Posted by Mdene_AZ on 12/5/11 4:55pm
Msg #405825

Errors and Omissions

Has anyone ever been denied insurance or had a company drop you, because someone filed aginst you?

Reply by Linda_H/FL on 12/5/11 5:17pm
Msg #405827

I've never had it happen to me...but I've heard it

happening. It's just like homeowners' insurance or car insurance - claims will increase your risk factor and the company has the option not to renew or to deny coverage to minimize their exposure.

Reply by Mdene_AZ on 12/5/11 5:22pm
Msg #405828

Re: I've never had it happen to me...but I've heard it

Thanks. it happened on the RTC. one signer had dated correctly, the other one made some kind of mistake in the date.

Reply by Linda_H/FL on 12/5/11 5:26pm
Msg #405830

Someone made a claim against you for that?

Unless it was Signing Agent E&O....if it was just regular notary E&O, there's no coverage.

Reply by jnew on 12/6/11 9:22am
Msg #405861

Re: I've never had it happen to me...but I've heard it

Somebody would have to explain to me the theory by which a signing agent would be legally responsible for an erroneous date entered by a borrower on a document. If there is no certification by the signing agent, could the signing agent be held legally negligent?

Reply by Linda_H/FL on 12/6/11 9:36am
Msg #405862

As a signing agent, aren't you responsible for the

correct execution of the docs - IMO that includes dating. It's up to the SA to get them done correctly and if the error can be tied to the SA's negligence or oversight, and that negligence or oversight prevented the loan from funding or cost the borrowers their rate lock or additional funds, IMO the SA is on the hook.

Unfortunately, standard Notary E&O Insurance won't cover this.

Reply by CinOH on 12/6/11 9:39am
Msg #405864

RTC is not a notarized form so how could you have made an error that would allow for a E&O claim? I'd contact an attorney.

Reply by MW/VA on 12/6/11 9:42am
Msg #405866

I'm curious on this, too. Did they file a claim against

you based on that? That's a real stretch for a claim on E&O, IMO. Standard Notary E&O Insurance wouldn't cover anything related to SA work, anyway.
Care to elaborate on the situation?

Reply by Victoria_NJ on 12/9/11 7:26pm
Msg #406186

Sounds like a "Kitchen Sink" action

Who is trying to sue you, the Lender? The Title Agency? The Borrower?

I once had a claim filed against me personally as the witness only notary on a refi THREE years after it closed. They also named the lender, the broker, the title agency and their underwriter. (kitchen sink)

Their claim was that "everyone who was involved should have known they didn't want to pay off the 2nd loan that was mandatory in order for the new loan to fund"

Um, yeah, like EVERYONE knew that? And if that WAS the case, then why didn't they rescind the loan within the 3 days?

Long story short, the case didn't even get to court since their claim wasn't provable. (And apparently the attorney taking their case wasn't too bright to figure that out from the get-go)

In many states, if the notary has been contracted as a third-party contractor, it is usually the company that is acting as escrow/closing agent who is ultimately responsible for all acts of their company, including a notary that was contracted through a SS.

Additionally, depending on the state, signing companies that work solely with title agencies are unable to get independent E&O b/c the E&O insurers consider it double-indemnity, since if the title agency is acting as settlement agent, they are responsible for all acts taking place at closing.

This is why many Lenders require Closing Service Letters or Closing Protection Letters from the title agency wherein a title agency or approved attorney is conducting the closing and handling funds. In those 2 scenarios, the closing entity is responsible for EVERYTHING that is signed at the closing.