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April 5, 2017

Do you know your Federal holidays?

Filed under: Loan Signing 101 — admin @ 8:08 am

Many Notaries are a little rusty on Federal holidays. Plus, a few of the Federal holidays are a little bit complicated to understand. Here are the 2017 holiday schedules. There are ten Federal holidays in all.

Jan 1 — New Year’s Day
Jan 16 — Martin Luther King, Jr.
Feb 20 — Washington’s Birthday
May 29 — Memorial Day
July 4 — Independence Day

Sept 4 — Labor Day
Oct 9 — Columbus Day
Nov 10 — Veterans Day
Nov 23 — Thanksgiving Day
Dec 25 — Christmas Day

New Year’s Day When we ask people to name a holiday in January, most people omit to answer New Year’s Day as it feels like it is celebrated more in the end of December — but, that is New Year’s eve which is not a Federal holiday.

Martin Luther King Day Then we have MLK day. If we celebrated holidays in chronological order, Columbus Day would come before MLK day. We would have a day commemorating when slavory in the new world was originated, when it ended, and when civil rights began to be recognized. But, we have our holidays in inverse chronological order with MLK day, then Lincoln’s Birthday and then finally Columbus Day. Martin Luther King, Jr. was the most famous civil rights activist in America. He had a dream about people finally treating each other fairly for once. The Twitter MLK had a dream where people would be judged each other by the content of their 140 characters, and not the color of their link(s). I had a dream too, and then my alarm clock went off.

Washington’s Birthday is the most misunderstood of holidays. The reason being that it is also informally called President’s day. The holiday is based on a merging of Washington’s and Lincoln’s birthdays as celebrating both was just too much. Incidentally, Washington’s birthday is an optimal day to get a discount on a Sealy mattress. If your mattress is more than eight years old — it’s time to replace! Without George Washington or someone like him, we might still be a colony and have to pay a 3% tax to the British without having any representation.

Memorial Day: The holiday I always forget is Memorial Day. Perhaps, we should call it forgetial day. Independence Day is always fun, but it feels more like Afghanistan with all of the fireworks going off and car alarms. I guess that is what the revolution felt like — but, our flag (and my hubcaps) was still there, and that is the main thing.

Labor Day (pronounced “Lay-bDay” in Boston) must be popular with the union folks, but Notaries don’t get enough credit for their labor, especially with all of the micromanaging and fax backs. If Notaries were in charge, we would have Fax Back day, where we burn fax backs in a parade and then stomp on the embers. Sounds like something they would do in Iraq.

Columbus Day (not popular in the Lakota reservation) is the day we celebrate how — in 1492, Columbus sailed the ocean blue and Italians named our country! Vikings discovered America in the 1100’s, but didn’t get much if any credit in history books while Siberians “discovered” American accidentally while hunting caribou in 28,000 BC. and appropriately named it, “The sheet of ice to the East.”

Columbus committed acts of genocide on native peoples and forced many indiginous peple into slavery not to mention forced conversions to Christianity. Personally, I think that Columbus Day should more accurately be called, “The White Man Day.” Columbus had many goals such as the pursuit of gold, and geographical knowledge that would lead to the subjugation of the Americas for economic gain through colonialism, a trade route for African slaves, sugar, and tobacco. How progressive!

GINO: “Hey, we a named a your country — capiche?”

JOHN: “Oh, cool. What did you name it?”

GINO: “A- MER-ica!!!!!”

JOHN: “Oh, I didn’t know that.”

Veteran’s Day is a day we remember Veterans, but they very rarely have the opportunity to sign a VA loan on their own holiday.

Thanksgiving is a much nicer holiday. We gave thanks to the American Indians in Massachusetts for teaching us how to plant corn and survive in a cold and unfamiliar ecosystem. Subsequently, 96% of East Coast Native Americans died of diseases courtesy of European immigrants. What about the remaining 4%?

Black Friday is thought of by Notaries as a holiday because nobody works on Black Friday. However, it is officially a working day according to the government. HOWEVER, it is up to the Lender if they include Black Friday as a day to rescind or not. Half of Lenders do not county Black Friday in the three day period and treat it more like a Sunday.White Saturday is the day when people eat leftovers (generally white breast meat) and should be renamed, “Leftover day.”

