Posted by CLFWA on 4/30/13 1:42pm
Msg #467877

Ethics and Borrower's Rights??

Do any of you believe that you have an ethical and or fiduciary obligation to be concerned/adhere to the Borrower's requests/rights? Most posts/NSA's discuss the need to meet and please the needs of the SS, Mortgage or Title Co. so we get paid, assigned more jobs, etc. Do we not also have an obligation to Borrower? Isn't the Borrower the one who ultimately is paying for our service and don't the loan docs really belong to the Borrower? Aren't all the players in the Loan process working for the borrower? Aside from each States/county requirements for formatting recorded documents, I am trying to understand why there is no consistency/formula in the Lenders network regarding how loan docs are signed, dated, initialed etc. This seems especially prudent after the disastrous outcome of loan practices in the last decade.

I recently had a Refinance signing where the borrower wanted to initial every page of the loan packet and sign/date the DOT & Note even though there was no specific request for these 2 docs to be dated. There were also no instructions from the lender of any kind and none regarding initials, dates, etc. I understand that, "documents must be signed and dated by the borrower anytime on or before the document date". Aside from this requirement, I usually follow today's standard practice of only initialing/dating where indicated by the doc. preparer. However, this borrower wanted to initial every page to protect himself. He also insisted on dating the DOT & Note. which matched.

The mortgager is now calling for a redraw which seems completely unjustified to me? All the notary certificates were accurate and stamped, and I provided 100% of my services as a NSA. If I was the Borrower, I would be extremely upset that my loan did not close due to these seemingly petty issues.
In my mind, an easy remedy for the Note is for the mortgager to FAX a clean copy to the Borrower and request he not date it. Also, I have never experienced an issue with dating the DOT and why would it cause a redraw? How/why does initialing every page of the package cause a redraw?
I have been all over the top 3-4 notary site forums and there seems to be no real consensus on how to handle this, unless the Lender provides specific instructions. Even then, if the Borrower wants to CYA, don't they have this right? I don't need my hand held and believe the Borrower has the right to sign as he sees fits as long as it does not interfere with recording of critical docs.
Any and all thoughts on this are appreciated. Thanks.

Reply by Calnotary on 4/30/13 1:48pm
Msg #467878

Lender make the rules, and if they don't want the DOT dated, that's how it has to be.

Who ever owns the gold makes the rules. The borrower is the client but the lender is providing the "funds"for that loan.

Reply by JPH13/MO on 4/30/13 1:56pm
Msg #467882

We do NOT have any fiduciary obligation toward the borrower, as they did not hire us. I would not have allowed the borrower to initial and date everything without first calling and getting approval. This company would not have given approval, most likely, but they could at least have talked to the borrower and tried to get him to understand he didn't need to do all of that to protect himself. If I called and couldn't reach anyone, I would make up wording for the borrower to sign that stated the borrower understands that initialing and dating every page was not part of the instructions, and may result in a redraw - just doing that may have made the borrower decide it wasn't necessary.

I have gotten instructions that mention to NEVER have the note dated, and then again a page with huge print saying to never date the note just preceding the note, so apparently this is a problem even though the note doesn't have a date line.

I never have anyone add a date or initials when there is no place on the document for a date or initial UNLESS I am given specific instructions to do so. I do work for one company that requires every page be initialed, but at least they have small doc sets.

If the borrower was so worried about the loan docs, and there was no right to rescind, they shouldn't have signed the docs. If they were worried but there was a right to rescind then they could have signed and then contacted whoever they needed to contact (loan officer, etc.) to get their fears calmed. BUT they should not be allowed to do whatever they want to the docs just to "protect" themselves.

Reply by CopperheadVA on 4/30/13 2:01pm
Msg #467883

By chance, was this a Provident loan? n/m

Reply by Treasure Valley Notary - Tina on 4/30/13 2:02pm
Msg #467884

Ouch - More training is needed

First off the only "rights" that the borrower has is to choose a different lender if they aren't happy with the request of the lender they are currently working with. In our household we live by the "he who has the money rules."

Second, you are the signing agent. You are the one in charge. I do not let a signer dictate to me how they are going to sign (unless it is general notary work). IF a signer wants to go against my advise I ask that they put it in writing that they are doing it how they want and not how I am advising them to do it - whether it be a signature, date or initials. I will also make a phone call or two.

