Posted by NJDiva on 4/8/11 8:13am
Msg #379120

Refi with House up For Sale?

I just tried to search this subject but came up empty.
I'm wondering if it is uncommon or even legal (for those in the legal profession, or if you've encountered this and what your understanding is) that a borrower will refinance the residence they occupy (which includes a subordination agreement) to have their home on the market?
I did a refinance that had a For Sale sign in the front lawn. Additionally, when I requested they give their thumb print in my journal, they (pretty much) adamantly refused (they wanted to see the state law.) Also, the guy said they recently did three other closings (one just a couple of weeks ago) where the Notaries did not require it so it wasn't happening. He said everyone should be doing it then, not just me. I agreed.
I tried to explain that "not everyone keeps accurate records. In the state of NJ, we don't even have training, nor are we required to get it in order to get commissioned. We have to know the laws and are held accountable (as everyone (I think) here knows.) So the notaries that aren't keeping records are taking a big chance on not doing so. But it's not my place to police other notaries. I know what my laws are and take due diligence." He still wasn't having it. What can I do? I just wrote in the thumbprint area that borrower refused to submit their thumbprint. I know in CA it's the law, but here in NJ I don't think it’s mandatory (YET?).
Hmmm, three other closings? Refusing to submit his thumbprint? Raise any red flags? There was another redflag to me, but at the sake of incriminating myself I will not post it. Should I bring all this to the attention of the title company and/ or the Lender?

Reply by Chrissy/NC on 4/8/11 8:23am
Msg #379123

I would call whoever hired me and let them know about the for sale sign before I went in to the house for the signing. And since it is not law in NJ for the thumbprint I would not press that issue. In CA it is the law so I would refuse to go ahead with the signing and talk to whoever hired me about that situation. I always call the person who hired me with any questions and if you feel it is incorrect follow your knowledge about the law. As long as the DL is correct and the signature is the same you are doing good by just keeping a journal and covering yourself that way.

Reply by ME/NJ on 4/8/11 8:25am
Msg #379125

1. Thumb print not needed in NJ, why push the issue. Did you have a DL and SS card? if so you're good put that info in the book.

2. Not your concern about how many times they refied. Your job is to prove who they are, watch them sign paper work and ask if they understand what they are doing.

If you felt that uncomfortable then excuse yourself from the signing.

Reply by Linda_H/FL on 4/8/11 8:48am
Msg #379127

Re: Refi with House up For Sale?...

First, to answer your question, I'm not a lawyer but why wouldn't it be legal to refi a house that's on the market - they're probably trying to keep their heads above water long enough to sell - not saying they're going to make much of a profit on the whole deal but considering there's a subordination agreement included, this whole transaction has undergone closer scrutiny than most deals.

As for the rest....K.I.S.S. and Notarize, don't analyze....

If they've provided sufficient ID to satisfy your requirements for notarization, then you simply get the docs signed and notarize...period. There are probably many reasons for the situation you saw, and you weren't privvy to the history or circumstances of the *why* of it - the situation should have been researched by those with the largest stake in this - the lender and the title company (who has to insure the transaction)....

As for the thumbprint - if it's not required in your state (as it's not in FL) then they have every right to refuse (and in FL if they do refuse we can't refuse to notarize)....and although I don't disagree with your requesting the thumbprint, it really sounds to me like your recordkeeping protocol put the borrowers on the defensive.

If you wanted to peak my interest you did though...curious about this: "There was another redflag to me, but at the sake of incriminating myself I will not post it." Was this last red flag enough to tip you over the top as far as possible fraud?

If the whole scenario is a compilation of things put together, that's a whole different story. The refusal of thumbprints and the property on the market, on their own, IMO is not enough to make a stink. Unless there was some outright sign of fraud, I'd just keep it to myself.

MHO

Reply by NJDiva on 4/8/11 12:28pm
Msg #379159

Re: Refi with House up For Sale?...

