Posted by Mary Ellen Elmore on 2/5/11 8:29am
Msg #371645

What do you think about this advice?

On another notary site , they have a blog entry about collecting money from deadbeat companies along with a sample letter.

Some of the advice is pretty reasonable.

I would really like to hear some of y'all's opinions on some of what is said there though.

Under the sample letter it says, "Also, cc: an attorney at the bottom of the letter. If you don't have one just find one out of the phone book."

Further down it says, "By law we are required to charge a certain fee so if we're unable to collect it, would that nullify them in any way?"

"I was speaking with another fellow notary the other day and she shared with me a fantastic idea she and a few others are doing to help insure payment from companies in the event the borrowers cancels, etc. The idea is to have a document that the borrower would sign at the time of closing that states that if the loan doesn't go through for any reason then they are responsible for payment of all notary fees. Now I don't know if this violates any RESPA laws or any other law, but, it seems to me that if the appraiser can get paid then we should be able to as well. We are both subcontractors. And we all know the appraiser always get his/her money regardless to the outcome of the closing. What do you guys think about this?"

I am holding my opinions until I hear from some of you.

TIA

Reply by Linda_H/FL on 2/5/11 8:40am
Msg #371647

"Under the sample letter it says, "Also, cc: an attorney at the bottom of the letter. If you don't have one just find one out of the phone book."

And what happens if they decide to contact that attorney? There goes your credibility - right out the window. IMO this is a silly thing to do.

"Further down it says, "By law we are required to charge a certain fee so if we're unable to collect it, would that nullify them in any way?"

No we're not *required* to charge - we can notarize for free if we wish - the only way we're regulated is in how MUCH we can charge per notarization/signature. Another silly statement.

As appealing as it is to have the borrowers sign a document that they'll pay you no matter what, I think this MAY be a violation...my understanding of RESPA law is all funds associated with the loan MUST be disclosed on the HUD either paid out of settlement proceeds or noted as POC (paid outside closing) - Yes the appraiser gets paid but that payment is noted on the HUD.....I also believe there are regulations about side agreements for payments (still sipping coffee so not awake enough to research it) If we could have borrowers sign a doc that they'll pay us no matter what, we'd be able to have them pay us at the table and..poof...no collection problems.

I think I know where you got this and I, for one, take this all with a small grain of salt. I'm not impressed with the collection letter as I also think, somewhere or at one time, it contained a threat to go to the borrower for the past due funds....

My .02 FWIW

Reply by Ilene C. Seidel on 2/5/11 8:42am
Msg #371648

This has been discussed in previous strings. The borrower didn't hire us the title/signing company hired us. I don't see how the borrower could be liable to pay us and further more even if it were ethical we would have as much difficulty getting paid from borrower as the hiring party.

Reply by Mary Ellen Elmore on 2/5/11 8:44am
Msg #371649

Ilene--Re: What do you think about this advice?

What about the other statements?

Reply by Ilene C. Seidel on 2/5/11 8:50am
Msg #371650

I've sent a collection once in the 11 years as a closing agent and yes I did have an attorney's name at the bottom of the letter as cc, however I'm in agreement with Linda you better know the attorney and alert him/her you've cc'd the letter.

As for the "By law we are required to charge a certain fee" I'm not sure what that refers to?
I think it's very vague.

Reply by jaxson on 2/5/11 8:51am
Msg #371651

A title company that I work directly with has a document that says the borrower will pay notary fee if they cancel the loan.

Reply by Mary Ellen Elmore on 2/5/11 8:56am
Msg #371652

I have seen that letter a few times also.

The thing is this--that same company has in our confirmations that if the BO cancels we only get half pay but the letter the BO signs says they will pay the notary fee in full and that it will be paid to the notary.

Contradictory.

Reply by Karin Konseck on 2/5/11 10:19am
Msg #371664

Brilliant idea!! Now, let's investigate...hmm, where do we start?

Reply by parkerc/ME on 2/5/11 10:20am
Msg #371665

Agree with Linda's take. However...

I've used a lawyer's name as a cc: many times for varying reasons, but I don't include an address for same in the cc notation (she/he exists only in my imagination!).

Reply by GOLDGIRL/CA on 2/5/11 1:22pm
Msg #371676

Re: Agree with Linda's take. However...

This is in every package from one TC I work with:

"The principle (seller/buyer/borrower) hereby acknowledges full responsibility for the signing service/notary fees should the transaction be cancelled or no close." (Try to ignore the huge grammar goofs bordering on a serious lack of knowledge of the English language). It continues: "We the Seller/buyer/borrower hereby release and indemnify so-and-so for any responsibility of payment for signing service/notary fees should we cancel this transaction or it not close for any reason." This is a notarized document, by the way.

