Posted by ReneeK_MI on 9/23/10 4:23am
Msg #353528

lawsuit over backdating ...

From Source of Title:

Title Agent Sued by Lender Over Rescinded Mortgage Loan
September 21 2010 (subscription)
Borrowers were able to rescind a mortgage loan one year after it closed because the documents had been backdated, which eliminated their 3-day right of rescission. Furthermore, the borrowers were only provided one copy of the notice of right to cancel, rather than two copies as required by federal law. The lender then sued the title agent for breach of fiduciary duty and negligence.

Reply by CopperheadVA on 9/23/10 5:58am
Msg #353530

I'm curious to know how the borrower proved the backdating?

I've been asked to backdate many times - sometimes by random TC & SS callers, but also by my really good clients. Of course I have declined every time, and glad of it!!! I can live with the peace of mind that this kind of thing will never come back to haunt me.

Reply by Julie/MI on 9/23/10 6:24am
Msg #353532

Great post. This is what I like REAL stuff not speculation.

Interestingly enough, I had a closing 5 weeks ago. We met at borrowers work which was a law firm. Her docs were incorrect and we had some table talk while she was on hold with the LO.

She is a lawyer and part of her mega firm is representing insurance companies that represent lenders that get involved in the mortgage process for modifications or proof their loans (the note) is not present therefore not valid in the foreclosure process.

She said a biggie that puts a clinker in the pot for the lender is that just what Renee's article stated that only 1 RTC was given not 2.

Great article, Renee, thanks for sharing.

Reply by SharonH/OH on 9/23/10 6:41am
Msg #353533

But again, how is it proven? I know many times that I have made extra copies of the RTC for the BO when the edocs contained only one. (These days I usually get 6 or more!) Not sure how it can be proven that 2 copies were in fact provided, other than my word against the borrowers, assuming I was even called in on the matter.

Reply by Mary Ellen Elmore on 9/23/10 3:08pm
Msg #353673

Hmmm, this may be something we might should note in our journals--CYA

Reply by Lee/AR on 9/23/10 6:45am
Msg #353534

Dumb questions: How would anyone be able to absolutely prove how many RTCs were or were not provided? How hard would it be for a B to simply toss a few in the trash? How would one actually prove backdating? A year after the fact, you suddenly remember that it was really the 4th and not the 1st of the month that you signed these documents? Aaarggh.

Reply by kflorida on 9/23/10 7:25am
Msg #353537

do you give them there 2 signed copies from the lenders package you are returning or you give them the 2 to 6 blank ones in there copies? i know this has nothing to do with backdating but you all brought up the rtc...

Reply by Donna McDaniel on 9/23/10 7:43am
Msg #353541

I always give them 2 EACH, even if they sign the same one. I leave the copies in the borrowers copy package and print extra if there isn't enough in the lender's package. Taking no chances.
As far as backdating, never been asked, never would. Like everyone else, my commission is my livelihood.

Reply by Hugh Nations Signing Agents of Austin on 9/23/10 9:25am
Msg #353559

No way

***print extra if there isn't enough in the lender's package.***

I won't go through a loan package and print extra RTCs.

Presumably both lender and title company know how many borrowers there are. They also presumably know the law. It is their responsibility to see that an adequate number of RTCs are in the packet, and I don't want them ever transferring that responsibility to me; that is a sure path to inclusion in a lawsuit.

I'm there to get the documents signed, explain their purpose, and get them back to the TC. I'm not there to ensure compliance of the lender/TC with their responsibilities, except as it relates to MY legal responsibilities.

Reply by Linda_H/FL on 9/23/10 9:35am
Msg #353566

I disagree with you Hugh...

I always make sure I have enough RTC's for all signers...always...

Borrowers/signers are signing at the bottom that they have received two copies each...and I feel it's up to me to provide that (just like it's up to me to print/provide a copy of ALL the documents to the borrowers)....I have them sign ALL copies of the RTC and leave two signed copies each with the borrowers/signers.

