Posted by docs1954CA on 10/20/09 6:19pm
Msg #307986

Interesting reading regarding the old backdating issue

Never Buckle under Pressure

When a loan package was returned from a Company approved mobile notary, the escrow officer began to review it to ensure the documents were executed properly, when she noticed the documents were back-dated. She contacted the notary who admitted she buckled under the pressure of the mortgage broker and allowed the documents to be back-dated by the borrower, in her presence, and notarized them as such. Sadly, the unacceptable notary conduct didn't stop there.

The back-dating of documents has never been an acceptable practice. Sharron K. Burgum from Ticor Title Insurance Company in Portland, Ore. certainly understands this. Sharron scheduled a signing through one of our approved notary companies, Flex Closing Corp. The signing was scheduled for the evening of Wednesday, August 26, 2009, the last day the documents could be signed in order for the funding to occur on the last day of the month.

The documents were e-mailed to the notary too late for her to make the scheduled 6:30pm appointment. She immediately called the borrowers to inform them she needed time to print the documents and the appointment was rescheduled for 8:00pm. On her way to the signing the borrowers called to say it was too late, they wanted to re-schedule their signing for the next morning. The notary's company informed Sharron.

When the mortgage broker found out the borrowers did not sign, he was furious. He made arrangements to attend the signing in the morning. At the signing he pressured the borrowers and the notary to date the documents as if they were signed the previous day. After the documents were all signed and notarized he offered to hand deliver the documents to Sharron.

Upon receipt of the loan documents Sharron began to review them to ensure they were executed properly, that's when she noticed the date. Sharron contacted the notary who admitted she buckled under the pressure of the mortgage broker and allowed the documents to be back-dated by the borrower in her presence and notarized them as such.

Sharron immediately reported the incident to her manager, Jeanne Ayala. Jeanne contacted the National Escrow Administration department and a plan was formed. Sharron worked to set up a new signing appointment with a different notary and the National Escrow Administration contacted the mobile notary company, Flex Closing Corp.

Jeanne confronted the mortgage broker and informed him the borrowers would have to re-sign the loan documents. She also explained to him the Company chose to no longer work with him. In the meantime the lock expired, and the broker had to re-lock the loan at their expense. It turned out to be an expensive lesson.

The same mobile notary company selected a different notary to meet with the borrowers to sign a new set of loan documents. At the subsequent signing a few more errors occurred. The date inserted, which represented the expiration of the rescission period, was incorrect. It reflected an expiration date of four days out, not three, and the husband failed to sign the Notice of Right to Cancel. Additionally, the Errors and Omissions form was not executed by either borrower. The notary attempted to contact the borrowers to have the Notice of Right to Cancel corrected and initialed (with the lender's consent) and execute the Errors and Omissions form which also needed to be notarized.

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The wife told the notary her husband had left for a hunting trip. The notary explained the forms would have to be initialed and signed or their loan would not be able to fund on time. The wife asked the notary to e-mail the forms to her and she would drive it out to her husband.

The notary e-mailed the forms to the wife. The wife e-mailed the executed and initialed Notice of Right to Cancel back to the notary. It appears the Notice was forged by the wife since the signature did not match any of the other documents signed by the husband while appearing extremely similar to the wife's signature. The other form, which had to be signed AND notarized, was not returned. Was the notary planning on violating the cardinal sin of notarization by not witnessing the signing of the document? Even if the form was returned the notary would not be able to legitimately notarize it since the signers did not personally appear in front of her as it related to this particular form. The rules of notarization apply to each and every form individually.

Sharron took the matter into her own hands and had the remaining two documents executed and notarized properly. She was able to fund and disburse her file. Thank goodness Sharron was alert and carefully reviewed the loan documents. This story could have had a much worse and costly ending. Not only was the mortgage broker advised we chose to no longer work with him the approved notary company, Flex Closing Corp., was also removed from the Company list of approved notaries.

It was Sharron's diligence that proved why the first and most important option of Document Execution Guidelines is to have the document executed in the presence of one of our employees. FNF settlement agents know back-dating documents is unacceptable and Sharron did not turn a blind eye to this unacceptable practice in her file. For her efforts she is being rewarded $1,000 and a letter of recognition on behalf of the Company.



There Is No RIGHT Way to Do the WRONG Thing!

Our lender customers expect the settlement agent to ensure the documents are delivered and executed by the borrower in accordance with Regulation Z. If we select an outside notary to conduct the loan signing that liability does not go away. It is never acceptable to allow documents to be back-dated.

