Posted by lindab on 11/23/11 5:58pm
Msg #404834

Just wondering

When you do a purchase closing do you explain the HUD line by line? I have been doing this for 6 years and never have. I was chastised today by a loan officer and realtor for not doing so. Am I wrong?

Reply by Mike Goodey on 11/23/11 6:06pm
Msg #404836

It is our job to explain what the doc is...I just tell the borrower that these are the fees you are being charged (without going through the entire document) It's the lender's responsibility to explain each and every line.

Reply by lindab on 11/23/11 6:07pm
Msg #404837

They expected me to go line by line on the HUD.

Reply by BBuchler/CA on 11/23/11 6:14pm
Msg #404839

I have never gone line by line. I ask the borrower to review the document and if they have any questions, I'm happy to answer what I can in terms of what something may mean. But I'm not the Loan officer and trying to explain "WHY" these fees are what they are is beyond my pay grade.

That's like asking us to go thru the Note or DOT and explain every paragraph. Start with a $500 fee and then we'll talk.

Reply by Yoli/CA on 11/23/11 6:32pm
Msg #404848

Same here. As a matter of fact, first thing I ask is if they've seen their HUD. Then, I hand them their HUD and ask them to review it while I fill out my notary journal. Further advise them that should they have any questions regarding their fees, they should contact their loan officer.

Barring any fee question and being done with journal, I show them the Note and read them the highlights, read them the vesting on DOT, show them their First Payment and TIL. If everything is good with those docs, everything else is just "boiler-plate" and we proceed.

We are not privy to their loan file. We are disinterested third parties and don't know what their negotiations consisted of or what terms they agreed to.

AND, we don't get paid the big bucks. If the LO and realtor want to split their commissions with me, I'd be glad to do part of their job.

Reply by Susan Fischer on 11/24/11 12:16am
Msg #404890

* * * * * Post, Yoli. Our job is to describe docs, not

explain docs. Point out pertinent terms and conditions; provide the number of the contact persons available to us for any necessary clarifications, and proceed through the stack.

(Being retired, I don't want to know enough to be privy, regardless the commissions - neither was I ever interested in those remote-doc-preparation 'opportunities.') jmnsho

Reply by Bee_CA on 11/23/11 6:20pm
Msg #404841

I say "These are your fees, your credits, your loan amount and the amount due"...that's it.

Reply by Buddy Young on 11/23/11 6:21pm
Msg #404842

No you don't have to explain every line.

I never have, I just say" this list's all your expences" and show them where to sign.

Reply by jba/fl on 11/23/11 6:25pm
Msg #404845

Sounds to me like they don't know what to say and are foisting on you. Since it is their baby, they should explain....either that or right at the beginning go to their fees and let the BO know that these are the fees the agents are making off you. LOL

I do go to that nice box on page 3 that outlines all the important terms of the transaction and ask them if that is what they were expecting. IF the LO is there, that is their job. I can explain, but I defer to the LO/Realtor.

Reply by LKT/CA on 11/23/11 7:15pm
Msg #404854

I would say to the LO and Realtor: "I'm seeing the HUD for the 1st time, and ONLY time while YOU'VE worked with the borrower through this process for months. I have no knowledge of your discussions and negotiations throughout the number of months it took for this loan to come to finality so how is it that *I'm* supposed to go over the HUD line by line when I have no idea of your discussion with the borrowers? Explain THAT ONE to me?

Reply by Karla/OR on 11/23/11 8:24pm
Msg #404865

All good advice! Thanks everyone! n/m

Reply by Julie/MI on 11/23/11 8:54pm
Msg #404873

Realtors and LO's are used to real title people performing closings. When they have "just a notary" that's what they get and I DO feel the mortgagor deserves a little more than that.

I was trained in purchases and had to explain each line of the HUD, that I personally prepared.

