Posted by Ali/IL on 6/13/13 3:30pm
Msg #473208

Asked not to leave rtc

I got the oddest request to not give borrower a rtc form even though they signed one. And, this is for their residential home. They have 10 days to cancel.

Reply by LKT/CA on 6/13/13 3:50pm
Msg #473212

They don't need *that* form to cancel.....they can use a piece of notebook paper and a pen or even a paper towel and crayon - so long as the cancellation is *in* writing, sent to the place it needs to be sent to (they can just copy that info from the RTC they signed), and within the time frame required.

Reply by Art_PA on 6/13/13 6:55pm
Msg #473246

And exactly how does a borrower cancel if not informed how to cancel? The RTC form acknowledges receipt of 2 complete copies. Do you really think that the borrower will write down this information just for the hell of it ?? Are you suggesting that a notary tell a borrower that he/she is not leaving a complete copy of the loan package?

Check your E&O to see if it will cover you for intentional violation of Federal Law. If you think that it does, get it in writing.

Reply by LKT/CA on 6/13/13 9:02pm
Msg #473275

<<<And exactly how does a borrower cancel if not informed how to cancel?>>>

Easy, you inform them.

<<<The RTC form acknowledges receipt of 2 complete copies. Do you really think that the borrower will write down this information just for the hell of it ??>>>

Just because the lender doesn't want the borrower to HAVE copies of the RTC doesn't mean the info is a secret. You can still inform the borrowers of their right.

<<<Are you suggesting that a notary tell a borrower that he/she is not leaving a complete copy of the loan package?>>>

YES...and the borrowers can decide if they will get on the phone and call the lender to find out WHY or decide they won't sign at all.

<<<Check your E&O to see if it will cover you for intentional violation of Federal Law.>>>

What Federal Law says a NOTARY PUBLIC is to provide copies of the RTC?!?!?!?!? Is the NOTARY PUBLIC lending the money to the borrowers?!?!?! The LENDER is responsible for that and if the LENDER doesn't provide each borrower with 2 copies of the NORTC, then it's the LENDER who is violating Federal Law, not the Notary. E & O covers notarial errors ONLY so that suggestion is baloney.

<<<If you think that it does, get it in writing.>>>

If YOU think that it's the NOTARY'S responsibility and not the lender's, then let's see THAT in writing.

Reply by LKT/CA on 6/13/13 9:13pm
Msg #473277

Heavy consequence for a lender's noncompliance

From the article: "What are the consequences of noncompliance? There are serious consequences for failing to follow the right-of-rescission rules. First, until a lender provides the material disclosures and the proper Notice of Right to Rescind, the three-business day rescission period does not start to run, and the transaction remains rescindable for up to three years. And once a consumer rescinds a transaction, the security interest in the property becomes void and you must reimburse the consumer for all of the finance charges collected over the life of the loan."

***....transaction remains rescindable for up to three years.*** These days, I doubt any lender takes that lightly.

Reply by Karla/OR on 6/13/13 6:58pm
Msg #473247

So if the BO wants to cancel the loan in their RTC period, they will go looking through their packet and not find the form nor the instructions to do it PC. (I get that the BO can cancel any way, shape or form they wish to use.) Why would the title/lender want to do that to the BO???? I see no purpose.

Reply by Bear900/CA on 6/13/13 7:15pm
Msg #473253

Only waiver is for "bona fide personal financial emergency"

This is part of TILA Regulation Z.

http://mortgage-home-loan-bank-fraud.com/legal/Right_of_rescission.htm

Without getting into much detail, and taking what you said at face value, you unknowingly helped someone break the law. If the customer later rescinds there will be all sorts of problems with you possibly in the center.

Reply by Luckydog on 6/13/13 7:47pm
Msg #473261

Re: Only waiver is for "bona fide personal financial emergency"

It should be in their copy package. I would not remove anything out of theirs, as should be a duplicate minus multiple HUDS if you had to print them. What they do need to remove is the statement they can cancel by "telegram" since the last telegram was used in the 1980's.
10 day RTC? Never had that one before either.

Reply by Linda Spanski on 6/13/13 8:09pm
Msg #473265

Extended RTC a red flag?

A company has nothing to gain by giving the borrower more than 3 days to rescind. Looking back, the only lenders I can recall doing that had bad reputations and/or legal action against them. The penalty was a longer recission period for their borrowers --think Ameriquest.

