Posted by firegirl on 5/18/10 4:05pm
Msg #337014

Help --Need Advice!!

I was contacted by a SS I did a closing for 3 years ago. The husband was on the note, the wife was not. She was on title. The couple has since defaulted on their loan. The problem arises from the fact the wife did not sign the deed of trust. Only the husband's name was on the signature page and his was the only one notarized. This is making problems for the title co./lender who is trying to enforce a judgement for default. I, of course, am panicking. Any insight anyone can give would be appreciated. BTW I did at the time of the closing have 100K e & o Policy.

Reply by Sylvia_FL on 5/18/10 4:11pm
Msg #337019

Ok - when you did the signing, were you advised to have the wife sign the deed of trust?

Even when we know the spouse should sign a mortgage or deed, we cannot advise them to sign (unless instructed by the hiring party), that would be akin to giving legal advice as we are dealing with a legal document.

Oh - and Notary E&O Insurance only covers notarial errors, if there was an error in the notarization.

Reply by CopperheadVA on 5/18/10 4:12pm
Msg #337020

Was her name on the signature page and you missed having her sign? Or was the document drawn up incorrectly, leaving her off the signature page?

Did they fax you a copy of the document? If you had missed a signature, especially one as important as that one, then surely someone at the TC or lender would have noticed at the time the package was returned. I think if it were me, I would make a visit to the courthouse to see the recorded document and make sure that her name was indeed typed on it.

Reply by Marian_in_CA on 5/18/10 4:13pm
Msg #337021

Maybe it's just me.... but how is it your fault? This would have been an error they should have caught and corrected 3 years ago.

And, I'm not sure your E&O would even cover it. Did they request the wife's signature on the DOT?


I could be misinterpreting what you're saying though.

Reply by mwm143 on 5/18/10 4:29pm
Msg #337025

Not your responsibility

You only notarize signatures. Regardless of the instructions from TC. Provided the wording properly states you witnessed John Doe's signature and no one else's how can you possibly be responsible?

That's why non borrowing spouses sign Mortgages though. It's going to be a battle for the Lender to take possession of a property that has a second party interest if that second party didn't acknowledge they could lose their home. Clearly this was the reponsbility of the TC to ensure all interested parties signed that document.

Reply by Ronnie_WA on 5/18/10 4:26pm
Msg #337024

As long as you followed your client's written instructions to a "t", you have nothing to worry about. The signing agent cannot presume to have a spouse sign a document absent such instruction. You are not required to possess sufficient knowledge to know when the lender/title company is making the mistake of not requiring the spousal signature. When we point out these mistakes to them, prior to concluding the appt, it is simply a bonus that they receive the benefit of our expertise that oftentimes saves the title companies from paying out on expensive claims, as they will have to do in this instance if it is their oversight.

Reply by firegirl on 5/18/10 4:44pm
Msg #337028

To answer questions...

Yes the wife's name was omitted from the signature page of the DOT, and the husband's was the only one I notarized (correctly). Her name was typed on the first page of the DOT, but for all I know it could have been added after the fact. I have no reason to think the TC would do something like that, but I do intend to go to the courthouse to look it up. It was so long ago that I can't recall if I was specifically instructed to have the wife sign the deed of trust. I believe I would have done that though, if instructed. I am digging through everything I have but don't really expect too much. I agree that the liability lies with the TC and others that should have noticed this oversight long before now. I have picked up on this type of thing in the past but agree it is not my responsiblity. Of course that doesn't mean I'm not losing my mind over this.

Reply by Bob_Chicago on 5/18/10 4:43pm
Msg #337027

Agree with most of what has been said here, BUT , I

have seen numerous instances of a Mortgage in a spousal state,
having the NBS named on the Mortgage, on the first few pages depending on
the form of mortgage used, BUT not being on the signature page, due to glitches
in a software.
In that case, a call would be in order to determine if NBS should sign. Absent being able
to reach someone in authority, I would consider have tne NBS sign the mortgage, as
that was clearly the intent.
In nearly all cases, too few signatures are a MUCH bigger problem than too many.
Would not constitute a NSA error to not have them sign (absent specific instructions)
but it something that an experiences NSA should be expected to catch.
If NBS is not named on the signature page, not catching it seems to be clearly the TC's error. Too bad that the error was not caught until way too late.
Even if NBS did sign mortgage, she might still have had a defense of no RTC or TIL.

