Posted by grapebed on 4/1/13 11:47am
Msg #463973

why are loan officers allowed to notarize their oen loans?

With all of the new regulations designed to "protect" the consumer , why are mortgage prof
Brokers allowed to notarize their own loans:.?

Reply by C. Rivera Chicago Notary Services on 4/1/13 11:49am
Msg #463974

never heard of this... n/m

Reply by C. Rivera Chicago Notary Services on 4/1/13 12:00pm
Msg #463976

never heard of this... n/m

Reply by 101livescan on 4/1/13 12:04pm
Msg #463977

I could not, as a loan originator for the Royal Bank of Canada. Company policy. It is pretty much across the board.

I would be surprised at how this passes muster, since they do have a conflict of interest, and while they are not named in the transaction, they are receiving a yield spread premium from the lender.

Curious on what you find out.

Reply by LisaWI on 4/1/13 1:09pm
Msg #463984

I, too, am very interested in how this is allowable......they do, in the end, have an monetary interest in the transaction......

Ive even heard of LO's doing the in-home closing for the borrowers.......

Reply by CH2inCA on 4/1/13 1:30pm
Msg #463988

Page 10 of the CA handbook under conflict of interest.

A notary public would not have a direct financial or beneficial interest in a transaction if a
notary public is acting in the capacity of an agent, employee, insurer, attorney, escrow holder,
or lender for a person having a direct financial or beneficial interest in the transaction.

Reply by jojo_MN on 4/1/13 1:34pm
Msg #463990

Re: Page 10 of the CA handbook under conflict of interest.

The OP stated signing THEIR OWN loan. In this case, they would have a direct benefit. If the borrower doesn't sign, they don't get paid their commission. If they were signing a loan for another loan officer in the same company, it would be different.

Reply by SharonMN on 4/1/13 1:37pm
Msg #463992

Re: Page 10 of the CA handbook under conflict of interest.

I've always believed the CA handbook to be unclear. I think the intent of the language CH2 posted is that if the *only* interest the notary has is that they are an employee of the lender, title, etc. they are OK. But I think if they are getting paid (on commission), or are notarizing for their spouse, or otherwise conflicted, the fact that they are an employee of the lender doesn't make that conflict go away.

Reply by grapebed on 4/1/13 1:32pm
Msg #463989

Why isn't there are greater grassroots movement to end this?

Why isn't there a greater grassroots movement to end this practice ?
Where is the NNA!

This practice should be formally addresses and elimamated.

Reply by ME/NJ on 4/1/13 2:08pm
Msg #463997

If you have the time money and connections go bang that drum n/m

Reply by Stoli on 4/1/13 2:43pm
Msg #464002

If you find anyone willing to enforce it, let me know. n/m

Reply by notarydi/CA on 4/1/13 4:34pm
Msg #464015

why are loan officers allowed to notarize their own loans?

When I renewed my commission last June, I asked this very same question of the instructor. He stated that the CA SOS does not consider it conflict of interest. I cited all the very same reasons everyone else has just stated as to why it is such a BAD idea. The response was that the loan officer has an "indirect financial benefit" and only the lender has a "direct financial benefit". Came home and called the CA SOS notary division and got the exact same answer and explanation. SCARY! On a positive note, most lenders do consider it conflict of interest for their loan officers to notarize their own deals and have strict in-house policies forbidding LO's to notarize their own deals.

Reply by LKT/CA on 4/1/13 6:01pm
Msg #464025

As far as CA real estate law goes....

A loan officer real estate agent/realtor do NOT....I repeat DO NOT benefit directly from the mortgage or real property transaction - the broker does. The contract is between the borrower and the R.E. broker/Lender/Mortgage broker....and THEY are the ones who get the commission. Then *that* amount is split with the person who actually does the foot work - the loan officer or real estate agent/realtor.

As a matter of propriety, most brokerages/companies have their own policy that prohibits an agent from notarizing his/her own deals. However, as far as CA R.E. law goes...it is NOT a conflict of interest. Again, the contract is NOT between the borrower and loan officer/r.e. agent/realtor. The contract is between the borrower and the broker. The broker and agent has a separate agreement. That's the *agency relationship* in CA real estate law.