Marcy had been to the county fair recently. She really got to thinking as she was lost in the corn maze. But, then it all started to pop. It took her ninety minutes to get out of that maze. All of the routes seemed the same, with twists and turns, but only one would get her out of that maze. It reminded her of her career. One thing that Marcy learned, is that the maze had several signs in various locations that showed the routes. She just wasn’t reading the signs carefully enough. There was one intersection with five paths, and she kept taking the wrong one since they all looked almost identical. Where’s your GPS when you need it? She took each path one by one until she got the right one. Corn mazes are confusing like that. As she munched on some grilled corn at the fair after her ordeal, she was even more determined than ever before to be the perfect Notary. And besides, she would have to face her neighbor Patricia who didn’t tolerate failure (or bad corn)!

At Marcy’s next signing, she noticed that the name of the signer was printed incorrectly on the signature line of one of the documents. Marcy had them initial next to their signature. The next day she got a call from the Processor. The Loan Processor was upset that the initials were to the right of the signature which got in their way of doing the changes. Never had Marcy heard of someone other than her cat being so picky. After all, she did her job correctly, she had the borrower initial and sign the correct way. What more can you ask for? Furthermore, they didn’t do any forbidden cross-outs. Marcy felt her work was perfect. The Processor wanted the initials below the typed name under the last several letters of the last name. This is how 123notary teaches initialing incorrectly printed names by the way. Marcy said that she would do it that way from then on. Marcy went on to tell Patricia what had happened and Patricia said, “If it isn’t one thing, it’s another — but, keep this up. You’re really getting somewhere now! And remember, a cornfield of 10,000 acres isn’t planted in a day.”

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Point 16 — Initialing
Most Notaries don’t understand initialing. At least they don’t initially. Although there are no formal rules, here are some guidelines.

The initials should cover all parts of the person’s name being signed.

Theodore T Tidmore would initial TTT
Nancy Nissenbaum would initial NN
Thomas T Carl Edison would initial TTCE

But, what if it gets complicated?

Thomas Smith, Sr. would initial TS Sr.
Thomas Jones, III would initial TJ III
Thomas DeLuna is a little more complicated. I choose TD since the last part of the name is connected.

But,

Thomas De La Cruz De Philippe Rodriguez Ramirez Gomez would initial TDLC DPRRG — oh my God.

Where do initials go?
Where do initials go, assuming they are not on a tree representing a relationship soon to be DOA? On loan document signings, it is common for borrowers to initial all pages of the Deed of Trust, sometimes the Note, often the Universal Residential Loan Application (The 1003), and sometimes other multi-page documents. There is normally a one centimeter line in the lower corner of the page where the initials are intended. But, keep your eyes open, because the special line for initials might not be where you expect it to be.

Initialing changes
Many notaries do not understand the name changing procedure. It is really up to the processor to do name changes. However, the notary must at a minimum have the borrower initial any changes. My best client during my loan signing days was a processor which is how I know the ideal procedure for name changing. It is easier than you might think.

Have the borrower initial to the right below the last several letters of the typed name.
Have the borrower sign the correct way where they are supposed to sign.
Inform the lender in writing and by phone that the name is changed to whatever it is changed to.
There is no need to cross-out. Cross-outs cause a mess. there is also no need to write in the correct name. The processor can do that.

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You might also like:

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

30 Point Course (17) The APR
http://blog.123notary.com/?p=14483

Can you notarize initials?
http://blog.123notary.com/?p=8269

Read about initialing in our industry standards blog entry
http://blog.123notary.com/?p=4370

Signing Agent Best Practices 63 Points
http://blog.123notary.com/?p=4315

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Our friend Marcy is very flustered by now. Everything she does is just plain wrong. But, she has no other way to make a living, so she just continues to, as her friend puts it, “Go out there!”

MARCY: Hi, I’m Marcy, and I’ll be your Notary tonight.

SALLY: Thanks for coming Marcy. Let’s get this signing started.

MARCY: Sounds like a song the way you say it.