Reply by Ronnie_WA on 5/18/10 4:46pm
Msg #337029

I should also have mentioned that the spouse's name is often times not preprinted on the DOT or Mortgage, but you will find that the closing instructions do require their signature. Just double-check to ensure you followed all instruction precisely. If you did, you are in good shape. There are many notaries providing a signing service that don't possess the knowledge of the various states laws. This is a risk the title companies knowingly assume when they hire notaries without escrow agent or title officer experience. They calculate that risk into their cost of doing business.

Reply by Ilene C. Seidel on 5/18/10 4:52pm
Msg #337030

Maryland is a TPL state and we are expected to catch errors such as these. We are considered the same as a title company. This was one of the issues at the MIA meetings last year. It's a big liability to work in Maryland. I always ask bo if there is anyone else on title to property. I don't know your liability Firegirl but do keep us informed how everything went. We wish you luck!!

Reply by Ronnie_WA on 5/18/10 4:57pm
Msg #337032

Ilene, what's TPL? I'm in WA. Just curious.

Reply by Ilene C. Seidel on 5/18/10 5:02pm
Msg #337034

Title Insurance Producers license it is required for all title companies operating in the state of Md and for contract closing agents or as Maryland Insurance Commission calls us Licensed Title Insurance Producers Independent Contractors. We must maintain Surety Bonds of $150,000.00 to maintain this license.

Reply by Ronnie_WA on 5/18/10 5:06pm
Msg #337036

Oh, oh, then I take back everything I said previously.

Reply by Sylvia_FL on 5/18/10 5:02pm
Msg #337035

Title Producers License n/m

Reply by MikeC/NY on 5/18/10 5:14pm
Msg #337038

I don't see how this would become YOUR problem 3 years later - it should have been caught by the TC before the DOT was recorded. I know that here in NY, the names on title and mortgage have to be the same even if only one is signing the note, but I'm not sure how it works in other states. It does seem reasonable that if one of the title holders is NOT on the mortgage or DOT and there is a default, that person can just say "OK, which half of the house do you want?" Which is probably the problem the lender is facing now...

It would be a good idea to check the recorded documents against the ones they're now claiming had the wife's name on the first page. Even if they did and there was no signature line for her, did you really miss a signature? Our job is not to interpret the docs, it's to get them signed and notarized. It's the TC's job to provide instruction and review the docs before recording them - if anyone dropped the ball on this one, it wasn't you.

That's not to say you won't find yourself dragged into the litigation, and as others have pointed out your E&O doesn't cover this stuff. You may be in for a rough ride, but I think ultimately it will be someone else at fault.

Good luck!

Reply by lindetteh_PA on 5/18/10 6:14pm
Msg #337044

Firegirl what exactly is the ss asking you to do? Sounds like the TC will need to use the Title Insurance policy.

Reply by firegirl on 5/18/10 7:19pm
Msg #337045

Ilene

What are you basing your statement ' we are the same as a title company' on? Are there actual legal requirements we face, or do you mean that it would be 'expected' that such an error/oversight would be caught by a licensed person?

Reply by Ilene C. Seidel on 5/18/10 7:48pm
Msg #337050

Re: Ilene

When I went to the MIA meetings last year the commissioner's concern was our role in the closing process. Meaning are we acting in the best interest of the borrower. Are we explaining the docs to the borrower and not just a witness only closing. What I mean with regard to your question is we are licensed the same as the title company and are required to complete a full closing. And yes there are legal requirements we face that's why we carry a surety bond. And even though no one has actually said an error is just as much our fault as the hiring title company I think we need to be careful when closing a loan. I review the loan package before meeting the borrower and if I see numbers off or docs that don't match others in the package or that darn Md Refi Aff. missing I go back to the title company and bring it to their attention. And yes I've heard it's not my problem just close the loan, but it is my problem I have to justify to the borrowers why the docs don't match. I really don't think you are in hot water. That DOT slipped thru the title company, abstractor and recording office. Where the heck were they apparently not doing their jobs.

