Posted by Tonya Grimes on 9/4/10 10:23am
Msg #351546

Question to Mortgage Originators

If you originate a mortgage loan do you also notarize the docs at the closing?

I have avoided this so far just because I didn't want it to "appear" as a conflict of interest, but after thinking on it more I'm not so sure that it would be a conflict.

What are your thoughts on this?

Reply by Lee/AR on 9/4/10 10:34am
Msg #351549

While probably not illegal, I've done many a mortgage where the LO was present. 'Appearance' apparently was important to them...or perhaps to the Lender.

Reply by Linda_H/FL on 9/4/10 10:37am
Msg #351551

In FL we can't notarize any document in which we are

named or from which we may derive a beneficial interest....

Notarizing that mortgage/security instrument and any other documents for the loan YOU originated and for which YOU will receive a commission is, IMO, a conflict of interest. Better to err on the side of caution and not do it.

MHO

Reply by Ali/IL on 9/4/10 11:57am
Msg #351556

Re: In FL we can't notarize any document in which we are

I see it as a conflict. Since you are getting paid for the originating.

Reply by Doris_CO on 9/4/10 3:16pm
Msg #351572

Re: In FL we can't notarize any document in which we are

I used to work for a large financial company that had to pay a penalty in millions of dollars because the account executives were closing their own loans. As part of the settlement, the company was required to use outside notaries to do the closings. That's how I found out about NSA's and I decided that when I left that company I would look into this business.

Reply by dickb/wi on 9/4/10 3:49pm
Msg #351581

totaly agree.... n/m

Reply by Moneyman/TX on 9/4/10 12:30pm
Msg #351559

I wouldn't do it due to the conflict of interest (real or perceived). IM(non-legal)O, there would be a conflict of interest because you would be receiving money directly linked to the funding of the loan. I'm not sure of the law in AL, just a general thought about conflict.

Better safe than sorry with all the trouble in the industry. You never know what some attorney might advise a homeowner to do years from now should they be facing a foreclosure notice. Why give them ammunition to possibly fire right at you for a small amount of money today?

Reply by MW/VA on 9/4/10 3:04pm
Msg #351567

The whole role of a NSA is to be an impartial 3rd party--not

representing the lender or borrower (as an attorney would do). IMO it is definitely a conflict of interest. There's more motivation to pressure the borrowers to sign. I'm sure you can find a notary to work with you to do the signings for your clients.

Reply by Tonya Grimes on 9/4/10 3:19pm
Msg #351574

I appreciate your thoughts. I was thinking along the same lines, just wanted confirmation of those thoughts.

Reply by Cari on 9/4/10 8:30pm
Msg #351594

if you're getting a commission directly from the loan, then

yes, I believe its a conflict, whether you're an independent loan orginator or working with a lender...IMO

Reply by ReneeK_MI on 9/5/10 4:48am
Msg #351607

Depends on your state & various 'masters'

In MI, the notarial statute clarifies it's definition of interest:

(10) For purposes of subsection (7), a notary public has no direct financial or beneficial interest in a transaction where the notary public acts in the capacity of an agent, employee, insurer, attorney, escrow, or lender for a person having a direct financial or beneficial interest in the transaction.

That's but ONE hurdle cleared (here in MI, anyway) - there are also state mandates relative to originators (who are now licensed here, and I think in most states); and lastly, the policies of both the lender and the insuring title company (and it's agent) - all of whom would have a say in the matter.

I will say this - I see no real difference other than decimal points, relative to "direct financial interest" between a notary who is named on the HUD and a loan originator (whom, by the way, I've never seen personally named on the HUD, just their employer's name).

Reply by jojo_MN on 9/5/10 10:42pm
Msg #351676

Re: Depends on your state & various 'masters'

The difference is, you are hired as an impartial third party. Regardless if you are listed on the HUD or not, you should get paid for your services even if the loan doesn't fund.

Reply by SharonMN on 9/7/10 10:39am
Msg #351744

Re: Depends on your state & various 'masters'

Renee cited MI law as:
10) For purposes of subsection (7), a notary public has no direct financial or beneficial interest in a transaction where the notary public acts in the capacity of an agent, employee, insurer, attorney, escrow, or lender for a person having a direct financial or beneficial interest in the transaction.


I would guess that the intention of this law is to allow a notary employee to notarize documents that allow their *company* to make money. So the receptionist at the lender could notarize the docs, or they could have an in-house closer. But I wouldn't notarize something if I *personally* stood to make money from it.