Christmas, the most commercial holiday of the year is a day that hardly anyone works and is an official Federal Holiday. People normally take the 24th off as well, although it is technically a working day. If you call Notaries on the 24th, they will turn down work on account that they are baking cookies or spending time with the grandchildren.

If the Lakota Nation could name a holiday, they would call it “Broken Treaty Day” where broken treaties that the USA and native people’s made were systematically broken on a whim. What’s the point of having a treaty if you don’t abide by it?

Anyway, now we know our ABC’s, how America was discovered, the kinds of unfriendly behavior the early colonialists engaged in, how we thanked the Indians, how people got their civil rights, how we eat leftover turkey, and how we bake cookies in rememberance of our savior and lord from Nazereth while declining Notary calls. The end!

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March 23, 2017

The 3 day right to rescind

Filed under: (4) Documents,Loan Signing 101 — admin @ 8:00 am

This article intends to clarify dating on the Notice of Right to Cancel or RTC.

A borrower went to confession

TOM: “Forgive me father for I have rescinded.”

PADRE: “Did you rescind in the 3 day period?”

TOM: “Yes, father.”

PADRE: “Then, it is okay in the eyes of the lord. 3 hail Mary’s.”

TOM: “It was in two days, so can you reduce my sentence to 2 hail Mary’s?”

When you get a non-commercial and non-investment personal refinance, traditionally you get three days to resind or cancel your loan. Counties these three days is a skill that Notaries need, but don’t always have. In the old days, and with certain lenders, the Notary is reponsible to write in the TRANSACTION DATE in a blank in the RTC.

The transaction date is the date when a notarization is done or when a loan is signed. Technically with Acknowledged signatures, the signature can be made previous to the Notarization. It might be five minutes previously or twenty years previous to the notarization. During loan signings, the documents are normally signed at the time of the loan signing and promptly notarized.

The signature date is normally the same as the transaction date, but not necessarily and is the date the person signed the document. Once again, in an Acknowledgment, that could come before the notarization if the borrower wishes to sign ahead of time, but at a loan signing is normally on the date of the loan signing.

The notarization date is the date when a document is notarized.

The recission date or deadline or last day to rescind is three days after the date of the signing not including Sundays or Federal hollidays or other days that the Lender allows.

Please note that business days only include Monday to Friday while days to rescind include Monday to Saturday not including Federal Holidays of which there are ten.

Let’s do some practice runs.

(1.) A loan is signed New Year’s eve on Friday the 31st. What is the last day to cancel your Refinance?
Sat would be New Year’s Day a Federal holiday. Sunday would be a Sunday and not counted. So, you would have… Mon, Tues, Wednesday would be the last day.

(2.) A loan is signed on Monday in April when there are no Federal holidays. The last day to cancel is… Tues, Weds, Thursday would be the last day.

(3.) A loan is signed on Sunday in April. The last day to cancel is… Mon, Tues, Wednesday would be the last day to cancel.

(4.) A loan is signed on Thursday in April. The last day to cancel is… Fri, Sat, skip Sunday and Monday would be the last day to cancel.

(5.) A loan is signed Wednesday before Thanksgiving. The last day to cancel would be… Fri, Sat, skip sunday and then Monday would be the last day to cancel UNLESS the Lender allows Friday as an arbitrary holiday (they can be generous if they like) in which case it would be… Sat, Mon, and Tuesday would be the last day to cancel. Whether Black Friday is considered a holiday or not is up to the Lender and they are 50/50 on this one. But, if they don’t specify, then it is considered a regular business day with exceptionally long lines!

Now boys and girls, we understand the RTC or Notice of Right to Cancel. We hope you are also aware of when the ten Federal holidays come. It is not a bad idea to have a Rescission Calendar. I heard that the NNA might have them, so get one that fits in your wallet.

What’s in YOUR wallet?

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June 28, 2016

How good is your technical knowledge, should you learn more?

Most Notaries feel that they know it all and don’t need to learn anything more. But, the knowledge necessary to make it in this profession is deep and what you need to know keeps changing. So, you my friend need to keep reading. In addition to passing the certification exams of the various Notary companies out there, you also need to read.

What types of eduational content should you read? NNA has a good blog with technical posts. 123notary has a wealth of technical blogs as well.

