Maureen_nh on 1/15/09 4:59pm
Msg #274589

Actually, the law says that the borrower is to see the HUD 24 hours before closing. Perhaps yours did.
I do not need to comment about how well this regulation is observed to this group.

Reply by LynnNC on 1/15/09 5:52pm
Msg #274595

Interestingly, I have a closing tomorrow AM where I could not contact the borrower before 6:30 PM tonight as they had to review the HUD with her.

Reply by MW/VA on 1/15/09 6:02pm
Msg #274599

Yes, the LO is supposed to go over the HUD with the borrowers.

Reply by LynnNC on 1/15/09 6:12pm
Msg #274600

The bottom line is, I believe...

... that a borrower should know the final terms of the loan, including figures on the HUD, before closing.

Reply by Les_CO on 1/15/09 7:09pm
Msg #274605

Re: The bottom line is, I believe...

The only time I ‘discuss’ terms, is when the borrower has to come up with money at the closing. I always ask if they know they need to bring a cashier’s check (usually) for x dollars made payable to the Title Company. Is a case like yours where the borrower is getting ripped. I say: “Have you spoken with your Loan Officer today”? Just as a note it is CO Law that the borrower has his figures to review 24 hours before he signs the docs. I’ve never see it happen. Although I have seen forms they sign waving that right.

Reply by Pat/IL on 1/15/09 7:44pm
Msg #274606

"Actually, the law says that the borrower is to see the HUD 24 hours before closing."

Unless you are refering to the laws of your state, it's not quite that simple. It's simple, but not that simple. Note, in the below quote from RESPA Title 12, the phrases "Upon the request of the borrower" and "which are known to such person during such preceding day"

"Upon the request of the borrower to inspect the
form prescribed under this section during the business day immediately
preceding the day of settlement, the person who will conduct the
settlement shall permit the borrower to inspect those items which are
known to such person during such preceding day."

Reply by ReneeK_MI on 1/16/09 7:11am
Msg #274632

Excellent & rather crucial point, Pat!

Borrowers have the right to request the Hud, and the right to inspect items that are available the day before. Generally ... the complete Hud is NOT available, and THAT is not breaking any kind of law.

The borrower would still have the RIGHT to refuse to close until the Hud IS complete and available - and I do hate that so little responsibility is usually seen as the borrower's.

Reply by BrendaTx on 1/16/09 5:50am
Msg #274629

*I did not plan to discuss the HUD with the borrower...**

I wonder how many times you are going to have to say this before it sinks in. I got it the first time around.

Reply by LynnNC on 1/16/09 9:21am
Msg #274647

Apparently I had to say it about five times!

Reply by Sir_Lawrence on 1/16/09 11:55am
Msg #274695

So let me get this straight....I did not plan to discuss the HUD with the borrower... means you did not plan to discuss the HUD with the borrower OR...you did not plan to discuss the HUD with the borrower. I probably would not have planned to discuss the HUD with the borrower.
You probably should not have planned to discuss the HUD with the borrower, unless you did not plan to discuss the HUD with the borrower. It's FRIDAY.......looks to be around beer-thirty.....life is good.

Reply by Jeffrey Holman on 1/15/09 7:48pm
Msg #274608

"You have 3 days to cancel"

Hmm, one of the first docs I always show to a bwr is the RTC and I tell them them that they have 3 days to review the docs before the loan becomes final. I usually point to the RTC and show them the verbiage that says that. I do this to put them at ease due to the fact that I am a stranger showing up at their door asking them to sign this mound of paperwork for a loan. Is anyone suggesting that we should NOT do this? I feel that it is completely within my rights (and completely legal) to point out their legal rights to review the docs during the 3 day rescission period. I'd like to know other's thoughts on this. I understand that we cannot and should not discuss terms of the loans and/or whether the fees are too high, but I feel that we are completely within our rights to point our the bwr's legal rights as presented in the docs.

Reply by Susan Fischer on 1/15/09 8:30pm
Msg #274611

Completely agree, Jeffrey. "It says right here that federal

law gives borrowers three business days to consider this decision...You have until midnight of The Date to sign *here*, date*here*, and follow *these* instructions to cancel this loan." Or something like that.

For me, it's an obligation to make sure borrowers understand this protection.

Reply by parkerc/ME on 1/15/09 9:47pm
Msg #274613

Re: "You have 3 days to cancel"

Absolutely agree with you, Jeff. And the RTC is among the first of the docs I have them sign, the HUD being first.

Reply by ReneeK_MI on 1/16/09 7:17am
Msg #274633

Careful here ... RTC is specifically NOT for reviewing ...

the RTC is designed & intended under the TILA as "a cooling off period", and is not supposed to be presented as the proper time to go over or review loan terms before it's "final", or to see if you have any intention of accepting the loan.

Saying the RTC is "...to review the docs before the loan becomes final" is, IMHO another dangerous statement, is also providing an interpretation of a legal contract that you might not be qualified to interpret.

Do a read-through on the TILA and choose words carefully. =)

Reply by Susan Fischer on 1/15/09 10:04pm
Msg #274614

To back you up, just today I tried to complete a RESPA, lots

of miles North. No cash out, just a simple refi for a point lower interest. Veteran status. She was assured her closing costs would be two grand.

The first thing I showed her was the good faith est, and shaking her head, put down her pen. I suggest she call the LO. After a while of listening to him, she said, "Well then, there was a serious misunderstanding. This is not acceptable, I will not sign, and I decline your offer." There were a few more exchanges, and she suddenly held out the phone and said, "He hung up on me." My jaw dropped. She said, "He sounds so young."

Then she said, "Do you even get paid now?"

I shrugged. Said not to worry about that. She brought out her notes, and offered contact numbers, names, and said, "Here you go, hope it helps." And grinned.

This is not the first time a sleasy LO has lied to a borrower, by far.

I'm going all out to collect my full fee for this assignment, by crackie. It seems to me that these LOs are like their realtor counterparts - and have to pay as they play - for advertising, showings; preliminary signings, and iffy "final" docs. It's the LO's cost of doing business. I'm not assuming that risk.

There are familiar bad actors resurfacing (dah dunt-dah dunt) with terribly patriotic names, fueled by the Wall St Bail Out (or as it will be remembered, "What daddy did to end up in prison..." Shady shenanagans are back, dammit. And being stiffed for these jerks *again* is not acceptable. Especially on the occasion when we are instructed "not to contact the person, just show up on time." Big red flag. Doors slammed in faces...and no pay to boot? Pfft.

How hard is it for the LO to email/fax/snail mail the GFE to the borrower, and start from there?

My motto is "Your borrowers are my neighbors." I live by that.

Reply by Leon_CO on 1/16/09 3:09am
Msg #274626

Re: To back you up, just today I tried to complete a RESPA, lots

>> The first thing I showed her was the good faith est, and shaking her head, put down her pen. <<
--------------------------------------------------
I have been doing a lot of RESPAs, and I have been getting the same thing. They look at the GFE and start to balk. I also show it first, although I have been getting packages where it was put on the bottom.

I haven't had any no-signs, but there have been a lot of close calls. The last one I did the LO told the borrower he could line through one of the items on the GFE. That was the only way he was going to sign.

Reply by thnotary_NY on 1/16/09 1:39pm
Msg #274726

The HUD is one of the first three (HUE,RTR,TIL) I show before the others.