If the lender did not want a date and one was put on the document, you are ultimately responsible for that. The same with the initials. If they are calling for a redraw my feelings are you are doing it complimentary. I personally wouldn't even charge for my initial visit. Your lack of action sounds like the reason for the redraw.

This is your business. You are not an employee. But you can't act like an employee either. You are the one in charge and you need to step up to that plate. If the instructions don't mention initials or dates on unmarked pages, then they don't go there, whether the signer likes it or not. This is where you need to know who you work for and what they want. If the instructions are not clear enough make inquiries.

And not having specific instructions, is specific instructions. I hate having 10 pages of instructions from a company because a "signing agent" doesn't know their job. It drives the experienced signing agents nuts. I just want the instructions that are specific to their needs.

And just FYI, you are right . . . as a borrower I would be upset that my loan didn't close due to these issues. But it really does not seem that it was the lender or title company's fault, but that of the signing agent. Before you get yourself into legal troubles be sure to get some more training. Good luck.

Reply by CaNotary777 on 4/30/13 7:08pm
Msg #467933

Agree with you Tina

we are in charge and we should do what the lender wants( or expects) not what the borrower wants- they can so easily botch the signings-- also we gotta make sure that the borrowers signs exactly as their name is typed in the docs ( if the lender so wants) so that there is no issue of undersigning. I make sure the borrower does what the lender wants. I think that's the golden rule( or rather it should be)

Reply by ReneeK_MI on 4/30/13 2:02pm
Msg #467885

While I agree that the world would run easier in a whole lot of places, if everything everywhere was the same - it would get boring.

The loan documents are the property of the Lender, and it is the Lender's discretion to require or disallow particulars in the execution of their documents. The Lender is providing to the borrower - not the other way around. The borrower has a lot of rights, but does not have the right to execute documents any other way than what the Lender requests.

When faced with a borrower who wishes to impart their own take on things, a phone call is in order. What might seem at face value to be "petty" or unjustified can have myriad consequences that we may never be privy to. Alternatively, it might actually be just plain stupid and petty - but we don't get a vote, and neither does the borrower (unless the Lender decides to let it go).

Just an FYI - the lender is the mortgagee, the borrower is the mortgagor.

Reply by Larry/IL on 4/30/13 2:10pm
Msg #467887

A trained monkey can do our job!

I just had to get this in there from a previous thread. To the O/P, apparently you haven't reached the trained monkey level yet. It's really very simple, follow all instructions, never assume or guess at anything and if the borrower wants to change anything or not follow simple instructions, call your hiring party and get clarification or Oks.

Otherwise a correction, a trip, a redraw and your money will be on you.

Reply by GOLDGIRL/CA on 4/30/13 2:52pm
Msg #467894

Call us Cheeta

Borrowers do not get to make these decisions. They decide whether to sign (as you instruct them) or not. Otherwise, you go back out for free to get things fixed and hope you'll still get jobs from your hiring agency *and* hope the borrower doesn't blame the funding holdup on you cos you let them hijack the signing. Borrowers don't understand the likely consequences of the behavior that your borrower exhibited. But the NSA should know. It's our job to keep them on the straight and narrow to avoid redraws and delayed funding and other horrible results.

We have absolutely no financial responsibility to the borrower. None. First place, we never really "know" who's paying the notary fee. It could be coming out of the LO's pocket, it could be part of a package deal between the TC and the lender, etc etc. Anyway, it doesn't matter. The borrower is not paying us; the hiring agency is. The line between us and hiring agency and their instructions are all that matter. We do not work for the borrower. We have no "obligations" to the borrower, with the possible exception of trying to restrain ourselves from kicking their nipping, yappy dogs.

Yes, we do have an ethical responsibility to the borrower just as we have an ethical responsibility to everyone we deal with in this biz.

The docs are the lender's property. We are responsible for them when they are in our possession. They do not belong to the borrowers., Never have, never will. Never allow the borrowers to add/subtract/line through/write on/make notes/scribble/etc. on the docs beyond anything the lender/TC asks for. ESPECIALLY DATES AND INITIALS! Especially on the DOT and Note! That's just asking for a (expensive) redraw.