Awesome, awesome feedback. Thanks everyone. I understand about it just being our job to get the sig's and that's it; however, isn't it ethically our responsibility to make sure no fraud is being perpetrated? Not that we're there to LOOK for it or to be investigators per se, but do we really just go in, record their information, sign doc's and that's it?

Sometimes (many times) their photos don't look like them. How do I know they don't have a twin? I heard recently that NY/NJ is one of the highest identify fraud (hmmm, is that the same as identity theft? I don't think so but did wonder...) area's in the nation. Why wouldn't I take due diligence to CMA? I've heard so much lately about us being taken to court that I'm probably being overly cautious. What can I say? I want the thumbprint to cover ME, not them, quite honestly.

I believe ethics and integrity (IMHO) are synonymous and therefore I make every effort to ensure the whole process, and my participation in it, is of the utmost standards (as I'm sure most everyone else does.) I take the responsibility of swearing to the legality of a person's identity very seriously. I don't want to be sued for, or accused of, not executing due diligence.

I guess really there's only so much we can do, huh?

Reply by 101livescan on 4/8/11 9:05am
Msg #379130

Sounds like the borrower is pretty versed on notary law in NJ and doesn't need to give thumbprint.

However, on the issue of the for sale sign, most packages I'm doing in CA specifically ask the borrower to complete a form that says there is no additional debt, the date they purchased the property and that the home has not been on the market for sale for the past 12 months.

So, sounds like this borrower is borrowing from Paul to pay Peter. Wonder what will come up in Fraudguard as they prepare to fund this loan. There are several screens that sift this final loan submission before it will be funded by lender. It's not a done deal yet! Credit checks, employment checks, LexisNexis, federal and state checks. Will be interesting. If you get paid for this gig, you'll know it was a go. If not.....well, something came up that halted funding.

Good luck. I think you took a big gamble on this one.

Reply by Julie/MI on 4/8/11 9:19am
Msg #379134

If you had been at my home and requested the thumbprint I would have declined and if you mentioned it again, I would have asked you to leave.

Also, just because a sign is on the lawn, you don't have a clue if it's really listed, sometimes it takes a while for the sign to be removed if a listing expired, and if it's a for sale by owner, maybe the borrower is trying to get a nibble.

Sometimes there are documents that ask if the house is listed for sale, and if the borrower lies about it, that's his fall. Thankfully, in my state, a notary is not liable if the signer lies.

Reply by Ilene C. Seidel on 4/8/11 12:33pm
Msg #379162

I agree with you Cheryl. I would have taken a photo of the for sale sign and sent it to the lender. That way I've covered my butt.

Reply by Larry/IL on 4/8/11 9:18am
Msg #379133

Thumb print is not required in IL as well, I never press the issue. I do explain it would be a good idea for their protection and the thumb print matches the signature, should their name ever be forged. Many times they will change their mind.

We NSAs are not the Mortgage police, we are not the police for the lenders or title companies. I would have to agree that questioning the legalities of mortgages outside what is required from a notary aspect should be left up to the attorneys and legal departments of the companies involved.

Reply by jfs/IL on 4/8/11 10:17am
Msg #379139

Thumb print is required in Cook County for Real Estate transactions.

Reply by Larry/IL on 4/8/11 10:22am
Msg #379140

Thumb print is not required in Cook, Kane, Peoria and Will counties unless ownership status is changing. Even then it's only required if title company doesn't not have an exempt certificate.

Reply by jfs/IL on 4/8/11 10:36am
Msg #379147

Larry, that's what I was referring to ownership change in status!!
Sorry I did not make myself clearer on the subjec.t

Reply by Bob_Chicago on 4/8/11 11:01am
Msg #379149

Actually, I believe that thumb print required only for

Residential ( 1 to 4 unit) Cook County property where the grantor retains no interest in
the property. With a few exceptions , only necessary in the event of a bona fide sale to a third party.

