Posted by GOLDGIRL/CA on 11/2/09 8:01pm
Msg #309600
RTC Question
Where is it written in Regulation Z (if it's there at all) that the borrower has to fill in the RTC dates if they're not preprinted already from the lender? For years I wrote in the dates myself (except on Provident loans) - but now it seems that instructions accompanying RTCs all say the borrower has to fill in dates.
No borrower is going to know how to correctly complete an RTC - (uness they sit there and actually read the whole page, gawd forbid) - without guidance from the notary - and if the notary is telling the borrower what dates to fill in, then what's the point of having the dates in the borrower's handwriting .... ? Is this just the lender covering his you-know-what, so that in case of a dispute they can tell the borrower: "Well, you wrote in the dates, you should know, blah, blah blah." Then, of course, the borrower could say: "Well, the notary told me what to write."
| Reply by Jack/AL on 11/2/09 8:22pm
Msg #309602
The only place I've ween it written was in the instructions from a few lenders, lately. You may have correcty guessed why they're doing it that way. I've not yet had one without the dates already inserted, meaning the doc prep folks are doing their jobs.
| Reply by Marian_in_CA on 11/2/09 8:35pm
Msg #309605
I would NEVER want to be put in the position of the borrower having to say, "Well, the notary said..."
A lot of notaries struggle calculating the RTC, so it's not exactly fair to make borrowers calculate it. Explain it? Sure... I've done that many times explaining holidays and Saturdays, etc.
That said... I think that the lenders could get in to trouble for this:
The RegZ text below clearly says that the creditor shall deliver the notice that contains the date the rescission period expires. If you take this literally... that means that the notary probably shouldn't be writing it in, either. But definitely, the borrower shouldn't have to.
Link: http://www.fdic.gov/regulations/laws/rules/6500-1700.html#fdic6500226.23
===========
Sec. 226.23
(b)(1) Notice of right to rescind. In a transaction subject to rescission, a creditor shall deliver two copies of the notice of the right to rescind to each consumer entitled to rescind (one copy to each if the notice is delivered in electronic form in accordance with the consumer consent and other applicable provisions of the E-Sign Act). The notice shall be on a separate document that identifies the transaction and shall clearly and conspicuously disclose the following:
(i) The retention or acquisition of a security interest in the consumer's principal dwelling.
(ii) The consumer's right to rescind the transaction.
(iii) How to exercise the right to rescind, with a form for that purpose, designating the address of the creditor's place of business.
(iv) The effects of rescission, as described in paragraph (d) of this section.
(v) The date the rescission period expires.
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| Reply by PAW on 11/2/09 8:45pm
Msg #309608
You're right in that the dates are supposed to be provided by the lender to the borrower. That is one reason why the borrower should write in the dates as directed by the lender, not the notary. However, there is an implied agent connection between the lender and title, as well as the signing agent, wherein the signing agent can be directed to act on the lender's behalf (as their agent) to complete the necessary dates on the form. The "agent" connection arises out of "special skills and knowledge" not usually found in the general public, plus the direction, either explicit or implicit, to complete the RTC dates.
| Reply by Marian_in_CA on 11/2/09 9:22pm
Msg #309610
Oh, I totally agree there... but sometimes it's hard walk that fine line of notary not committing UPL and agent acting with specialized knowledge on the behalf of a client.
For example, here in CA... notaries are not allowed to "enter data provided by a client" on immigration forms at ALL unless they are a qualified and bonded immigration consultant. We can notarize the forms as needed, but we can't help them with the documents at all.
Personally, I'm comfortable filling in dates myself, while I explain to the borrowers so they know what we're doing as an "object lesson" of sorts. Actually... I'm not to thrilled about having to fill them in myself, because I see no reason why the creditor can't do it themselves on their own disclosure.
I'm not too keen on telling the borrowers that they have to do it and then telling them how. That, to me, seems like crossing the line and advising them on legal matters. Not to mention the fact that... if you get super, duper technical -- an incomplete Rescission disclosure is a violation of RegZ and, therefore could, theoretically, put the entire contract at risk. Not that I'd tell a borrower that, of course.
Super fine line there...
| Reply by MikeC/NY on 11/2/09 10:54pm
Msg #309617
It's not UPL at all... n/m
| Reply by MikeC/NY on 11/2/09 11:12pm
Msg #309618
It's not UPL at all
Sorry for the double clutch above...
There is no fine line to be walked here - what applies to immigration forms in CA has nothing to do with loan documents. You're comparing apples and oranges....
The date of the signing is a fact; the date of 3 business days after that is also a fact (although some here seem to have a tough time counting to 3...). Where's the UPL?
Unless the lender specifies that they want the borrower to fill in the dates, it really doesn't matter WHO fills them in. And even if the borrower is supposed to fill them in, there is nothing wrong with the notary saying "today's date goes here, and 3 business days from today is X, so that's what's goes there." Where's the UPL???? You need to be an attorney to count to 3? The only possible problem is if the notary counts wrong...