Jill Mason, Escrow Officer with our Chicago Title Office in Salinas, Calilf., was very clear with the loan processor from the very beginning. Back-dating the loan documents was against the law. Read the e-mail chain below for all the details.

Loan Processor:
Did the borrower sign docs today? Otherwise we would have to find a notary that is willing to back-date. We have to fund by Friday to make the lock.

Jill Mason:
Notaries do NOT back-date. If he signs today it can fund and record on Monday, the last day of the month.

Loan Processor:
We have a notary company that will do that. We cannot extend the lock because it will cost my broker too much money. I will send you the notary's company info soon. Please have these docs sent out today so we can fund on Friday.

Jill Mason:
You are in luck, that signing company is a FNF approved notary. I will not ask anyone to back-date nor will I be a part of back-dating as it is against the law.

Loan Processor (to the signing company):
Please find attached a request for a new signing. We would need a notary that is willing to back-date to yesterday since we have to fund on Friday due to lock expiration. I understand you should be able to assist us with that. Please let me know if you have anyone and I'll get escrow to send you the docs.

Owner of signing company:
Ok no problem. We will get set up now. Thanks for the signing.

Scheduler of signing company:
Just an update – I have notaries willing to get the signing done today but no one is willing to back-date because they don't want to lose their notary commission. I will continue to try and find someone to back-date.

Loan processor:
Thank you, please keep me posted.

Scheduler of signing company:
I have a notary willing to back-date but he is asking for an additional $30.00 and he will need documents ASAP. ☺Let me know.☺

Loan processor:
That's fine. Please proceed. Nice work!

Scheduler of signing company:
Please send the documents to him ASAP.

Loan Processor (to Jill Mason):
Please send the docs to the notary as soon as you can.

Jill Mason:
Okay, will do!

Jill Mason:
Please be advised we cannot accept the loan documents signed and dated for August 24, 2009 as we have knowledge they have been back-dated. I've contacted the borrowers who will be in my office today at 3:15 to re-sign the documents with a date of today. Should you have any questions, please contact my manager, Carolyn Wylie.

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As unbelievable as the above conversation seems, it was printed verbatim from a chain of e-mails. National Escrow Administration reported the incident to the funding lender's fraud department for further investigation. They did not feel back-dating the loan documents was acceptable either. Back-dating the loan documents violates Regulation Z of RESPA which clearly states each borrower must be given a three day right to rescind their loan before any loan funds are disbursed. If the borrower is not given three days the rescission period lasts for three years.

This mobile signing company was Loan-Closers.com and they have been removed as an approved notary for FNF, which is a shame since it was an entire company. There were several other notaries for that company who would not conduct the signing because of the request to back-date the documents. One notary ruined the entire account for all their notaries.

Jill's ethics were clear from the very beginning. She informed the loan processor from the start she would not participate in the back-dating of documents. The loan processor called her bluff and in the end it was Jill's highest standard of conduct which prevailed. For her efforts she has been rewarded $1,000 and a letter of recognition on behalf of the Company.

Reply by MW/VA on 10/20/09 6:24pm
Msg #307987

Great story--thanks.

Reply by Donna McDaniel on 10/20/09 6:31pm
Msg #307991

Is this from the Bancserv newsletter? If so, the one I have says it was Flex Closing Corp.

Reply by Pamela Hoyle on 10/20/09 6:38pm
Msg #307993

HOLY COW!

Reply by Karla/WA on 10/20/09 6:43pm
Msg #307996

Again...I reiterate my point......it's a profession

and not worth less than what a professional would charge...I'm on a roll today, but we are asked to fulfil a responsibility......each and every situation is different and if you are an inexperienced notary...that's ok...but the experienced notaries know WHEN and WHAT to do. I've been notarizing loan documents for years and I still come across unique situations. I will not backdate, I will always contact the title company if unsure of a quit claim deed, and hundreds of other issues. It's a transaction worth $150.

Reply by Marian_in_CA on 10/20/09 6:51pm
Msg #307997

Amazing, isn't it?

These come from the newsletter that was sent to Bancserv's notaries today:


======================
We are forwarding you a copy of Fraud Insights, which is a monthly newsletter provided by our parent company, Fidelity National Financial. The purpose of this distribution is to increase knowledge and raise awareness of how fraud and forgery are perpetuated and to provide tips on ways to prevent it. It is provided to all employees involved in the loan closing process and we are in turn providing it to our signing agent network to share this valuable information with you.

