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 Signing errors through the lenders eyes by Renee Kovacs
Posted by  TitleGalCA on 4/5/06 11:31pm

Re: Opinion, you're welcome, and this IS long =)
Posted by Renee Kovacs of MI on 4/5/06 6:29am
Msg #111103 from logged in user

Ok ... I'm freshly caffeinated and ready to roll =)

To recap my background/frame of reference, I was Closing/Funding manager, Mid-west region office, wholesale lender. Back in the day, we funded 50 mil/month, did about 80 closings/day and as many post-close audits, dealt direct w/ legal, compliance & secondary, had 600-odd title agents and even more mtg brokers active. This gave me a HUGE 'cross-section' of experience with what closers/SA's do, how they do it, and what happens as a result.

If I could get only one, single point across to SA's (especially some of the ones you're referencing, TG!) it would be this: There is almost zero feedback from a lender to a SA. I personally handled over 10,000 closed/funded loans - and do not recall EVER speaking to a mobile S/A other than the rare calls from them re: print issues.

What I see in the S/A world is that an assumption of being/doing 'right' is made, based on that LACK of feedback. Instead of assuming yourself to be "error-free" (in the absence of feedback), assume ONLY that there was never anyone THAT ticked-off or frustrated that they got in touch with you. In fact, I'd go so far as to say assume you HAVE missed a signature, miss-dated something, forgot a stamp, etc. Perhaps 1 in 10 pkgs come back picture-perfect, regardless of who closes them.

The fact is, there just isn't time to waste. Like Accurate posted - the world revolves around the investor - and the loan is costing you money every day it's NOT in a bulk rack waiting for that secondary sale.

The lender's Closing Instructions are a binding contract between lender and settlement agent. The lender says "I want it this way" based on law, and investor's whims and the settlement agent is INSURING that those requirements will be met. If they're not, then the lender can/will enforce the contract.

For every signature missed, page not initialed, whatever - the first question is: Can I sell this loan as-is? Yes? Move on ... (Feedback to S/A = 0) Does it mean then that the doc isn't "necessary"? NO! It means either an 'exception' to the rule can be made, provided the investor doesn't find it commonly missing - or, that I will FedEx it MYSELF to (B) (borrower) w/ a FedEx back to my corp office as a 'follow-up' doc, because THERE'S NO TIME TO WASTE.

Blue ink/black ink - could be Investor requirement, could be just for ease of auditing, could be just frustration level with red/purple/glitter ink ... if it records and it's NOT investor's whim, well, you're not going to hear feedback but that doesn't necessarily mean nobody notices. We required blue, written in instructions - when done in black, it really can tick you off and your brain just screams "GEEZ is it THAT hard?!" Is that really the kind of reaction you want attached in anyway to YOUR name? You sit and audit 50 pkgs in a day and you'll see how ticked you get having to use the 'smear test' on all those signatures ...and yes, you DO have to be certain they're not copies because yes, you WILL find copies of things like the NOTE or the TIL or something equally unbelievable.

Now - if it's something preventing a legal/compliant or valid loan, and I'm very busy, and having a lot of this from the same title office - I MIGHT push back on them, but ultimately it only ends of taking longer, and it's easier/faster to get it fixed myself.

If you don't think these things (errors/omissions) are commonplace - have another think. In busy times, we hired extra hands who did nothing BUT chase after B's for corrections. Most of the larger T/C's have "post close depts" for the same reason.

Well, you say, no feedback - who cares? I'm here to say - sit and do audits day after day after day, you will pick up the patterns and recognize the names and you will pick up the phone out of frustration (and sheer amazement) and let T/C know "I don't want to see this name (closer/SA) again." And you won't.

Well, that addresses the "I never read the closing instructions" and "Blue ink, black ink, who cares?" and the "I've NEVER made a mistake" issues.

The glitter pen joke is no joke, and again - one in maybe 10 pkgs comes back pretty.

I have my own opinion about the "S/A vs. Point-n-Sign" debate. It's not a 'one or the other' thing, like anything else in the natural world - there are degrees and variances. The P/S (Point & Sign) type can certainly get the job done, but my own take is that these are primarily people with little/no industry experience, therefore the knowledge base is heavily weighted toward the Notary side. (Now wait, hold on, let me finish ...) Because you can't "unknow" something, those S/A's who have industry experience AND Notary knowledge would (I theorize) be more likely to act as the "Signing Agent" type, who explain what a doc is, answer questions about what a doc's purpose is, and often can problem-solve. I know how many years it took me to acquire some of my knowledge base - I think a P/S is safer to THEMSELVES to remain strictly P/S unless/until they really know their way around the laws, nuances of the industry, etc. HOWEVER, I think an S/A with a knowledge base that is balanced (both industry and notary knowledge bases) is less risk to everyone else (B, T/A, Lender) but poses more risk to themselves. There are a lot of fine lines to walk, and you'd better know where those lines are before you walk on them.

The P/S (oh boy, here it comes ...) in my opinion is not 'worth' the same pay scale as an S/A based on math. The P/S will not problem-solve, and will cause unnecessary re-closes and 'lost' loans for reasons that really were quite insignificant. Re-closes cost money. P/S's who also demand to be paid 'trip fees' cost money. The S/A who prevents a re-close for something that is easily solved on the spot SAVES money. That knowledge, willingness to step up and the ability to save money has value. The S/A who is willing to take the same risk of non-pymt for an unfunded loan as everyone else (some appraisers even accept that risk, by the way) is going to SAVE money, and that has value.

This is my business (and you have your's, right?). The questions I ask myself include: How can I be an advantage to my clients? How can I bring added value, so that USING ME instead of closing inside or using someone cheaper or using anyone else at all is WORTH IT? As with any business - WHY should they use ME?

What would be the advantage of using a P/S who, when faced with an issue (and don't most loans/docs have issues?), folds up and goes home, then sends an invoice for their trip and hopes to land the signing when it goes back to re-close, so they can bill again? To me, the attitude of "well, if YOU can't even get their name spelled right on the docs, it's not MY problem, ha, I get paid twice now!" is a spin-off of the entitlement attitude. It's almost like the Lender becomes the enemy ... and it's the P/S and B 'against the world'. Yet ... it's the lender's money the B wants, the B's money the P/S wants.

I'm probably done for the day, but I think the discourse is great - thanks, T/G, for opening this up again.

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