123notary’s 30 point course
http://blog.123notary.com/?cat=3442

Best Notary Blog Articles for Advanced Notaries
http://blog.123notary.com/?p=14736

Signing Agent best practices – 63 points
http://blog.123notary.com/?p=4315

What’s the difference in getting 16 clicks a month and 100+?
http://blog.123notary.com/?p=13185

Notary Information for beginners — best posts
http://blog.123notary.com/?p=10472

Everything you need to know about writing a great notes section
http://blog.123notary.com/?p=16074

Notary Journals from A to Z
http://blog.123notary.com/?p=8348

Business Tips for Notaries
http://blog.123notary.com/?cat=3246

Marketing Articles for Notaries
http://blog.123notary.com/?cat=3256

Jail & Hospital Signings
http://blog.123notary.com/?cat=3251

Technical & Legal Posts
http://blog.123notary.com/?cat=3244

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February 23, 2016

The Closing Disclosure

Notaries have become moderately familiar with the new Closing Disclosure. I want to stress some important points about this document that you should memorize. I also added this content to the 30 point course for future reference!

1. The Closing Estimate
Previously there was a document called the Good Faith Estimate whose current replacement would be the Closing Estimate. Although these two documents are not even close to being identical, they go over the estimated costs of the loan among other information.

2. The Truth in Lending
This is now an antiquated document. The Truth in Lending had some bizarre and unhelpful verbiage about the prepayment penalty. It said you, “will, won’t or may” have a prepayment penalty. The Closing Disclosure states if you will or won’t but omits the ambiguous word, “may” from the document.

3. The APR
In addition to going over the APR, there will be a new figure discussed on the Closing disclosure called the TIP which is the total interest percentage.

4. Taxes, Insurance, Escrow Fees
Estimated escrow costs, insurance, taxes, servicing, assumption, and appraisal costs will also be covered in this new and exciting document.

5. The property address
Many loan signing courses claim you should look for the property address on the Deed of Trust or Mortgage. You can, but it is also on the Closing Disclosure on the upper left corner.

6. The Loan Amount & Rate
This is also covered on the upper half of page one.

7. Fees associated with the loan
The Closing Disclosure replaces the TIL and the HUD-1 Settlement Statement. So, items from the Settlement Statement such as fees or costs associated with the loan will be covered on this document.

8. Calculating Cash to Close
This is a very practical section that covers total closing costs, closing costs financeed, down payment, deposit, funds for borrower, seller credits, and adjustments. The bottom line in this section is the cash to close total amount.

9. Summary of Transactions
The sale price of the property, closing costs, HOA dues, deposits, loan amount, sellers credit, rebates, and local taxes are all part of the accounting spreadsheet in this section.

10. The additional information section about the loan
This section covers other specifications about the loan such as whether or not assumption is allowed, if there is a demand feature, negative amortization, late payments, partial payments, escrow accounts, and more…

11. Next, there is a basic loan calculation similar to what the TIL had with the total payments, finance charge, amount financed, APR, and the new figure which is the TIP.

12. There is a section listing other disclosures which will list the appraisal, contract details, liability after foreclosure (keeping it positive), refinance, and tax deductions.

13. And last there is contact information of the Lender, the Real Estate Brokers, and the Settlement Agents.

Sign below.

——————————————— ———-
Applicant Signature Date

Eventually I will create some test questions out of this material. I already have one, but I will derive some others as well.

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You might also like:

Ken’s tips for the Closing Disclosure
http://blog.123notary.com/?p=17116

The 30 point course’s guide to the Closing Disclosure
http://blog.123notary.com/?p=14291

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November 10, 2015

Trouble getting paid? Have you tried our demand letter from hell?

Notaries complain all day long about how hard it is to get paid. The new complaint is that there are companies who will pay promptly, but not unless you bug them around 30 days after the signing. But, what about companies who just won’t or just don’t pay? First of all, research all signing companies on 123notary.com/s or Notary Rotary BEFORE accepting a job from them. If you work for known offenders, you will likely not get paid. Asking for paypal up front works for certain experienced notaries, but might not work for you. It is worth trying. But, what about after the fact?

Use our letter from hell!
Our letter from hell threatens signing companies in all sorts of horrifying ways that makes their skin crawl. This letter was composed based on the advice from many of our most seasoned veteran notaries from around the country. If this doesn’t get them to pay, they are either completely out of business. There is no 100%, but our letter comes as close to 100% for getting you paid that exists.

Testimonial

Just to let you know, your letter works and got me paid for a signing I was ready to write off.
Erwin

We have received other testimonials, but we didn’t publish them, and they are lost somewhere in my email account!

