Posted by Jodie Blanco on 12/16/11 10:38pm
Msg #406867
Certifed Signing agent/real estate agent
I heard something today that I didnt know the answer to and was wondering if someone knew. I was told that a Real Estate agent couldnt do loan closing signings. Im in California. Does anyone know if that is true? Is it just on the loans that the agent does or on all loans?
| Reply by Joan Bergstrom on 12/16/11 10:54pm
Msg #406868
Re: Certified Signing agent/real estate agent
CA doesn't deem that a "direct beneficial or financial interest" and yes, you can notarize for your clients.
| Reply by Jodie Blanco on 12/17/11 1:32am
Msg #406872
Re: Certified Signing agent/real estate agent
Thats what I thought but wanted to check. Thanks for the response
| Reply by Linda_H/FL on 12/17/11 8:57am
Msg #406880
Re: Certified Signing agent/real estate agent
How can CA say that a real estate agent does NOT directly benefit from the successful closing of the loan related to their transaction?? They most certainly do!! Especially when the real estate agents, many times, direct their buyers to mortgage brokers/lenders and specific loan programs, helping them get their financing in place.
I'm sorry, but if it were me in CA, I wouldn't notarize for my own closings....that's too close to a conflict of interest IMHO
| Reply by 101livescan on 12/17/11 9:37am
Msg #406883
When I was a loan officer for RBC Mortgage, I was prohibited by Corporate from signing my own client's loan documents. It had to be another notary from an unaffiliated escrow/title agent.
I had occasion to notarize some client documents for Century 21, they were making the purchase and the loan for the client. The client remarked, how greedy, aren't they happy with just the sales commission, do they have to gouge me for the notary signing fee with all these extraordinary costs to originate my loan? Of course, that was back in the days....
As long as a realtor or loan officer does not have a financial or beneficial interest in the transaction, they may be the notary in the transaction, and charge a fee for their notarial services. As I said in the first paragraph, the client may not be wildly impressed that the fee is being charged in addition to the yield spread premium and/or sales commission.
I think today people are looking at loan costs even closer, I've had clients at escrow tell me they thought they were being gouged for notary fees. I tell them well there are 12 notarizations and that is $120, escrow is only charging you $100. Do you think the notary should work for free? It is a law that clients be charged for notary fees in CA. It's usually the Montecito high rollers that want free notary work. One guy said, I can get a notary to do this for free, and I say, well, that notary may be your employee, but is not approved by XYZ to provide that service for you on this loan.
| Reply by Buddy Young on 12/17/11 11:53am
Msg #406886
"It is a law that clients be charged a notary fee in CA."
No it's not, read your handbook. You can do it for free if you want.
| Reply by Ali/IL on 12/17/11 2:06pm
Msg #406893
I can see signing for a transaction that is not yours but, on your own I don't think it should be done.You would have a financial interest in it.
| Reply by 101livescan on 12/17/11 3:09pm
Msg #406895
Let me amend that, as I sometimes do not charge when I notarize general notarizations, unrelated to loan documents, grant deeds, quit claim deeds and interspousal transfer deeds.
Most sets of loan documents have two or three forms that must be notarized. Usually the settlement or escrow agent will arrange for clients to sign these forms at their office and charge a notary fee as prescribed by California law. The Department of Insurance which regulates Title and Escrow companies, regulates that notary fees will be charged, and these are as a rule disclosed on the GFE.
| Reply by Yoli/CA on 12/17/11 5:06pm
Msg #406904
Cheryl ... if I'm wrong, someone please correct me ...(long)
State of California does allow notaries to charge up to a certain amount (set forth in our handbook). However, notary is not mandated to charge and collect those fees.
Department of Corporations (not Department of Insurance) regulates Title and Escrow companies. As far as I could find, DOC requires DISCLOSURE of certain (including notary) fees per B&P Section 10241. What I could NOT find ANYWHERE was ANYTHING that stipulated that said fees be charged -- only that they be disclosed. In essence, if the listing is there and there is no fee, it could be left blank or insert a -0-.
====
As to OP's question, my personal opinion is that realtor and/loan officer both have a vested interest in said particular transaction as they will reap their commission(s) from the closing.
Per California Handbook (specifically second bullet):
Conflict of Interest
A notary public is not prohibited from notarizing for relatives or others, unless doing so
would provide a direct financial or beneficial interest to the notary public. With California’s
community property law, care should be exercised if notarizing for a spouse or a domestic
partner.
A notary public would have a direct financial or beneficial interest to a transaction in the
following situations (Government Code section 8224):
• If a notary public is named, individually, as a principal to a financial transaction.