So are you wrong? Probably not, but the expectation is that the "closer" should explain each line because that's how it's done by a title company employee. So you didn't meet the expectation because you didn't do what is normally done.

Reply by bfd110_IN on 11/23/11 9:40pm
Msg #404877

Thank you Julie!! i know i am going to get hammered on this

I was floored when I read this. This is my opinion and my opinion only. First of all, in the state of Indiana you are required to have a Title Producer License. Long story short, you have that cause you touch the settlement statement so you should be able to explain it and should. I always ask if they have seen it before or if it has been gone over with them prio to me arriving and if they have any questions. If they have none, I ask them to verify the bottom number and have them sign. If they haven't been shown, then i go over with them each line with a dollar figure. Really feel it is a disservice if we don't go over it. We are professionals and should do this. If you are asked why certain fees are the way they are, of course we have no idea so that would be directed to the L.O.

My closings usually average 30 minutes to 45 minutes so by me doing it, it doesn't add any additional time.

But give me a break.. if I followed some other notaries business model they have, might as well just throw the papers in front of the borrower and say " Go to it. I am just a notary. Don't ask me any questions."

Reply by jnew on 11/23/11 10:41pm
Msg #404879

Re: Thank you Julie!! i know i am going to get hammered on this

It is very difficult for someone who is not or has not been a loan processor or closing agent to explain the HUD line by line. Those are the two people who are most involved with preparing a HUD one, and without the experience of preparation it is very difficult. A lot of real estate attorneys will go through the documents with their clients but will leave the explanations of the HUD one to the closer. Even if you have the experience, if you are a notary, you really might not understand the reason for a certain charge to either appear or not appear. I think the problem is real because a realtor wants the customer to fully understand the deal. Realtors can explain the buyer/seller charges and credits but don't want to have to explain the lender's sections to the buyer. Many times there is no l/o at the closing and the title company/settlement agent has hired you to present the documents on their behalf. Many settlement agents/lenders/signing services require you not explain the HUD 1 so that the notary does not make assurances that they have to cover. My opinion is that if you are discussing the items on a HUD 1 to a borrower, you are representing an expert opinion. If you say something on which the borrower relies, you may be held liable for your explanation.
If later, there is a legal matter over the fees shown on the statement, you might be subject to liability because you were the one who discussed the fees with the buyers. I would make it known to the buyers that the charges shown are the domain of the lender and settlement agent and that any questions require direct answers from them to the buyers. On sales, you can require that the buyers are given an opportunity to see the HUD 1 prior to the signing or else it is please sign here and realtor and l/o will have to live with it.

Reply by Roger_OH on 11/23/11 10:53pm
Msg #404880

If that's what you have to do with a TPL...

then fine. But that's not the case in the vast majority of other states. In most every purchase closing I've done, the buyer has had the essentials of the HUD noted (or already provided) to them by the LO or broker when told how much their check should be for.

I always give the latest HUD to the agent(s) and ensure they are OK with it, and then make sure the check matches the HUD amount. If they have any qustions, I let the LO/broker handle them.

There'sa difference between "describing" a doc, and "explaining" it. On the note, I show them
their interest rate, term, payment, first payment date, and that they don't have a prepayment penalty. As long as they are OK with the numbers, there's no need to go thru each individual paragraph. Same with the other docs.

Reply by bfd110_IN on 11/23/11 11:25pm
Msg #404883

Re: If that's what you have to do with a TPL...

I feel you are exactly right on a purchase transaction Roger. knock on wood, When I have gone into a purchase transaction, 95 percent of the time either the loan officer or the agent has gone over it with the borrower because of funds to close. But I have been there where all the purchaser was told. " Here is the amount of funds you need to close and make certified funds payable to XYZ" and if I am there representing the title company, guess who they expect to explain the settlement statement.

Now I know the original start of the link was a purchase but what would you do with a refinance transaction? Go over it with the borrower or just throw it out there and say " Review this for me and sign?"