Links

Scary results when someone uses our demand letter from hell
http://blog.123notary.com/?p=2006

Template for our famous demand letter
http://www.123notary.com/howto-get-paid-signing-agent.htm

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October 13, 2015

Notary Quiz — Harry Potter’s magic Notary Seal & Identification Questions.

Many notaries do their jobs just fine when conditions are good. But, what if a few snags are thrown into the picture?
Here is a quick Notary quiz to test your knowledge.

(1) What do you do if the signer has current government issued photo ID that has their name as John Smith, while the document says John T Smith, assuming the signer forgot to renew their magic wand with the DMW? (department of magic wands)

(2) Does your state allow the use of expired identification for notarizations? If so, how old are those expired identification documents allowed to be assuming they are not stored in the dungeon of the Hogwarts Hall of Records? I know of three highly populated states that allow this by the way…

(3) What do you do if the signer has no identification at all or can’t find their identification, but hasn’t lost their soul?

(4) What do you do if the signer offers you a Green Card (resident alien card), or Credit Card with a magic photo?

(5) What if the signer’s name on their ID is Reginald T Brown, Sr? How would you have the borrower initial before you damn them to eternal darkness?

(6) If a signer is signing as an agent for a Power of Attorney and the name on their ID reads John Smith, but John is signing for Harry Potter, would they sign Harry Potter’s name and be notarized as Harry Potter? How would you handle this not so unusual, but often misunderstood situation? I myself would solve the problem by taking the notarization to the castle of doom and finish it there using my magic notary seal (after doing a spell on it, and just to be safe, a spell-check)

(7) If your state requires you to thumbprint the signer in your journal (some states have this requirement and you should do it anyway for security even if not required) but the signer is missing their right thumb, what do you do, and how do you document this thumbprinting?

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You might also like:

You know you’re a good Notary when you…
http://blog.123notary.com/?p=14912

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October 5, 2015

The Five Food Groups of Notary Knowledge

I read Ann Handley’s blog about the five food groups of marketing blogging. But, what I didn’t realize is that the world of Notary knowledge also has several food groups. I’m just not sure if there are five…

Vegetables
Most notaries are like adolescent children. They hate taking tests, and hate eating their vegetables. But, vegetables are good for you say Jeremy and Carmen. Technical knowledge is the Notary equivalent of eating your vegetables. Learning about credible witnesses, spousal states, filling in the additional information sections on Acknowledgment forms, learning proper Oath verbiage — these are all nitpicky and very necessary forms of notary knowledge. Yet, most notaries are severely lacking on this type of knowlege. They can do the easy notarizations, but what happens when the going gets rough? Every Tuesday we publish blogs with technical knowledge for the benefit of the notaries. They get a free and valuable education. Unfortunately, notaries don’t want to read the technical blogs that much. They want to read about signing companies and some of our funny posts.

Meat & Poultry (vermin in the case of some)
We write posts about signing companies. Knowing which signing company is which, which have good reviews or bad, and how to get paid might constitute the meat of the notary business. Without this knowledge you won’t get fed, so you need it. Notaries love reading the dirt on signing companies, and it is not a waste of time at all. My advice is to learn to be quick at querying information on the web about signing companies on your i-phone in case one of them calls you up. You need to be able to find the informationin a snap, so you can know whether to work for them or not. Or, you can keep a handbook in your car and home of the various companies and keep notes that you update regularly about each company. That way you know if you should work for them. The vermin wise crack is a reference to signing companies who don’t pay up by the way!

Bread & Carbs
For me, marketing articles constitute bread and carbs. You need lots of marketing to give your business energy. Meat will make you strong, but Bread will give you long term energy the same way marketing gives you long term clients. We publish a Notary marketing article every Monday (Marketing Monday) for your educational purposes. Some of the articles are quite fun to read as well.

Milk & Dairy
I am not sure what type of notary knowledge can be represented by dairy products. Milk sounds like something that comes from a mother figure, so perhaps being mentored by a senior notary, or reading about the experience of a veteran Notary could approximate the equivalent of milk. We do not write many dairy oriented Notary articles, but perhaps we should! Ken writes the most in this category as he is the smartest notary I know!