It's not our job to help the borrower "protect himself" or make the borrower feel all warm and squishy. It's our job to get the docs signed exactly the way the lender/TC want. If the borrowers are uncomfortable with that .... then we call lender, hiring agency, or TC or have borrowers write notes of explanation as to why they won't follow your instructions or adjourn the signing.

Reply by MW/VA on 4/30/13 3:11pm
Msg #467898

While we certain treat the borrowers with respect, they are

not the one's in control, and sometimes need a subtle reality check. I had a refi a couple of mos. ago where the wife (NBS at that) insisted on controlling the signing, and making "corrections" to the 1003, etc. She was a total PIA. I tried to explain that doing that could potentially hold up funding because of the "markups" on the docs. She ended up registering a complaint against me with the lender, and it got passed down through the tc & ss. I had to respond to the absolute lies she had listed in her complaint.
The fact of the matter is that the lender doesn't have to fund that loan. That's why we need to do a professional job of making sure docs are executed properly. IMO too many are of the opinion that any "trained monkey" can do this--that's where the problem comes in.
I'm all about tact, but sometimes you have to remind the borrowers that if things aren't done correctly they are at risk of not getting their loan through. It's always best to make a call to the LO or hiring party in situations like this. I learned early on, do not let the borrowers control the signing.

Reply by Stephanie Santiago on 4/30/13 3:16pm
Msg #467903

We should conduct the signing & be impartial..... n/m

Reply by Art_PA on 4/30/13 4:33pm
Msg #467916

Looks like you are searching for someone who will agree with you.

First, you are only a notary - you are not being paid to institute uniform document procedures for the lending industry.

Second, you have made your job more difficult by letting a borrower decide how to sign. The lender decides how it requires the borrower to sign, initial, date, etc.

After you have done this for a while, if you survive, you will learn that the documents belong to the lender.

The notary is there to identify the borrower and to supervise the signing of the documents. I will never understand why some notaries/signing agents inflate the job to be more than it is by assuming other duties and responsibilities. Companies pay little for what they pay you to do, and nothing for everything else you don't have to do.

Reply by GOLDGIRL/CA on 4/30/13 5:02pm
Msg #467922

I call it the 'lil lawyer' syndrome, Art.

Notary gets a commission (sometimes with no required education or testing) and starts hotdoggin', thinking they get to call all the shots and know all the answers.

Once we get a little loan signing experience, we find out that's not how it works. LOL!

Reply by MikeC/TX on 4/30/13 6:32pm
Msg #467928

Your client is the one who hired you...

and that is not the borrower. Despite the fact that the borrower is ultimately paying your fee (which is probably a small amount of what they actually paid for the service), the borrower is just a customer, and you have no fiduciary responsibility to them at all.

You work FOR the client who hired you; you work WITH the customer and should always show them all due respect. If they're insisting on doing things your client doesn't want them to do, you need to step up and halt the proceedings until you can get it sorted out.

Reply by Julie/MI on 4/30/13 7:46pm
Msg #467940

FYI: Mortgagor=Borrower;Mortgagee=lender

the one that is lending the $$$ gets to decide what gets initialed or not. Period.

Reply by jnew on 4/30/13 9:18pm
Msg #467949

Re: FYI: Mortgagor=Borrower;Mortgagee=lender

I had this problem at a closing. Fortunately, I stopped the signing after one document and asked the borrower if it would be all right if I called the title company to make sure that none of the documents would be invalidated by the addition of information. (initials, dates, corrections). He got the word not to do it from the title company and agreed to not to amend any documents. The biggest problem may be the people who write articles on the internet or in the paper advising people on being proactive at a closing. I had a closing last month where the borrower had to do three applications because he was either bull headed or JPS (just plain stupid) and had to start the loan process over each time he screwed up. When he finally closed it was nine months later.

Since then, I always precede the signing by explaining that they have to sign as their names appear, they can not initial or date for each other, nor can they add initials or dates where no entry lines appear. If they insist despite my cautionary instructions, I will call from the table and have it resolved by the hiring party. I have done faxbacks (gasp!!) showing the signatures with the dreaded dates just so the hiring party knows what happened.

Reply by ToniK on 5/1/13 5:45am
Msg #467958

Here are the reasons why it's a redraw

Because they can't sell the loan on the secondary market if its initialed, signed & dated in places it's not required. Especially the NOTE & DOT. Investors won't touch it...at least that's what I was told by a few Lenders.