SALLY: I listen to a lot of music. I’ve looked over the documents, and everything looks good except for the Flood Affidavit. I refuse to sign this no matter what.

MARCY: Oh boy. I’ll call the Lender. (ring-ring) Nobody answers. I’ll leave a message. “Hi, this is Marcy the Notary for the Rodriguez Signing. Sally Rodriguez is refusing to sign the Flood Affidavit.

SALLY: And one more thing. I don’t like one of the names in the Name Affidavit.

MARCY: Well, in my first Signing Agent course it teaches us to just cross-out any wrong information. Not sure what my second course says as I am only half-way through reading it.

SALLY: How reassuring. I hope it was not the part that was crossed out. I’ll just cross it out.

MARCY: Great. I’ll send these documents back with a note.

Marcy made several more mistakes here. Her self-esteem must be zero right now. Poor Marcy. But, it is her fault for not studying more! First, she did not put the unsigned flood affidavit on the TOP of the package. It was not found until after it was too late. Sally lost her lock as a result and had to pay an extra half a percent interest which cost her $20,000 over the life of the loan. This is partly Sally’s fault for refusing to sign, but partly Marcy’s fault for not putting the note on the top of the package with the document, so whoever opened the package would know there was a problem right away.

The second mistake Marcy made was allowing a cross-out. As a general rule, you cannot make cross-outs on documents. On Notary Certificates you can cross-out, although recorders don’t like it and might reject a Deed with a cross-out. But, on Legal documents crossing something out is as good as shredding the entire document in most cases. White-out is even worst — never use white-out no matter what.

However, there are times when Notaries can and should use cross-outs, so read the text!

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Point (12) Cross-Outs

Notaries are often too happy to cross-out and initial.
Some signing courses teach notaries to cross-out anything which is wrong and have the borrower initial. There are many Lenders (Provident Title being the most famous) that will not allow any cross-outs on any documents no matter what. You will ruin the loan by crossing anything out. So, ask your contact person for permission to cross anything out. If a contact person is not available, read the LETTER OF INSTRUCTIONS. In any case, cross-outs should be done as a last resort if done at all. If the signer won’t sign the document in any case, and you can not find out if the lender will permit them, maybe it is worth the risk to cross something out, if the signer will at least sign the document.

Wrong Names?
If a signer needs to sign his name differently than typed (with permission of the Lender) do NOT cross anything out. The processor will make the necessary changes, just sign as instructed.

The RTC
If the dates are wrong on the right to cancel and there are no borrowers’ copies with the dates left blank, you can cross-out and have the borrowers initial the change in dates. If the borrower signs where it says, “I wish to cancel” and there is no borrower copy, you might be forced to cross-out and have the borrower initial, and hope for the best as there is no other alternative.

Acknowledgment & Jurat Certificates
If a date or county is wrong in a Notary Certificate, it is better to start with a fresh certificate. But, if it is not possible or permitted by the Lender to use a new certificate, you are forced to cross-out and initial. On certificates it is the Notary, not the borrowers, who does the initialing.

County Recorders
The County Clerk is likely to reject a notarization if there are cross-outs in the notary section. For Deeds, be extra careful not to have any smudgy seals, cross-outs, or anything else wrong. Each County Clerk is different and some are pickier than others. As for those who insist on calling a tomato a fruit, don’t even get me started!

The 1003
Borrowers can usually get away with cross-outs on the 1003 as this is not a final document in the loan process. It is still unadvisable to cross things out as the Lender might reject the loan. Lenders often want to sell loans, and if there is anything wrong, then the 3rd party buyer might decline not only that loan, but all of the loans in the package from that particular Lender. So, try to avoid making a mess.

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You might also like:

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

30 Point Course (13) Call The Lender?
http://blog.123notary.com/?p=14421

Cross-out and initial?
http://blog.123notary.com/?tag=cross-out-initial

Cross-out happy; Not a good idea
http://blog.123notary.com/?p=4449

Common mistakes on 1003 and crossing out, RTC, TIL & APR
http://blog.123notary.com/?p=4553

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