Reply by Ali/IL on 6/13/13 9:26pm
Msg #473281

Re: Extended RTC a red flag?

I gave the borrower package copy and her copies of signed rtc.

Reply by LKT/CA on 6/13/13 9:51pm
Msg #473284

Re: Extended RTC a red flag?

You are only seeing those docs the DAY of the signing. Without being a part of that specific lending process, you have NO idea of the particulars of that loan for THAT borrower and if you were given written instructions NOT to provide copies of the NORTC, you should not have. You should have informed the borrowers and let it be THEIR decision to call the lender, to not sign or to proceed with signing. If any Federal Laws were violated, the LENDER violated them, not the Notary Public. By providing docs to the borrowers you were told NOT to provide, you committed UPL.

Again, you only saw those docs the DAY of the signing and are not privy to the process for those borrowers. You committed UPL.

Reply by Bear900/CA on 6/14/13 2:34am
Msg #473303

Loan Rescission - When Three Days Really Means Three Years

This is a good article from a law firm regarding NORTCs.

http://www.loansafe.org/forum/stop-foreclosure-tell-us-your-story/156-loan-rescission-when-three-days-really-means-three-years.html

“The notice of right to cancel is perhaps the most straight forward requirement of the creditor set forth by TILA, yet the most commonly violated in predatory lending.”

“Unfortunately, creditors often leave the completion of these forms to the closing agent or notary public. Given the recent rise of mobile notaries or loan document signers, the environment is fraught with negligence when it comes to this duty.”

I agree with the argument that we are not in control to challenge a loan as we do NOT know the circumstances. But that doesn’t remove our experience and expertise regarding what basic documents are required and when, and if missing or asked to remove them to question why, politely.

There are at least 5 vital documents to every loan that we are expected to be well-versed in: The Settlement Statement, DOT, TIL, Note and in the case of a refi of a primary residence the RTC.

Regarding the RTC, our feet are held to the fire to make sure the right dates are on it (much debated in the past) and to ensure each borrower has two copies. One goes with the other.

We may sometimes revert to this statement or something similar when a customer challenges the rate and term of the contract: “"I have a copy of your loan docs that I'll leave with you for review. You have 3-days to go over them & if you're not happy, you can cancel the transaction.” How do we make that possible for them?

In our minds, hopefully, that statement would be redundant if the customer was not handed copies of the RTC. Still, it is NOT our choice to alter instructions. It IS our choice to turn the loan back if we suspect something amiss, or at least ask about it. We would probably do that if we were asked to remove any of the other critical documents. Why not the RTC?

From my point of view, I would suspect that a loan originator is trying to beat a lock deadline by removing the borrower’s RTC while submitting signed copies to the lender with older dates. That should be easily discernible. Bear in mind, the properly dated RTC admonishes the customer of their rights. We don't.

Notice the attorney’s words: “Given the recent rise of mobile notaries or loan document signers, the environment is fraught with negligence when it comes to this duty.”

Don’t give an attorney reason to believe you were negligent in anything, no matter what day it is!

Best!

Reply by JanetK_CA on 6/14/13 2:47am
Msg #473304

Ali, I noticed that you didn't exactly specify who it was that told you not to give the borrowers the rtc copies, or in what form that request came. I think it could make a big difference if, for example, it was a verbal request from a LO vs. a written request from the lender or title company.

Reply by ReneeK_MI on 6/14/13 5:12am
Msg #473305

Perhaps it wasn't a rescindable loan to begin with?

Lacking much in detail, it's impossible to understand this situation. Who requested that you not give the borrower a form, when did they ask you (before the signing, or after), was the request to pull ALL the RTC's and not just the borrower's copies?

Just because it was a loan on their residence doesn't mean it is rescindable - the RTC is not required IF it is a streamline (same lender-to-same lender) that doesn't increase the amount financed (plus costs).

There's the possibility that the lender desired the delayed funding, but did NOT need to provide a RTC and requested that you cull those forms from the pkg.

Reply by Linda_H/FL on 6/14/13 7:12am
Msg #473306

OP stated they have 10 days to cancel

It's my understanding lender has the option to complete waive or to extend the rescission period. What agreement the lender has entered into with the borrowers is not ours to interfere with. Perhaps the NORTC in the package was automatically populated when the docs were drawn and contained a NORTC with incorrect dates and that's why they wanted it pulled.

I would have pulled them, told the borrowers my instructions and advised them to speak with their loan officer.

JMO