So, Hugh, you go in with only one copy - borrowers sign at the bottom that they've received two copies each - suppose they look at you and say "Where are my two copies?" What's your answer? "Sorry, they only sent one"??.... sorry, that doesn't fly with me.

JMO

Reply by Donna McDaniel on 9/23/10 9:40am
Msg #353568

Re: No way

"It is their responsibility to see that an adequate number of RTCs are in the packet, and I don't want them ever transferring that responsibility to me; that is a sure path to inclusion in a lawsuit."

The plaintiff's lawyer may feel otherwise.

2 RTCs for the lender (unless they require more), 2 for signer 1 and 2 for signer 2. I've done my job when I physically hand them to the borrowers.

I've noticed a lot of fraud involving notaries in the news lately. I won't put myself in that position and will be prepared if I am.

Reply by Hugh Nations Signing Agents of Austin on 9/23/10 10:17am
Msg #353579

That's the point: It isn't your job

***I've done my job when I physically hand them to the borrowers.***

You've done YOUR job when you provide the borrowers with what the lender/TC have provided you. When you take it upon yourself *as a matter of routine* to fill in gaps left by others, then you have indeed laid yourself open to liability.

What happens when the lender/TC are sued, and their defense is that they rely upon YOU to always make sure that the correct number of copies is delivered, and you have acquiesced in that approach? It won't relieve the lender/TC of liability, but it sure as hell has the potential for also settling liability upon you.

Reply by Donna McDaniel on 9/23/10 10:37am
Msg #353583

Re: That's the point: It isn't your job. Yes, it is.

It is in the 98% of the notary instructions. As far as filling in gaps, as long as it is not UPL, I believe it is just good customer service.
Again, if someone brings a lawsuit, chances are very good that all parties involved in the transaction will be named. Unfortunately, that's the way it is. I f I do my job correctly as a notary and as an NSA, that makes me a lot less liable. Two hats! I learned that from this forum.

Reply by Hugh Nations Signing Agents of Austin on 9/23/10 11:01am
Msg #353588

Your view is a bit shortsighted, Donna

***Again, if someone brings a lawsuit, chances are very good that all parties involved in the transaction will be named.***

True, Donna. Any competent lawyer is going to sue whoever might have some culpability. But you have, in my view, substantially increased the chances that a JUDGMENT would be taken against you if you have agreed that it is part of your responsibility to do what the lender/TC are supposed to do.

Reply by Donna McDaniel on 9/23/10 11:12am
Msg #353593

So then,can you answer Linda's question...

If you are given only one RTC, what would you do?

Reply by Hugh Nations Signing Agents of Austin on 9/23/10 11:58am
Msg #353607

If you are given only one RTC, what would you do?

I would give the borrower a copy of the packet provided by the lender/TC.

In response to Linda's query later in this thread:

I print out packets. I do not guarantee to my customers that I will have time to review those packets. In fact, the extent of my review is to go through the packet and pull out the note, the TIL and the HUD so that I can present them first; I don't look for anything else, and don't want my customers to rely on me doing so. I certainly don't want them relying on me to CYA them in meeting their statutory responsibility for something as critical as the RTC.

And, if there are an inadequate number of RTCs, I will present what I have. If they're short, they're short.

Reply by Linda_H/FL on 9/23/10 12:01pm
Msg #353609

I just have one response to you Hugh....wow... n/m

Reply by Linda_H/FL on 9/23/10 11:14am
Msg #353594

Re: Your view is a bit shortsighted, Donna

"...if you have agreed that it is part of your responsibility to do what the lender/TC are supposed to do. "

Two different things - doing the things the lender/TC are supposed to do vs. doing the things lender/TC *instructs* you to do.

Reply by Cari on 9/23/10 10:46am
Msg #353586

Re: That's the point: It isn't your job - IT IS.....

Hugh,

do you check for any type of notary or closing instructions when you receive loan packets? Or even email confirmations for instructions? I sure do because 9 times out of 10, there are very specific instructions for the notary to adhere to.