Sometimes we can overthink things, and this appears to be one of those times.
| Reply by Marian_in_CA on 11/2/09 11:25pm
Msg #309619
Re: It's not UPL at all
The only reason I say that is because the lender is SUPPOSED to provide them this information, not ask the borrower to compute it themselves.
And, as mentioned, it seems more and more lenders are specifically noting that the borrower is supposed to write in the dates themselves.
I was just using the immigration forms as an example of things we can do vs. things we should/shouldn't do. (In CA) We're not allowed to fill out an immigration form at the client's direction or with information the client provides UNLESS we're a bonded consultant. There's no real advice being given in that instance...just filling out forms.
What I'm saying is that there is some precedent there for some notaries, such as in CA, to be careful in how they word things when they do explain the rescission concept. Not they they shouldn't... but that they're careful because the worst thing that could happen is to get it wrong and have the borrower say, "Well, the notary told me the date..."
To me, there's a big difference between writing in the dates ourselves as an agent for the creditor and instructing the borrower to fill out a disclosure that, legally, they really shouldn't be filling out in the first place.
| Reply by Marian_in_CA on 11/2/09 11:37pm
Msg #309621
Another thought to consider...
The 3 day period is the minimum, right? The creditor can always give them more time if they wish. What if the borrower writes in the dates and gives themselves 7 days, for example... and the borrower rescinds on day 6?
Can the creditor then come back and say, "Hey, we're not going to honor that because you wrote in the wrong date!"
The borrower can then claim, "Oh, yes you will. You were supposed to provide me that form with the expiration date listed and since you didn't, this whole deal is void anyway."
I know that's an extreme example, and I'm not sure why a borrower would even do that... but it's a 'what-if' that I could see happening, and I think it's really irresponsible of a creditor to demand this of a borrower.
The RTC forms are a disclosure and it is the duty of the lender to prepare and present them properly. Asking to the borrower to prepare part of their own disclosure just doesn't make sense.
| Reply by Shoshana/AZ on 11/2/09 10:33pm
Msg #309616
KISS
I think there are sometimes when we overanalyze things. This may be one of those times. Unless otherwise directed, I always complete the RTC dates while explaining to the borrower. It's too complicated to explain to the borrower as to how they should date. As you all well know, they can mess up even the simplest of directions on that form. You show them where to sign and they still sign in the wrong place!
Just Keep It Simple Sweetie!
| Reply by JanetK_CA on 11/3/09 1:46am
Msg #309624
Re: KISS
In this case, I agree with the over analyzing. As a general rule, I don't like to write anything on any document - if I can help it - beyond the notary certificate. As for the dates not being filled it, some packages are not date sensitive, so they may figure that they don't know exactly when the docs will be signed. Also, how often do we see incorrect dates on the RTC? It seems to be less common lately, but not unheard of.
I usually go over the RTC pretty thoroughly, calculating the dates with the borrowers as they write them in. It's only rarely that I run into someone who has a problem with that, although I watch them carefully and try to always make sure there are enough copies. For example, with Provident packages, I make sure I have an extra lender copy in addition to the borrowers', just in case. As for signing in the wrong place, I usually make a joke out it, which helps - most of the time. Also, we're not notarizing this document, so I don't see a problem with spelling it out for them.
One thing I WON'T do, though, is explain to them in detail how to cancel. I just tell them to read the document carefully for instructions. I definitely don't want to get into the middle of that issue.
| Reply by Marian_in_CA on 11/3/09 2:39am
Msg #309627
Re: KISS
I really wish that they would revise that form. It's so not user-friendly, and I always feel like a babysitter of sorts when I have to point out where NOT to sign. It's just so counter intuitive.
Why can't they just have a simple disclosure with direct instruction that say something like this at the end of the disclosure:
================================
If you wish to exercise your right to rescind this loan by the expiration date and time please do the following:
1. Write or type a letter that clearly indicates your intent to cancel the loan.
2. Sign and date the letter.
3. You may SEND your letter by postal mail or telegram no later than the date and time indicated above. If you send your letter in any other fashion, the letter must ARRIVE no later than the date/time indicated.
You may notify the lender at:
ACME Lending Services
1234 Main St. Suite 401
Samplton, NY 10025
Fax: 000-000-0000
PDF attachment via email to: [e-mail address]
=================================
If the borrower can't follow instructions that simple, well... well... I would possibly wonder if they were literate enough to enter in a contract to begin with.
The RTC form is the perfect example of over thinking, ironically enough. They try to make it so simple that it defeats the purpose.
| Reply by MW/VA on 11/3/09 9:32am
Msg #309643
If the RTC dates are written in or corrected, I have the borrowers initial. That's it.
| Reply by Dave_CA on 11/3/09 9:49am
Msg #309646
What works for me
I fill in one of the borrowers copies as an example and then have them fill in and sign the other copies. I started doing this because of Provident but have just made it my SOP.
| Reply by JanetK_CA on 11/4/09 5:57pm
Msg #309866
Re: What works for me
That sounds like a great idea, Dave. Although I think that I'd prefer to do that on an extra copy, then take it with me on the very long shot chance that if they end up wanting to cancel, I wouldn't want them to pull out a page in my handwriting. Sounds like that might be a time saver, depending on the individual.
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