Here's another from a major TC: "Buyer(s) here agree (guess they left off the "by" on "here") that the mobile notary sign-up has been arranged as an accommodation for the parties herein. In the event the escrow transaction cancels, Buyer(s) herein agree to handle payment in full outside of escrow with the notary company directly. Buyer(s) hereby indemnify and hold harmless escrow holder and title company of any financial or legal obligation in conneciton with said accommodation arrangement."

In both of these "we're not payin' the notary if you or your lender bails", it looks like the SS we work for has to go after the fee - and I have never heard of a SS doing that. And I don't see that it gives us the go-ahead either to get our fee directly - but I suppose one could try. Probably be a huge waste of time.

If you're ever going to involve the borrower, here's what I would do (and have): On the final demand letter once step away from small claims court, say that you are filing by such and such a date and that when you do file, everyone involved in this transaction will be notified in writing that legal action has been taken, including the buyer/borrower, the lender, TC, broker, HUD, SOS, Department of Insurance, etc. (I think I threw in the FBI internet fraud address, too). This only makes sense to me. If someone filed suit about something in which I was a participant (however unobligated I might be) I still would at least want to know. But that's just me. None of the people on this list could care less if we get paid, but then that's not the point. I've used this letter twice and got paid, so I didn't never had to move on to small claims

Reply by Michael Gilman on 2/5/11 2:52pm
Msg #371685

Re: Agree with Linda's take. However...

Issue with having the borrower's pay for this would be RESPA, it clearly is a violation of RESPA (I am not an attorney ...) As for the putting of an attorney's name at the bottom, I just put CC:Atty without even putting a name. The most effective letter I have written informs the Signing company / title company that I will be sending a letter to the lender if not paid within 10 days. I also remind them of the $25.00 late fee for each 30 days they are late. So far so good, although I may not always get the additional amount I am happy to get the original amount and then not work with them any longer.

Reply by GOLDGIRL/CA on 2/5/11 3:03pm
Msg #371686

Re: Agree with Linda's take. However...

I like your idea about the $25 late fee!

As far as the Real Estate Settlement Procedures Act goes re the borrower paying the notary fee - it's interesting that two (that I know of) major TCs would mandate in their documents that borrowers are liable for notary fees when the loan cancels if this would be a violation. Can you refer to the RESPA section where this might be?

Reply by LKT/CA on 2/5/11 8:03pm
Msg #371700

I have used that sample letter you speak of - with some tweaking. I excluded the borrower part and replaced it with an attorney's info - one I know (networked with) and got permission to use his name and contact info. He offered to review the demand letter free and was willing to print it on his office letterhead. The letter worked and I received payment from the deadbeat.

I'm not up for having borrower's sign anything holding them liable if the loan cancels. I'll just go after the hiring party, via their regulatory agency if they are unresponsive to my demand letter. Overall, I like the way the letter is worded.

Reply by GOLDGIRL/CA on 2/5/11 8:48pm
Msg #371706

It's not up to us as to whether the borrower signs that they are liable for the notary fee if the loan cancels. These are title docs with signature lines - and one title company requires the signature(s) be notarized.

Reply by Linda_H/FL on 2/5/11 8:58pm
Msg #371711

Isn't notarizing that a conflict? And I think we've batted

this topic around a bit before....

To me, how can a notary notarize a document that promises to pay THEM if they back out of the loan. The notary has a financial interest in that document.

Not to mention, I feel funny asking borrowers to sign this as I think it can be very intimidating and they may take it as coercion - "well, keep in mind if we cancel the loan we still have to pay the notary" - and the RTC states they can cancel within 3 business days and be under no obligation and all funds paid will be reimbursed.

right?

Reply by LKT/CA on 2/5/11 9:02pm
Msg #371713

<<<It's not up to us as to whether the borrower signs that they are liable for the notary fee if the loan cancels. These are title docs with signature lines - and one title company requires the signature(s) be notarized.>>>


From the OP:

"I was speaking with another fellow notary the other day and she shared with me a fantastic idea she and a few others are doing to help insure payment from companies in the event the borrowers cancels, etc. The idea is to have a document that the borrower would sign at the time of closing that states that if the loan doesn't go through for any reason then they are responsible for payment of all notary fees.

I understood the OP's post to mean that a *fellow notary* was the one drafting a document for the borrower's to sign - not a document the TC generated as part of the loan doc package. If the TC has generated this document, then of course I would present it to the borrower as I would all other documents in the loan package. However, I would not (myself) create a document of such. That is what my post meant.

Reply by GOLDGIRL/CA on 2/5/11 9:18pm
Msg #371716

Oops, sorry. I lost track of what the OP was saying. You're right, and I wouldn't ever create such a document myself, either. Actually, now that I read the original post again, it's kind of confusing. The "fantastic idea" the fellow notary had was to insure our payment "from companies." So how could having the borrower sign the notary's own personal liability form get the notary paid from whoever hired us? Is the SS/TC going to enforce this? I don't think so ...