Reply by firegirl on 5/18/10 7:56pm
Msg #337051

Re: Ilene

Shoulda, coulda, woulda....

I feel badly about not catching it. I probably should have. I have caught errors like that in the past, but yes, I would agree that the buck doesn't stop with me. The ultimate responsibility lies with the title co. I appreciate your and everyone else's responses to my situation, and I am feeling better about it. I intend to go pull the document at the courthouse and I will also be giving MD Land Title a call to see if they have any advice. But otherwise, I am not going to pull my hair out.

Reply by Sylvia_FL on 5/18/10 8:06pm
Msg #337053

Re: Ilene

Firegirl
Are the records available online?? Save a trip to the courthouse.

Reply by Ilene C. Seidel on 5/19/10 5:53am
Msg #337075

Re: Ilene

No such luck Sylvia. Maryland is not as updated as Florida, she will have to go to courthouse to look it up.

Reply by Vince/KS on 5/18/10 7:32pm
Msg #337049

Statute of Limitations?

Kansas states the following under Penalties for Improper Notarizations (please note the statute of limitations below):

"If a notary improperly notarizes a document the following actions can be taken against the notary:
1. A claim may be filed on the notary’s bond.
2. The notary may be sued individually based on negligent or willful misconduct.
3. The notary may be prosecuted on a Class C misdemeanor for failing to attach the date of
expiration.
4. The notary may be prosecuted for other crimes, such as false writing.
5. The notary may have his or her commission revoked by the secretary of state.

There is a statute of limitations that limits the filing of a lawsuit
on notarial acts to three years after the cause of the action
accrues (K.S.A. 53-113)."

Reply by BrendaTx on 5/18/10 8:07pm
Msg #337054

Re: Help --Need Advice!! - Would like to know why

the SS is even involved at this point, or what their purpose was in contacting you....and why did the TC contact them?

Sounds like a lender, borrower, title company triangle to me. I see no reason for the SS or you to have been contacted. Are they (the title company) grasping at straws? Hoping that the notary can pull a rabbit out of her hat?

Reply by Patti Corcoran on 5/18/10 9:36pm
Msg #337060

Re: Help --Need Advice!! - Would like to know why

Firegirl - I have no advice - just tons of empathy. I can't imagine what you are going through! Good luck sorting this out!

Reply by Pat/IL on 5/18/10 9:39pm
Msg #337061

It's clear that the title company is in a pickle. I have never heard of an instance, in any state, where a titled spouse (or any title holder, for that matter) does not need to sign the security instrument in order to perfect the lien on the property. And if anyone should know who is in title, it would be the title company. I'm pretty sure they have a claim on their hands.

Your story is light on details, but that's understandable as you haven't found any remnants of the three-year-old paperwork. It would be interesting to know how the signing service approached you with this, i.e. asking questions reconstruct their own involvement, or maybe more accusatory toward you.

Seems to me, the problem you might have is that, if anybody is being sued, then everybody involved is being sued. Or, if it's just a matter of a claim against the title company, they will often first try to defend and then, if they lose, they will try to recoup losses from other parties.

From the little I know of your situation, I will only say that, if I were in your position, I would not worry too much until I received notice that I was a defendant (okay, I might lose a little bit of sleep - okay, a lot). At that point, I would find a lawyer who specializes in this kind of stuff. I would think a good lawyer would waste no time in obtaining a full copy of the file kept by the title company and that of anybody else involved. If you have any liability, it could be minimized by a good attorney who knows what to look for in those files.