Desserts
We write funny articles every Friday. Our Notaries love them. The total clicks for funny articles is nowhere near that for the ones about signing companies or articles showing who is making the most money and why. But, people always write in to us to thank us for the funny articles. They don’t generate the most clicks, but they generate the most smiles, and that is what counts on what we call Funny Friday over here at 123notary.

Condiments
Habanero peach aioli, mustard and Jalapeno honey dip might constitute condiments. Highly opinionated and controversial posts are good on a blog to raise people’s emotions and make them remember you. Once in a while we will post something opinionated or crazy, or tell a story about a notary who did something amazingly rude or illegal.

Summary
We hope you like the five food groups. Let us know if you have any suggestions. I’ll try to do more in the dairy department. I’m glad I wrote this little article because it reminded me to do so. Gotta go — dinner time!

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You might also like:

How good if your technical knowledge, should you learn more?
http://blog.123notary.com/?p=16683

30 point test synopsis
http://blog.123notary.com/?p=14233

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June 23, 2015

Loan Signing FAQ’s That Borrowers Ask

Many notaries go to the signing table unaware that there are many frequently asked questions that they might not know how to answer. I’m going to list a few here, but our list might expand as time rolls on. Feel free to contribute some FAQ’s of your own that you came accross.

(1) Why is my APR higher than my Rate?

(2) Do I have a prepayment penalty and where can I find that information?

(3) Where are my settlement fees and the costs of the loan documented?

(4) When is my first payment due?

(5) Can I cancel my loan? How many days do I have? How do I cancel my loan?

(6) Do I sign my name with my middle initial?

(7) Why do I have to sign my name this way?

(8) Do you know how to reach my lender now? I don’t have his number in front of me.

(9) Am I in a flood zone?

(10) Do I have mortgage insurance?

(11) If I am a spouse, which documents should I sign? I thought I was on the loan.

(12) Does this property need to be my primary residence?

(13) Can I lease this property out to others during the Mortgage?

(14) What is the penalty if I am late on any of my payments?

(15) Why is my information wrong on the 1003?

(16) How come the information is different on the Good Faith Estimate and the Settlement Statement?

(17) How much can my rate go up if interest rates for up for my Adjustable Rate Loan.

(18) When my Adjustable Rate Loan graduates, will it still have a cap, but not a gown? (sorry for the bad humor)

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April 22, 2015

30 Point Quiz — Jeopardy

Filed under: Loan Signing 101 — Tags: — admin @ 11:28 pm

In this section, we will test you on some, but not all of the concepts in the 30 point course. Once you feel you are ready, you can email us at info@123notary.com to schedule a time for your over the phone course. If you do extremely well on our test, we might either give you the certification icon, or offer you the certification icon at a discounted price if you didn’t purchase the certification course or loan signing combos in the past. However, we will not reveal how many points you need to earn this certification. Additionally, the content similar to the certification exam would be reflected more in the first 15 questions on the test rather than the last ones!

(1) Other than his loose-lipped girlfriend — The first place you should look for the Lender’s contact information.
What is the ________________ ?

(2) The first place you should query to find Poisoned Prepayment Penalty info without asking the wicked Escrow Officer.
What is the ________________ ?

(3) This type of holiday (mercifully missing meter maids) isn’t factored in to the 3 days a borrower has to cancel their refinance.
What are ___________________ ?

(4) This Mortgage term is similar to The Rate
(batteries, certain fees & closing costs not included; only available at participating locations, restrictions apply; must be 18 or over to enter)
What is _______________?

(5) This is the fee documented in the HUD that can help you get something on the value menu.
What is ___________________?

(6) This Deed lets you take your name off of Title; Think of it as the “Name off Title Affidavit” although you’d be “off” if you thought such a document existed.
What is __________________ ?

(7) This document proves that you reside in the subject property. An if you live in an elevator you’ll need 12 of them.
What is ____________________?

(8) This document is an identity thief’s biggest nightmare as it will have your social security number typed incorrectly and claim that you graduated from Harvard when in reality you went to school online at the University of Phoenix.
What is _______________________ ?

(9) This document makes the borrower agree that they’ll cooperate if clerical changes need to be made in the documents. But it won’t change your loan amount from $200,000 to $20,000,000; so don’t buy the private jet quite yet.
What is _______________________ ?

(10) This loan document takes jazz musicians half an hour to sign in 12 places. About the length of the world’s most annoying drum solo.
What is _____________________?