And these are very specific. And these instructions usually from the more reputable TC's, and Lenders. They are very specific notary instructions that are usually in big bold black letters, which indicate that the NSA must provide the BO with 2 RTC's each.

When these instructions are included in the packet (or email confirmations) the expectation is that the NSA will follow the directions down to the letter, no questions asked. Thereby transferring that particular responsibility which is that of the lender/tc, (I agree with you), over to the NSA.

Reply by ReneeK_MI on 9/23/10 11:34am
Msg #353598

I also disagree, Hugh

I think you're thinking as an attorney, and you make a valid point or two but I don't think they over-ride two things:

1. The instructions that are nearly always present, but if not ...
2. The common and routine instructions in most pkgs, as well as common & routine practice

For the sake of debate, let's assume you do a closing totally void of any instruction, and there are insufficient RTC's. You tell the borrower to "sign here" and you say NOTHING else. They ask no questions, and sign.

How do you respond to these questions when asked in court::

"Was this your first signing? Is it normal, usual and routine for most TC's to instruct you to provide 2 copies? Are you or are you not aware of the RTC requirement as it states ON the form? I see you advertise as a Signing Agent, can you tell me what makes that different than advertising only as a Notary Public? Have you ever discussed this RTC copy requirement with your colleagues? If you ARE aware of this requirement, can you tell me why you would fail to perform as is usual & expected in your profession? Did you inform the TC that you would NOT be providing the required number of copies unless/until they require you in writing to do so?

Reply by Cari on 9/23/10 2:28pm
Msg #353649

Re: I also disagree, Hugh

I guess Hugh has seen your point, and has taken the 5th!

Reply by MichiganAl on 9/23/10 1:54pm
Msg #353637

Why take the chance?

10 seconds to print an extra copy and be done with it. Protects us, the lender, & the t.c. It's just the smart thing to do for everyone involved.

Reply by Mary Ellen Elmore on 9/23/10 3:15pm
Msg #353680

Re: No way

TC and Lender do NOT always know how many signers. Just the other day I was aked to determine if BO's spouse was alive and if so to have them sign the correct docs.

It takes all of 2 seconds to type "Cancel" in the .pdf search box and find the RTC while the docs are printing and see how many are there.

Reply by Mary Ellen Elmore on 9/23/10 3:12pm
Msg #353678

I pull the RTC's from both copies and then make sure I have enough to cover giving the BO 2 and sending back ever how many the lender/TC needs.

Reply by Tess on 9/23/10 7:28am
Msg #353538

You CAN prove backdating. Phone calls, email and delivery times can be checked, if there are witnesses of you being there on a certain date, and unless you have no other appointments between the dates of the backdating, those who are required to keep a journal will not have the dates/names in consecutive order.

Reply by Stamper_WI on 9/23/10 7:44am
Msg #353542

I drew up a receipt for my records that they sign. I staple it to the invoice. It also explains my role in the signing.

Reply by JulieD/KS on 9/23/10 9:06am
Msg #353556

If the borrowers signed the copy of the RTC that went back to the lender, they've signed a statement saying they received X numbers of copies of the RTC. For them to later say they only received one copy...well, then why did they sign the RTC? I tell the borrowers when I explain how to execute the RTC they are signing a statement saying I've them x number of copies each (usually at least 2 copies each, but sometimes 3).

Reply by Alz on 9/23/10 10:33am
Msg #353582

Thrown under the bus once to many times

not to do my own due diligence and of course do what is right.