Please take a moment to read these articles, as this edition specifically addresses proper notary practices. It serves to reinforce Bancserv’s expectations of our signing agents and the high ethical standards we represent.

Thank you for the great job you do for us!

Bancserv Management


http://fraudinsights.fnf.com/vol04iss10/fullarticle.htm#article03a

Reply by docs1954CA on 10/20/09 6:55pm
Msg #307999

Yes, The article came from Bancserv, my apologies

I thought that information was in the body of text that I posted.

Reply by John Schenk on 10/20/09 6:53pm
Msg #307998

OMG...unbelievable!

I've been asked on numerous occasions to back-date docs, but refused, of course, so never had the opportunity to see such an exchange. Nothing but criminal acts occurred on the back-dating, which was collusive. You don't allow ANYONE to force you to perform a notarial act that you know is illegal, as we all know that back-dating is in ANY and ALL states.

Congratulations to Jill.

JJ

Reply by docs1954CA on 10/20/09 7:01pm
Msg #308000

There Is No RIGHT Way to Do the WRONG Thing!

By Lisa A. Tyler
National Escrow Administrator

This month's contributing author is Diana Williams, corporate escrow administrator. She has contributed two stories about notaries; "Never Buckle Under Pressure” and "There Is No RIGHT Way to Do the WRONG Thing!” Both stories involve mobile notary companies which appeared on the Company's approved notary list. These individuals were willing to risk their relationship with our Company and their notary commission. Both notaries back-dated loan documents and one was even willing to notarize a document where the signers did not personally appear in front of her.

These were FNF approved mobile notary companies, which begs the question: What kind of training and screening do these outside companies make their notaries go through? Heck, it makes one wonder if these notaries even knew what they did was wrong. Just because a company or individual is shown on our approved list doesn't represent what kind of screening process or experience level they have. Review the "Notary Do's and Don'ts” article for some basic tips on performing notorial duties and selecting BancServ as your mobile notary provider.

As you will learn in this edition of Fraud Insights, if a Company approved notary is selected instead of BancServ, it is the employee's responsibility to make sure the approved notary has not been removed from the approved list before scheduling each and every signing. Approved notaries are regularly removed from the list for expiration of commission; expiration of errors and omissions coverage and for acts of misconduct.

Reply by davidK/CA on 10/20/09 7:14pm
Msg #308002

I sure hope they reported the backdating NSA to the SOS.

Not only should the SS have been bared from future work, but the broker, the loan processor and the NSA should lose their respective employment/licenses/commissions.

If we don't clean out all the bad apples then someday we could be looking back at the mortgage fraud of the past few years as the good old days.

Reply by docs1954CA on 10/20/09 7:24pm
Msg #308004

Re: I sure hope they reported the backdating NSA to the SOS.

I hope so too, David. The part that had me laughing was where the Notary requested an additional $ 30.00 to backdate! $ 30 bucks, are you kidding me? What a moron! Last time I had someone ask me to backdate, I told them there would be an additional fee of $2,000,000 upfront before I would do that.I figured that would cover my fines,pay my bills while I was in jail and cover my lost wages for several years.Of course, I wouldn't do it anyway, but he got the point.

Reply by NewPhoenix on 10/20/09 8:47pm
Msg #308013

Question about your wording

Ok I have a question that I mean to be serious and thoughtful relating to a small portion of the wording above just for clarification. In the post above the words "back-dated by the borrower" were used 2 - 3 times.

I had a situation a couple of months ago where the (TC or SS, I don't remember which) "Forgot" a few pages which they emailed to me the day after the signing and asked me to go back out. BUT - they wanted all of these to be dated the same as the other documents. I said fine, I don't care what date the borrowers put on them as long as I don't have to Notarize/back-date anything - I - stamp or sign.

Well I get the docs and sure enough one of them had a place for the Borrowers Signature and Date, as well as an Affidavit for me to date, sign and stamp. Well on THAT document I asked the Borrower to put the current days date and that's the date I put in my area and stamped (of course). My thinking at the time (incorrectly I was later told here on NotRot) was that if I let THEM "back date" it would give the appearance that I had watched them sign on THAT date which they did not. This was not a case of them attesting that "yes that is my signature", I actually did watch them sign on the current date. The TC/SS was upset but I stood my ground (ok, again, incorrectly I was told) and everything funded/was paid so I guess it was ok ultimately. I'm not asking about what I did at that time (already hashed and rehashed that), I'm wondering if I had let the borrower enter the day before - would that have been back-dating by the borrower?