(11) Many Notaries complete signings incorrectly because they didn’t read this document or the Lender’s mind.
What is _____________________ ?

(12) If you do this on a document, you render it null, void or prohibited by law.
What is ________________ ?

(13) If the names don’t match, you must attach!
If the names on an ID and the documents are inconsistent, or you are doing a Power of Attorney signing, you might need to do this.
What is ___________________ ?

(14) If the borrower introduces you to his girlfriend, ________ you are the Notary. If your borrower introduces you to his girlfriend who is completely naked, call the Lender
What is ___________________ ?

(15) More than once, a secretary in a Title company lost a cashier’s check and the borrower lost their loan. Here is what the Notary should have done to prevent this situation from happening. And don’t get me started on how she misplaced the vanilla hazelnut creamer. Are we being sexist? No. At least a female secretary knows how to make coffee!
What is __________________ ?

(16) This how Samuel Edward Xavier, Jr. would initial.
What is _____________________ ?

(17) This document discloses the APR, and that ain’t no lie.
What is _____________________ ?

(18) The name on the drivers license was Tom Smith, but the Notary refused to notarize because his middle initial and middle finger were somewhere else.
What is __________________ ?

(19) The type of the Notary act must be recorded in the Journal. But, I swear this type of Notary act has no accompanying paperwork.
What is _______________ ?

(20) If black is the new green, this date in January is officially celebrated when St. Patty’s is not. Maybe this question is insensitive, but let’s make a Federal holiday, but not a Federal case out of it.
What is ____________ ?

(21) This type of Notary act can be used to get a university degree officially copied and notarized using a certified copy by document custodian form. It’s almost as easy as getting a fake college degree, or going to the University of Phoenix!
What is ________________?

(22) This type of Notary procedure is used to help elderly people who can’t sign their real name, or remember your name.
What is ___________________ ?

(23) This is a court appointed official that can sign over property when the owner refuses to cooperate in court. When your Quitclaim Deed quits, use one of these.
What is ___________________ ?

(24) This type of Notary seal leaves a raised impression, but not necessarily a good first impression in a piece of paper.
What is __________________ ?

(25) This type of witness is critical in assisting you if you are notarizing someone in jail who has no ID. Whereas your mother in law is just critical.
What is _____________ ?

(26) This section in an Acknowledgment form had a problem because an incorrect county was inscribed. Consequently, the Notary had to use a fresh Acknowledgment form and start all over again.
What is __________________ ?

(27) This action was committed when a signer swapped pages in a document that had already been notarized. The one time a guy chooses to be good at commitment.
What is _____________ ?

(28) This term describes the condition when a Notary will gain financially or in any other way from a document being signed.
What is _________________ ?

(29) This is a state of being where you fail to administer an Oath, omit a thumbprint (assuming you’re not a shop teacher), or forget to identify someone before notarizing them.
What is ________________ ?

(30) E&O insurance protects the Notary if they make an honest mistake during a notarization. But, doesn’t protect the Notary from being sued if they made a non-Notary error during the signing or if this other party made a mistake affecting the loan.
What is __________________________ ?

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You might also like:

30 Point Course Table of Contents
http://blog.123notary.com/?cat=3442

What’s the difference between a listing that gets 16 clicks a month and 100 clicks?
http://blog.123notary.com/?p=13185

A detailed look at the Elite Ninja Course
http://blog.123notary.com/?p=4621

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April 12, 2015

Point (17) The APR; Marcy Practices Explaining the APR

Marcy’s husband came into the room and said, “It sounds like a broken record in here, what are you doing?” Marcy, having grown up with CD’s couldn’t understand the analogy. Marcy informed him that she was practicing explaining the APR. But, that the definition was long and complicated, so she had to keep saying it over and over until it was natural. Then, tomorrow she planned to do the same thing. You get in practice, and you get out of practice just as easily, so Marcy decided to always be at the top of her game.