Reply by Mary Ellen Elmore on 9/23/10 3:11pm
Msg #353676

The backdating would provable by many means:

Date Books or other Diary Entries
Emails
Phone Records


Not agreeing with it. Just because the law says you can do something, does not make it right. Just playing "devil's advocate"

Reply by ReneeK_MI on 9/23/10 8:42am
Msg #353548

used to catch back-dating all the time ...

human nature - the truth will trip them up easily. First - we required faxbacks (as lender), just a couple things but THAT DAY. When you start getting stories ...red flags fly. When you're dating a pkg of say 100 documents, OFTEN someone will trip up at least once or twice and write the actual date ...and then correct it. Usually that's an indicator to a backdate. Another way I could spot them - our docs were d/l'd from a secure site, and I had access to a log of print date/times/users; many times I'd see docs d/l'd after the date they were to close. Another red flag.

As for proving only 1 copy of the RTC was delivered - IF the lender can show adequate copies in the digital file were SENT, it would be a tough case to argue, I'd think. Not a lawyer, yada yada.

Reply by CopperheadVA on 9/23/10 8:57am
Msg #353551

Re: used to catch back-dating all the time ...

Last night's docs = 12 RTC's. Today's docs = 1 RTC. Go figure.

Reply by MW/VA on 9/23/10 9:30am
Msg #353563

Thanks, Renee. I hear stories of attorneys looking for loopholes in the process. Backdating could be proved, including the date the docs shipped.
I sometimes see only 1 RTC in the package, but I always make sure there are 2. There are those that disagree that this is not our job. I think it is our job to catch the occasional mistake at our end & complete a legal signing.

Reply by Cari on 9/23/10 10:28am
Msg #353581

The Title Agent then sues the NSA for failure to provide

the borrowers with the required loan documents as instructed by the Title Agency....failure to do the job duties of a NSA, etc....

So is this a justification for NSA specific E&O insurance? I think so...

Can you keep us updated if the NSA gets sued? Be very interesting to see if the TC used an actual NSA vs. a notary public working for beer money...

Reply by HARRY_PA on 9/23/10 11:47am
Msg #353604

Re: The Title Agent then sues the NSA for failure to provide

What are the job duties of the NSA and who determines and enforces them?

Harry

Reply by Cari on 9/23/10 2:26pm
Msg #353648

Harry PA, I would imagine it was a TC or Lender....

then the XYZ association got a whiff of this glorious way of making money (I know, don't laugh too hard), and so here we are....

other than that, have you Googled it? he he....

Reply by Susan Fischer on 9/23/10 3:31pm
Msg #353688

Just throwing this out there: If I *know* there are suppose

to be, say, two RTCs for each borrower, and one to return with package, but the packet generated by another entity only has one. My question is - is copying the included RTC ~adding~ docs to the packet? Would that be considered "generating" a doc? I have, after all, changed the packet, haven't I? Don't know if that's even an issue, but it came to mind.

Anyway, I'm with Hugh on the risk of creating a liability by performing as a doc compliance person. I'm not quality control for companies who's responsibilities are way over my pay grade. While I completely understand the point about customer service, what is sent by the people in charge of regulatory compliance for *their* work, is what I present to the borrowers. I don't want to be in the position of being *relied upon* to clean up insufficiencies or non-compliance by borrowers, Title, or Lenders. After all these years, it's worked well for me.

Perhaps that's why we're seeing packets with 20 RTCs on the rise...better more than not enough.

jmho.

Reply by droman_IL on 9/23/10 9:29pm
Msg #353751

Re:What if there are NO RTC in the pkg at all?

Did a closing where there weren't any, and the borrower confirmed it was their principal residence, so they required the RTC. Of course, it was a late evening closing and the TC and LO were MIA/No response to calls, etc. Left vm msgs informing them the package didn't have any and when I got back home, sent emails (after double-checking the package again to make sure it wasn't my error!) Got an email from the TC they would handle it. It doesn't need to be notarized, so I don't need to be present when they sign it. I would imagine they would have to date the RTC the day they received it, probably delaying their loan getting funded by a day. Definitely a TC compliance issue, not mine...

Reply by JanetK_CA on 9/24/10 2:38am
Msg #353777

Re: Re:What if there are NO RTC in the pkg at all?

Could it have been a streamline refi (staying with the same lender)? I've seen many of those without an RTC - and none required.