• If a notary public is named, individually, as any of the following to a real property
transaction: beneficiary, grantor, grantee, mortgagor, mortgagee, trustor, trustee, vendor,
vendee, lessor, or lessee.
A notary public would not have a direct financial or beneficial interest in a transaction if a
notary public is acting in the capacity of an agent, employee, insurer, attorney, escrow holder,
or lender for a person having a direct financial or beneficial interest in the transaction.
If in doubt as to whether or not to notarize, the notary public should seek the advice of an
attorney.
In my opinion, both a realtor and/or loan officer fall under the classification of vendor. They're each selling a product: property and/or financing.
============
Again, both of these are JMHO.
| Reply by jba/fl on 12/17/11 5:50pm
Msg #406911
Re: Cheryl ... if I'm wrong, someone please correct me ...(long)
My take on this: she is referring to TC's only here and is being very specific regarding their rules. If I am wrong, Cheryl will correct me...
| Reply by LKT/CA on 12/17/11 6:55pm
Msg #406914
Re: Cheryl ... if I'm wrong, someone please correct me ...(long)
I believe the Dept. of Corporations regulates escrow companies and the Dept. of Insurance regulates Title *Insurance* Companies - we refer to them simply as TCs - Title Companies but they are Title *Insurance* Companies so they are regulated by the Dept. of Insurance.
Realtors (real estate salespersons) are not vendors - they are agents of the R.E. Broker. When someone enlists the services of a R.E. salesperson to buy or sell real property, the buyers/sellers contract is actually with the Broker - not the Realtor/R.E. salesperson. The IRS sees R.E. salespersons as independent contractors while the Dept. of Real Estate says the R.E. salesperson is an employee of the Broker. Therefore, the R.E. salesperson is not a vendor.....the Broker is. The BROKER benefits directly from the R.E. financial transaction - the R.E. salesperson benefits INDIRECTLY, as the broker's agent. The broker gets paid - then pays his/her agent. A R.E. salesperson cannot sell real property without their license being under a broker - UNLESS - the R.E. salesperson is selling their own home. That's the only way anyone can sell real estate without a license - if they are the owner as in "FOR SALE BY OWNER".
I have a CA R.E. salesperson's license.
| Reply by LKT/CA on 12/17/11 8:13pm
Msg #406931
To clarify
From the handbook: "A notary public would not have a direct financial or beneficial interest in a transaction if a
notary public is acting in the capacity of an agent, employee, insurer, attorney, escrow holder,
or lender for a person having a direct financial or beneficial interest in the transaction."
This is true. A R.E. salesperson (i.e. R.E. agent) who is a commissioned notary public CAN legally notarize the borrower's signatures on the loan docs for his/her OWN DEAL because the person having the DIRECT financial or beneficial interest in the transaction is not the R.E. agent, but the R.E. BROKER. The contract for real property is between the clients and the BROKER.
Just because someone *can* doesn't mean they *should*......each R.E. agent who is also a notary must decide for themselves. But it is legal to do so. Personally, I would NOT notarize for my own R.E. deals - that's just ME.
| Reply by Jodie Blanco on 12/17/11 9:47pm
Msg #406934
Re: To clarify
To clarify my question I wasnt meaning my personal sales. I was told by a loan officer that because I am a real estate agent I can not notarize any of their transactions. I was wondering if maybe it was just their policy or law that I cant notarize any loan docs. I would look to someone else to notarize my transactions just to be safe but dont see an issue notarizing others.
| Reply by GF_CA on 12/17/11 11:47pm
Msg #406941
Re: To clarify n/m
| Reply by LKT/CA on 12/18/11 9:18am
Msg #406951
Re: To clarify
<<<I was told by a loan officer that because I am a real estate agent I can not notarize any of their transactions.>>>
Sounds like that company's policy that R.E. agents cannot notarize any of *their* loan docs but it is certainly permitted by CA notary law. Since R.E agents have connections to other lenders, maybe this loan officer's company is concerned that the notary (R.E. agent) may try to market to the borrowers, telling them they "know where they can get them a "much better deal".........
| Reply by jba/fl on 12/18/11 9:33am
Msg #406952
Re: To clarify
And some just prefer to err on the side of caution; they want no thoughts of impropriety concerning their company.
| Reply by LKT/CA on 12/18/11 10:06am
Msg #406955
Re: To clarify
I too preferred to "err on the side of caution....also wanted no thoughts of impropriety - in that other thread and got blasted for it. Interesting <at least to me>...
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