Marcy had been studying up. She didn’t want to make a fool of herself anymore. She went to her next signing prepared.
MARCY: Hi, I’m Marcy, and I’ll be your Signing Agent tonight.
GLORIA: Oh wonderful. It is so nice to see a well prepared Notary.
MARCY: We can start here with the Deed of Trust and I’ll explain the documents as we go along unless you want to start with the HUD and work our way back.
GLORIA: Oh, very sophisticated. You sound like one of those really experienced Notaries who has signed 3000+ loans and advertises on 123notary.com.
MARCY: Well, I’ve signed about 20 by now, and I’m only 2980 short of 3000. I am working on the 123notary course, but haven’t finished it yet, but I’m almost there.
GLORIA: Great. The Deed is fine, the Note is fine, now, why is my APR higher than my Rate in my Note?
MARCY: I just studied this… I know the answer. The APR is the annual percentage relationship between the payments and the amount borrowed, minus the fees. This rate is often used to compare the different loans borrowers have to choose from. The APR is almost always higher than the rate. The rate, on the other hand, is a monthly percentage relationship between the payments and the total amount borrowed, including fees.
GLORIA: Wow, very professional. You are even better prepared than the notaries who signed 3000 loans. They just told me, “It is the cost of the loan expressed as a percentage rate.” Your answer was so professional.
MARCY: I spent two hours memorizing it and I practice daily so I won’t look like a fool.
GLORIA: Oh, no, you don’t. I’m going to tell your boss that you are the best Notary I’ve ever had, and we refinance every five years. Now, where is my prepayment penalty?
MARCY: Oh, just look on the Truth in Lending.
GLORIA: Okay… It says that I will, won’t or might have a prepayment penalty. I’ve gotten more decisive answers from a magic 8 ball. Can you do any better than this?
MARCY: Oh, hmm. I thought it was there. Do you want to call the Lender?
GLORIA: Sorry to lecture you after I complimented you, but aren’t YOU supposed to know this?
MARCY: We could call the magic 8 ball? Better yet, let’s call the Lender.
FRANK: Yeah, Frank here.
MARCY: You are the first Lender in human history to actually answer his phone.
FRANK: Glad to be of help.
MARCY: Your customer wants to know what the terms of her prepayment penalty would be.
FRANK: You mean my BORROWER. Never call them customers. Gloria DiStefano. She doesn’t have one.
MARCY: Where is that documented – In the Prepayment Rider?
FRANK: No, if there is no prepayment penalty, then there definitely won’t be a rider. Check the Note. Anything else?
MARCY: We’re good. That was fast. 45 seconds exactly not that I’m counting.
GLORIA: I’m on it. I thought we went over the Note. I guess I skimmed it too fast. Here it is. It says I don’t have a prepayment penalty. Great. I’ll pay the whole thing off tomorrow. That was easy.
MARCY: Sorry, I’ll study harder. But, I am doing so much better than three weeks ago when I first started. I hadn’t a clue then, but now I get most of the questions correct.
GLORIA: That’s good, but you need to get ALL of the questions correctly and handle all situations like a pro if you want my business!
MARCY: Sadly, you are right. I’ll finish my course and review it regularly. I might even take a few other courses too.
Point (13) Calling the Lender
Notaries are often confused about when to call the Lender. Some Notaries are over-confident and never want to call the Lender while other Notaries call whenever the borrower sneezes. A high quality Notary knows when to call the Lender and when not to bother the Lender. You have to understand many of the common situations that arise when you have a small problem. If you call the Lender, leave a message, and wait 20 minutes and then call again. Call other entities related to the loan too if you can, such as the Signing Company, Escrow, Title, etc. If the Lender does answer, the borrower might talk to them for 45 minutes while you are running late to an appointment. You will save a lot of time and aggravation if you ONLY call the Lender when you absolutely need to.
The 1003 Universal Residential Loan Application is the one document that is universally wrong. There are always mistakes on everybody’s 1003. I’m not sure if there is a law requiring it to always be wrong, but it seems like there is some sort of cosmic law mandating that. Since the 1003, and the Good Faith Estimate are not final documents, don’t worry too much about it. Just make sure that the HUD Settlement Statement is correct, otherwise you’ll have to redraw your loan!
Many borrowers ask why the APR is higher than the Rate. If you study and rehearse explaining the APR, you can save yourself the time and aggravation of calling the Lender only to find out they are not able to answer their phone. The borrower will feel a lot better, and you will have one less problem at your signing.
The Prepayment Penalty
Borrowers ask about their Prepayment Penalty all the time. Look for it either in the Note, or the Prepayment Rider if there is one (and once in a while there is) The borrower can read the terms themselves instead of being frustrated that they can’t find it.
Letter of Instructions
Consult the letter of instructions before beginning any loan. That way you will know what to do if there is a problem. There might even be phone numbers in the instructions.
If a borrower asks a question that is specific to their loan, call the lender. If they ask a general question about what information is in what loan document, you should know. Study up!
What if the borrower signs in the wrong place on the Right to Cancel? Just go to the borrowers’ copies and get a fresh copy. You just saved yourself a lengthy discussion with the Lender.
Errors on Certificates
If there is an error on a Notary certificate, this is purely for the Notary to resolve. Don’t get the Lender involved in your job as you should know your job.
When is my first payment due?
Look in the TIL, HUD, Payment Coupon, but don’t call the Lender unless you have to.
Power of Attorney Signings
Call the Lender regardless. Even if you know exactly how to sign, call the Lender to confirm. Power of Attorney signings are rejected 70% of the time in my experience even if they are done correctly.
If the names printed on the documents are spelled wrong
If there are any problems with names of signers on the documents, you should call the Lender. If the ID doesn’t match the borrower’s name printed on the document, you have a problem. The Lender might not care about what Notary law says, but does want to get the loan signed. If the signer is not comfortable signing the way their name is typed on the document, the loan will probably not fund otherwise, but you can call the Lender or read our section about the Signature Affidavit.
Missing docs or docs the borrower won’t sign
If you are missing any of the loan documents that normally appear in a package, sign the ones that are there, send them back, and call the Lender immediately upon discovery that you are missing a document. Or, if a borrower won’t sign a particular document, call the Lender. You can send it back unsigned at the top of the stack. Or, if the borrower wants to keep it and send it back after talking to the Lender, that is another common option.
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