I agree with you on the note. The only thing I add is the late fee term. FHA/VA is 4 percent versus 5 for a conventional and some lenders will have a 10 day grace versus a 15 day. Will vary based on a portfolio loan or one being sold to Freddie/Fannie or loan program type and I feel they need to see that cause it might be different then what they had in the past.

Reply by Dennis_IN on 11/23/11 11:28pm
Msg #404885

I agree. We are professionals. Hey Scott.

Having worked for a a Title company as a closer back in 2002, I prepared the HUD and closed the loan. Remember those days? It was crazy. I ask the borrower if they have seen the HUD, if so they get the brief section description and then there is the investor, they just want to sign quickly. Those were the ones you had to be carefull not to make a mistake. The majority of closings involve people that need the full blown description of the docs. I do cover each line of the HUD (It may add 2 minutes to the closing). You control the closing by how you explain the docs. After explaining the HUD I give them a short blurb about every document. People want to know what they are signing. It helps the keep the BO focused. How many times has a Real Estate agent tried to take over a closing by pointing out this or that. I control the closing and it gets over sooner. And everyone is happy. Isn't that the ultimate goal.

Reply by MikeC/TX on 11/23/11 11:35pm
Msg #404886

Re: Thank you Julie!! i know i am going to get hammered on this

TPL or not, how on earth can you explain a HUD-1 in detail if you had no involvement with processing the loan???

It's not a question of being "just a notary" - anyone doing this job should be familiar with the documents and be able to DESCRIBE what they mean. Explaining what the individual lines on a HUD-1 mean on a specific loan requires knowledge of the loan - that's WAY outside the scope of a notary's responsibility, even if they have a TPL.

And as soon as you start going from the general facts about loans to the specific details of the loan in front of you, you may be crossing the UPL line - and in these case, UPL probably trumps TPL every time.

Reply by jba/fl on 11/24/11 12:22am
Msg #404891

Totally agree Mike - which is why I said that the LO

should present when I defer to him/her. The HUD is a make or break deal - why would the LO, lender and/or realtor want to risk it.

I can read aloud, point to where things are, but I cannot explain. I've been at the purchases where HUDs are revised over and over at the table. Purchases - the buyer puts down the pen and the deal is done, there are no second thoughts, no 3 day 'change your mind.'

Reply by bfd110_IN on 11/24/11 1:35am
Msg #404894

Where does UPL come into reviewing HUD-1 with borrower

Has nothing to do with processing a loan. You are showing them a document on what they were charged. Just as you would show them the note to show them what interest rate they were charged.

How is it UPL when a line item says Line 803 is marked appraisal and it shows a fee for 400 and you show that to the customer? The customer ask why was I charged 400.00 and you refer them to the L.O.

How is that different than me saying your interest rate is 4.375 and the customer saying How did they get that and you refer them to the L.O.?

I am missing something here. An opinion wasn't given. Great now I am going to jail cause I go over the Settlement Statement and when they have questions I refer them to the L.O. Easiest thing to do is throw it in front of the borrower and say "Read it. Don't ask me questions."

Reply by Dennis_IN on 11/24/11 9:28am
Msg #404910

Re: Where does UPL come into reviewing HUD-1 with borrower

No UPL here. We are reviewing the HUD not explaining the reasons for the charge. Don't worry, be happy. Continue providing the high level of customer service the borrower deserves. If someone wants to point and grunt that's their business.

Reply by Les_CO on 11/24/11 10:47am
Msg #404923

I agree with Julie and bfd.
I seldom go over the HUD line by line but I can, and will if asked.

Reply by MikeC/TX on 11/23/11 11:19pm
Msg #404882

Explaining the HUD-1 line by line is never your responsibility - you don't know anything about the loan, so how are you supposed to explain it?

You had the misfortune of dealing with a lazy loan officer who is expecting you to do do his/her job. It don't work that way...