My questions are when you say "back-dated by the borrower" do you mean the date THEY put on a document or the date the Notary is being asked to use? In other words: 1) it is ok to watch a borrower enter and sign a previous date on a document that you DON'T stamp (ok, NP). 2) Can they put any date in THEIR signature area as long as you enter today's date where YOU as a Notary sign and stamp? 3) if they put an earlier date and you as a Notary fill in and stamp today's date (correctly) is that "back-dating by the borrower"? Are all three of those scenarios proper and legal as far as a Notary is concerned?

Some of this is obvious, but I'd like to get some clarification on the term.

Reply by John Schenk on 10/20/09 9:06pm
Msg #308020

Turn a blind eye or not?

As a notary you date the docs the date they are signed, period. As a signing agent, witnessing someone fraudulently dating documents for a date, other than the date they signed them, is that right? As you witnessed them signing and entering a date, other than the date that they were signed, it's probably conspiracy to commit a fraud. Whether you'd ever get charged for it you may not know for 30 years.

I think that folks need to remember that a NOTARY can ONLY charge fees to notarize documents that are set by their state. When we are Signing Agents, and charge more than the State fees, we have a DUTY above and beyond the fee acceptable by the state for what we do. IF we were only there to notarize docs and charge what we to it would be WHAT? ILLEGAL! It would be ILLEGAL because we are charging more than our respective states allow us to charge to notarize docs.

I think we have to ask ourselves whether we are willing to sit there and WITNESS people committing fraud, or not. We ARE a witness to whatever they write down, as a SA and as a Notary. If today is the 20th, and they write down the 16th, and we take those docs out there, are we not also a party to that fraud, which I think it is. Won't come back, most likely, to bite you in the butt until the lender has a default on the loan or something else happens, which may be a criminal investigation that puts you right smack dab in the middle of it because that loan, out of millions of them, happened to be the one you were not only the Notary on, but a SA charging fees above and beyond normal notary fees. THAT, my friends, is where we get put on the hook to be sure we don't get in trouble.

Just my lay opinion and no legal advice, yada yada.

JJ

Reply by NewPhoenix on 10/20/09 9:25pm
Msg #308025

Turn a blind eye or not?

Whoa John, back-peddling here. You seem to be in agreement with my position a couple of months ago that the borrowers should ONLY put the current date where they sign. But that concept was shot down by everyone who responded to my post then, generally with something like "They can put down whatever they want on the documents that is not concern of yours - all you are doing is saying you witnessed their SIGNATURE on today's date...". And a 30 minute 'discussion' with a very unhappy TC person who basically said the same thing.

Reply by John Schenk on 10/20/09 10:11pm
Msg #308046

Re: Turn a blind eye or not?

If I said that, I believe I was absolutely WRONG, in my lay opinion. I got to thinking about state set notary fees, and the fees we charge above and beyond what we can legally charge as notaries. I never really thought much about that before, and that is my BAD. I believe that if you witness someone putting a date on a doc, as a Signing Agent, that is also a Notary, and that date is not the date that person signs, that you are probably a co-conspirator to a fraud. We witness the dates they put on there, and we witness them signing and putting those dates on there.


If the dates are typed in, that could be a gray area. IF the borrowers fill in a date that is not the date of the signing, that's a BLACK area the you witness, as a SA. That's why you get paid more than state set fees to go out and witness a signing, printing, and travel, blah, blah, blah.

I think it's fine for folks to sign when a date is already typed in that is a date other than the date of the signing, other than any notary dates of course, but I DO believe the signers must fill in the date of signing, in writing, for the date of signing. I think I've always said that, but if I didn't, I apologize.

Not legal advice, etc., etc.

JJ

Reply by NewPhoenix on 10/21/09 12:10am
Msg #308050

Turn a blind eye or not?

Ok I agree I think. But it occurred to me to look at it this way: if I see someone sign a document and start to put some other date on it (a document that I have nothing to do with as a Notary) - if I stop them and say "Hey, don't put that date on there!" or something to that effect - is that not UPL?? I mean if I am not signing as neither a Witness nor as a Notary? Even if I am going to pick up the document and mail it to someone else? Should I say to them "If you put that date on there I won't mail it to..." - is it my "job" to judge what they put on a document that I am simply forwarding to someone else?

Could I be accused of conspiracy and/or fraud if I allowed them to sign/date any way they want to or in effect DIDN'T stop them from signing/dating "wrong"? On the other hand if I TOLD them not to sign or date a certain way wouldn't that BE giving legal advise?

LOL it's late and maybe I didn't make my point very clear...