Reply by kathy/ca on 5/18/10 11:15pm
Msg #337065

I no longer do loans for this very reason, too much liabili

I strictly do "general" notary work now where I feel there is less to worry about.

Reply by Ilene C. Seidel on 5/19/10 5:56am
Msg #337076

Re: I no longer do loans for this very reason, too much liabili

In Maryland we would starve to death. All we can charge is $2.00 for 1st Ack. $1.00 for 2nd ack. and a maximum of $5.00 for travel. I rarely do general notorial work.

Reply by Linda Juenger on 5/19/10 7:54am
Msg #337086

Ilene, why does your posts say FL when you are in MD? n/m

Reply by Shoshana/AZ on 5/19/10 8:29am
Msg #337093

Less liability in General Notary work?

I think not! There is still plenty of liability.

Reply by kathy/ca on 5/19/10 10:35am
Msg #337109

I still think more can come back on us doing loans althoug

there is still some liability in general notary work too.

Reply by Shoshana/AZ on 5/19/10 12:53pm
Msg #337147

Re: I still think more can come back on us doing loans althoug

There is a lot more liability in general notary work than you think!

Reply by 101livescan on 5/18/10 11:16pm
Msg #337066

What would I do in your situation: Sit tight. Be careful to document every email and telecon. Listen carefully to the conversations. As notaries, we make the very least in these transactions, less than the appraiser, the lender, the title company. It will be deep pockets. Whose documents are these, the lenders...they screwed up, I think, but the title company is supposed to be the sieve for these errors. Keep us posted. This is one of the more interesting entanglements I have heard of lately. Good luck, and don't stress! if possible.

Reply by Maureen_nh on 5/18/10 11:39pm
Msg #337067

I hate to rain on your parade, I do not think you are liable but don't you know whether you are a spousal state or not? TaDa call
whoever and remind them and then ask for guidance.
Not saying I am perfect-family plus computer mess yesterday and got so freaked out I made some boo-boos. Hope they don't come back to haunt me too.

Reply by Julie/MI on 5/19/10 7:20am
Msg #337080

As a TPL state

I hate to say it, but as a TPL state, you may have more responsibility. In

Ultimately, the title company should have caught this, but now that the loan is in foreclosure, this could really be a doozie, having an unperfected lien. The bank must be furious!

I get many mortgages where the non borrowering spouse is printed on page one of the mortgage, but the name never ends up at the signature line or acknowledgement. I guess since I was a title person, it's in my blood, to have the non borrowing spouse sign.

Sounds like this could be a drawn out procedure, I hope you don't have any liability.

Reply by CF on 5/19/10 7:57am
Msg #337088

Doesn't the lender prep the mortgage/dot/ security

instrument anyway and send them to the title co? It seems like this is their problem. From the standpoint of arguing on UPL, alone, the notary would not be responsible for this. I would not worry until I am served with a notice to appear in court. I would not be responding to any of their inquiries either. You are just the notary....the person/ company that drew the docs is responsible for this error. I would only put in writing that you have no obligation to correct any documents, or add names to signature lines. Your only obligation is to notarize the signature line of the person names that was pre-printed on the document. Do not explain anything else!

Do not backwater....they are looking to place blame on, what they think is, the weakest link.

Reply by JanetK_CA on 5/19/10 2:07pm
Msg #337172

Re: Doesn't the lender prep the mortgage/dot/ security

First of all, I'm guessing you haven't read the entire thread. Otherwise, hopefully you'd realize that this is another situation where state to state differences can make a big difference. (At least I hope that's why you said what you did in such a strong fashion.) Or maybe you're just speculating on what you would do in a similar situation??

Secondly, while the lender may prepare the DOT, it's the title co that has to insure clear title. I don't claim to be an expert in any of this, but I do know enough to realize that it's not quite as cut and dried as you state.

Reply by CF on 5/19/10 4:24pm
Msg #337218

JanketK_CA- i did read the thread and that is my opinion

that I stated- just as everyone else did.