Reply by Dennis_IN on 11/23/11 11:36pm
Msg #404887

I hate to do LOs job too. But you are not explaining the document. You are reviewing it with the borrower. I agree, the LO should have gone over HUD with Borrower; but again, you are only pointing out the information, you are not expaining "why" it is what it is. I try to control the closing by how I cover the documents with the borrower. Again, they like to know what they are signing.

Reply by Linda_H/FL on 11/24/11 8:36am
Msg #404907

Mike, I'm going to disagree with you here..

No need to know anything about the specifics of the loan to know "this is your escrow for homeowners' insurance"; "this is your escrow for property taxes"; "this is the appraisal fee"
Line by line review - and note I said REVEIW - is not UPL and should be our job if the client desires that level of service. Especially in the case of a purchase where most times funds are due from the buyers AND immediate funding is the norm. What we CAN'T do is tell them WHY the numbers are what they are - that's up to title or LO.

I generally let them look the HUD over with the procedure I outlined in the subsequent thread about this, but if the buyers/borrowers have specific questions I will go over it with them to try to help them find their answers. It's just customer service and, IMO, part of the job.

Reply by Buddy Young on 11/24/11 12:36am
Msg #404892

I did a closing once where the amout for me to collect was different on two seperate documents.

I noticed it and told the borowers that the HUD1 was the one we had to go by. They said the other number was the correct one. So they called the lO and he sent them a new HUD1 with the numbers they wanted.

I didn't check to see where he put the extra money but I'm sure he just juggled the numbers.

Reply by ReneeK_MI on 11/24/11 7:43am
Msg #404901

IMO depends on how you advertise yourself

There are different types of NSA's, providing different levels of services. The spectrum goes from those who limit their services to strictly notarial service - to those who provide contract closings. Actually, the spectrum could go so far as to include independent settlement providers, I guess. Point being - what YOU provide is entirely up to you, but do consider that the full spectrum does exist, and that often enough the other parties present in a transaction might have had different expectations.

There is no standard, except the one you set for yourself.

If a person provides limited, 'witness only' loan signings (point 'n sign) - they should clearly make that distinction within their advertising.

If a person advertises things like being "expert" with loan documents, "highly experienced" with real estate transactions, etc ...it implies a greater level of services, and it sets a different expectation. IMO, you are only "wrong" if the service you provide is less than what your advertising holds it out to be.

Reply by Dennis_IN on 11/24/11 9:21am
Msg #404909

Re: IMO depends on how you advertise yourself

I totally agree. I market myself as a Signing Agent whom is "highly experienced" with real estate transactions, etc ...it implies a greater level of services, and it sets me apart from other closers. Having worked for a TC and I know when there is an error in the docs and I pride myself in being able to bring it to the attention of the hiring party (TC) for either clarification or correction BEFORE the actual closing. As you know, something as simple as a missing middle initial on MTG could result in a resign if I don't catch it. Sometimes I wonder about the level of expertise of the TC employees preparing the HUD... This level of confidence comes with experience. I read an article in our newspaper yesterday where an auto mechanic fixed a guys car in 15 minutes and the guy complained about the cost. The mechanic replied that he knew how to fix the problem and that was what he was paying for. If only the SS & TC's realized that...

Reply by Eva75Eva on 11/24/11 7:58am
Msg #404903

This is why I do not do purchase closings anymore. The

treatment you receive from the realtors and loan officers can be abusive. I pride myself in being professional and am able to point out key information on the HUD but I am not paid to act as a title agent and explain away the figures on each line.

At one particularly difficult purchase closing I was labeled as unprofessional because I would not go over the HUD line by line and had practically everyone in the room (buyers, sellers, realtors, extended family-in some cases) rolling their eyes at me. The realtor even suggested that I tell the title company not to send out "just a notary" to conduct this type of closing. It was all I could do to keep my composure and make sure all the documents were executed properly. I got through it by thinking over and over "I am NOT doing this again!"