Reply by C. Rivera Chicago Notary Services on 4/10/11 9:03am
Msg #379364

no. thumb print is needed for ANY change in ownership

Not necessarily from a sale; for cook county property...its required on the notarial form...

Reply by C. Rivera Chicago Notary Services on 4/10/11 9:07am
Msg #379365

ONLY for cook county property...not for all counties... n/m

Reply by HARRY_PA on 4/8/11 9:50am
Msg #379135

I have often wondered why notaries press customers with requirements from other states because they think it is a good idea. Satisfy your responsibilities to your state. I know some states do not require registers, but I would keep one anyway in those states. It is no further stress on your customers and maintains that record if needed.

Harry

Reply by SharonMN on 4/8/11 10:09am
Msg #379137

I see no reason to worry about the house being for sale, unless there is a document in the package where the borrower is asked to certify that it is NOT for sale. As one other poster pointed out, they may be trying to sell the house and wanting a lower payment to free up cash flow while it's on the market. Perhaps they took some cash out to do some improvements to spruce the place up to attract buyers. Perhaps they already bought another house and have two mortgage payments each month. Perhaps they are just experiencing financial difficulties and are trying to be proactive and lower their payment and try to sell their house rather than just missing payments and waiting to be foreclosed upon.

I also wouldn't even ask for a thumbprint if not required in my state.

Reply by JanetK_CA on 4/10/11 4:22pm
Msg #379387

Valid point, Harry. It's one thing to request it, but pressing the issue is another altogether. Also, some of this is not even based on accurate information. For example, CA notary law does NOT require thumbprints on every notarization, just for transactions involving real property and, more recently, POAs.

As a general practice, I do ask for thumbprints for everyone because I think it's a good habit and good to have a routine. However, I have had someone refuse to give me a thumbprint once on a document that didn't require it, so I didn't make an issue out of it. The majority of the public here believe that a thumbprint is necessary, so they're automatically ready for it. The person who refused was from another country where people are sometimes distrustful of their government. [This was in a corporate setting on a document for his employer, a high-tech company. Not my business to do any more than what was requested of me.]

Reply by JandB on 4/8/11 10:12am
Msg #379138

As I pulled into a driveway for a closing I noticed a car with a Realtors sign on it was pulling out. When I went inside, I asked the borrowers if they had just listed their home for sale. They had. I called the title company and informed them of this development. They told me to leave so I did.
The title company hires us to be their eyes and ears. That's one of the reasons we have a job. All of my packages contain an affidavit of occupancy stating they intend to occupy the property for at least 1 year. It also states the same thing in the mortgage. While I might not be legally responsible for the borrower's lies, I have signed a agreement with the title company and/or signing service to keep them informed. They would certainly want to know about the obvious lie so they can make their own informed decision.

Reply by BrendaTx on 4/8/11 11:17am
Msg #379153

You are not required to take a thumbprint.

Have you checked with your sos to find out if they recommend it or discourage it?

The Texas SoS discourages it because Texas has a relatively new law that says that only certain entities with certain secure equipment should be allowed to retain biometrics. A thumbprint is a biometric.

Reply by NJDiva on 4/8/11 12:54pm
Msg #379164

Re: You are not required to take a thumbprint.

hmmmm, good point. Well, EVERY point MADE is a good point. Though I do make a deal about it I most likely won't in the future. Most people get surprised by it, but they do it anyway. And even though I KNOW it's not a requirement/law in my state (it's also not a requirement/law in my state to keep a journal either-that's my understanding anyway-but there is NO way I would be in this business without being able to CMA.) I still try and make it happen. I have a $1,000,000 umbrella on my house but I don't want to lose it. It's happening more and more. Better to be safe than sorry.

Reply by ME/NJ on 4/8/11 1:31pm
Msg #379168

If you're a corp or LLC no worries about house

You're protected it's a personal asset.NJDiva why not link your profile?