That night while they were sleeping, Marcy started talking in her sleep, “It doesn’t include closing costs… it is compounded annually.” If her husband hadn’t already been asleep, he wouldn’t fallen asleep from such a boring rant. Her husband was sleeping during this episode, but his subconscious heard everything and he started talking in his sleep saying, “Why can’t she just stay home and take care of Chuckie? snore…. snore… Chuckie…. snore…”

So, Marcy got to her next signing. They went through the documents. Then, she said, “Do you want me to tell you why your APR is higher than your Rate?” The borrower said, “Actually, our Lender already told us.” Marcy realized that her borrowers knew more than she did about loans. But, she didn’t regret practicing. It was one less thing to screw up on some future loan. At this point Marcy didn’t care how often she had to know something, she just didn’t want to screw up and lose her self-respect. It took about seven more signings until she had a borrower who was very confused. Marcy rattled off her definition of the APR and the borrower had to ask her to repeat it slowly. After a few tries the borrower kind of understood the inverse relationship of the equation and how some of the fees and closing costs were deducted. Marcy had memorized exactly which fees were included or excluded from the formula for calculating the APR and people were very impressed with her knowledge. A few asked her if she was an Escrow Agent.

Marcy was also smart by including a disclaimer in her speech stating that her explanation of the APR was a general one and wasn’t necessarily applicable to the borrower’s particular transaction in all ways.

The next thing you know the borrowers were asking Marcy for legal advice. Once again, Marcy played her cards correctly and told them that she was not an Attorney, and that she could not answer legal questions for them. Then, she suggested that they contact an Attorney. Another smart move. It looks like Marcy went from being clueless to being a very savvy and satisfied Notary in only a few weeks of hard knocks and studying. That night in her sleep, she went “z-z-z-z-z-z.”

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Point (17) The APR
The APR is one of the most frequently asked about loan terms that exists. Notaries and Mortgage Brokers almost always sound very poorly rehearsed when they explain this very basic concept. To avoid sounding unprofessional, try to memorize as much as you can about how the APR is calculated, and also try to rehearse a comprehensive definition of the APR so that you will appear knowledgeable to clients and to us when we test you!

Quick Facts

(1) The APR is documented on the Truth in Lending Disclosure.

(2) The APR is usually but not always higher than the Rate.

(3) Your definition for the APR should include the fact that it could include loan origination fees, closing costs, appraisal fees, inspection fees, points, escrow fees, notary fees, and other costs of the loan — those are some of the big ones.

(4) If you mention that the APR is often used to compare loans, you get points on the phone test.

(5) If you mention that the APR might be compounded, you get points.

(6) Several notaries have claimed that there is no government standard for computing the APR, it is up to each individual lender.

(7) You could also claim that the APR includes the interest rate, all fees and costs of the loan, and incorporates them all into a compounded Annual Percentage Rate.

(8) There are many ways to define the APR, the key is to mention all of the components in a clear and easy to understand way.

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When we ask notaries about the APR, the answers we get are very inconclusive such as:

“It included the fees”
“It is the cost of the loan”
“It has the interest and fees”
“It is different from the Rate because it is annual”

How unprofessional. If you are a professional signer, you need a professional definition.

A Mortgage Company’s definition of the APR
The Annual Percentage Rate (APR) is an interest rate that is different from the note Rate. It is commonly used to compare loan programs from different lending companies. The Federal Truth in Lending law requires that mortgage companies disclose the APR when they advertise a rate.The APR does NOT change or affect your your monthly payments. Your monthly payments are a function of the interest rate as well as the length of the loan. We provide calculators to calculate your monthly payment as well as your APR.

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Jeremy’s official definition of the APR
The APR is the relationship between the payments and the amount borrowed, minus the fees expressed as a compounded annual rate. 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.

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Fees included in computing the APR:
Points (discount and origination points)
Pre-paid interest
Loan processing fees
Underwriting fees
Document preparation fees
PMI – Private Mortgage Insurance
Appraisal Fees
Credit Reporting Fees

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Fees not normally included when computing the APR
Title or Abstract Fees
Escrow Fees
Notary Fees
Home Inspection Fees
Transfer Taxes
Recording Fees

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Although my delightful sounding definition of the APR sounds very professional, there is no reason why you shouldn’t come up with your own, and practice it until you sound perfect. One objection that I have is that Notaries sound unrehearsed when talking about the APR even if they have signed 10,000 loans. If you are a professional, then sound professional!

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You might also like:

30 Point Course Table of Contents
http://blog.123notary.com/?cat=3442

30 Point Course (18-24) Technical Points
http://blog.123notary.com/?p=14492

How do you explain the APR to a non-borrowing spouse?
http://blog.123notary.com/?p=4455

See what the April phoninar says about the APR. Unusual info…
http://blog.123notary.com/?p=4382

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