Posted by GOLDGIRL/CA on 2/14/12 3:34pm
Msg #411742

Another unsolved mystery of the world

Why, oh, why do lenders require borrowers' initials on the same page that requires complete signatures?!?!? For what possible purpose?

Reply by Lee/AR on 2/14/12 3:35pm
Msg #411743

just to mess with you

Reply by GOLDGIRL/CA on 2/14/12 3:40pm
Msg #411746

Thanks, Lee. That clears things up and makes me feel so much better!

Reply by Karla/OR on 2/14/12 4:09pm
Msg #411752

Excellent question and answer! Hope you don't mind if I add my own unsolved question via your thread: why there is only a place for ONE of the TWO borrowers initials at the bottom of the page???????? There could be a good reason and I don't know it.

Reply by CopperheadVA on 2/14/12 4:10pm
Msg #411754

Must be a Chase loan... n/m

Reply by Frances Kany on 2/14/12 4:30pm
Msg #411760

probably because they use a template and just populate the form with borrower's info. the original template probably did not have space but for one borrower and the worker bee that fills the form in either doesn't know how or doesn't take the time to change it.

Just my opinion.

Reply by Karla/OR on 2/14/12 4:50pm
Msg #411764

Thank you for your replies. I am one for more vs. less so I have always had both initial the spot. It feels good to have confirmation for your posts that I have been making the right decision.

Reply by Karla/OR on 2/14/12 4:51pm
Msg #411765

Sorry, should be "confirmation FROM your posts" . . . n/m

Reply by Saul Leibowitz on 2/14/12 6:37pm
Msg #411778

One line for all borrowers to initial

On the mortgage and note most software will not present two lines; as you know from experience the mortgage and note are absolutely unfailingly standarrd for each lender and usually the same as any other lender. Only the names and amounts and addresses and dates are inserted; therefore the template only has one skimpy line.
Just smile at the borrowers, tell them they can initial above and below each others' initials instead of trying to squeeze the initials into the spaces provided.
Initials on a page that is also containing a signature line is completely a function of whose software is being used by the lender (e.g., the tax forms sometimes need to be initialed on all pages, sometimes only the pages not bearing a signature and sometimes no initials at all).
Best answer I have after years of doing this and also, once upon a time, working for a lender.

Reply by GOLDGIRL/CA on 2/14/12 6:42pm
Msg #411781

Re: One line for all borrowers to initial

The question remains: Why?

If a borrower signed but did not initial lthe same page, would the lender go berserk and not fund? On what grounds? Because they say so? Because the document is invalid unless it contains both signatures and initials? Because the lender wants to make suire the borrower didn't lose focus between signing and then initialing? None of this makes any sense - even for a lender.

Reply by Saul Leibowitz on 2/14/12 6:48pm
Msg #411782

Re: One line for all borrowers to initial

They may refuse to fund because it is their form and it is their money; it is just simpler to be careful.
Also, some TC's will list failure to get initials as an error on their scorecard and, after a certain number of their recorded errors, will drop you from their list.
No, this doesn't give you a really good answer to your question "why" but it is just like being a small child and being told "because."

Reply by sigtogo/OR on 2/14/12 7:57pm
Msg #411796

You can thank our litigious society for a lot of the initialing, not too mention the ridiculously large loan pkgs. Somewhere, sometime, a lawsuit was filed and the lender lost. So to prevent it from happening, and to be sure the borrower can’t say “but I missed that part” some of the more important disclosures, duplicated ad nauseam for sure, require initials in addition to signatures.
What cracks me up is the LO’s and closers continuing to use outdated disclosures when they have been replaced.

So my burning question is why or why do lenders require a sole borrower to sign at the top of the application that specifically says for joint borrowers? (actually I am pretty sure I know the answer, but it doesn't stop me from scratching my head.)

Reply by jba/fl on 2/14/12 8:13pm
Msg #411800

I think we can also thank government intervention for more paperwork as well. In the effort to simplify, complicated ideas are rolled out and implemented. For a while we heard the plaintive cry across the land: We didn't know - no one told us. So, now we a have a form devoted to telling people that if they don't make their payments on time, the will be reported to the credit bureaus, etc. We didn't know: so we have forms to explain that we ask a zillion questions to prevent money laundering. We didn't know: so we present the FBI FRAUD with shield in 3.5 inch black picture (waste of toner!) for telling lies on their forms. The HUD1 is now 5 or 6 pages if you count all the addendums. It is crazy.

I could go on forever; it seems that if someone says something we get one or two more pages in the stack. Let's not forget that "reduction in paper act' while we are at it, which means reduction in paper on the store shelves.

Reply by VT_Syrup on 2/15/12 8:38am
Msg #411837

Serves a useful purpose

One use for initials is to make it more difficult to remove a page from a document and replace it with one more favorable to the lender. (Of course, this doesn't apply to the boiler-plate documents that are the same for all lender.) But some people's signature is an illegible scrawl that gives no clue to what their handwritten initials would look like. By having the signature and the initials on the same page, it gives a somewhat reliable example of what the initials should look like. This makes it more complicated to replace ALL the other pages and forge initials on all the replacement pages.

I don't believe for a moment this useful purpose is the reason the lenders put signatures and initials on the same page; I'd put my money on sloppy software as the reason.

Reply by 101livescan on 2/15/12 8:38am
Msg #411838

Attorneys whom I notarize loan documents for ask me this question all the time. Who knows!