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November 4, 2014

The Affidavit of Occupancy

An affidavit of occupancy is a simple document (sometimes notarized), that offers the borrower generally three choices. The first option (generally by making initials) is to have the property as a Primary Residence. This option typically requires the borrower to occupy the property, usually within 60 days; for a minimum of one year. The second option is to acquire the property as a second home, while maintaining a primary residence elsewhere. The third major option is to declare the property as Investment Property, not to be occupied by the borrower; but to sell or rent for rental income. It is unlikely that the borrower cannot accurately choose the correct option.

Care should be taken by the borrower to initial the correct choice. The wrong choice can result in financial and even criminal penalties at a later date. If the borrower is buying to live in, there is really no issue. However, when the intent is speculation or rental; it’s accurate disclosure or risk problems. Lower Mortgage Rates are available for owner occupied. This is why the intent to rent or speculate must be disclosed.

Affidavits of occupancy are especially relevant for small-time or independent real estate investors. If a borrower were to select “investment property” then choose to move in permanently – there probably would be no problem. Of course they would be paying a higher mortgage rate, lenders are rarely annoyed by such activity. It is the reverse, claiming to move in; getting a lower mortgage rate, then renting it out that causes problems.

Since affidavits of occupancy are not heavily regulated or governed by formal, industry-wide guidelines, they’re often originated in-house by the mortgage lenders or other real estate professionals. Thus, unlike the standardized HUD, there really is no uniform structure to the Affidavit of Occupancy. Actually it might just as well be called an Occupancy Certification, or similar. The only aspect that seems to appear with regularity is the need for the borrower to specify how they intend to utilize the property. This is generally done by initialing a specific paragraph, but some variations may call for a complete signature.

This form is a redundancy to similar assurances that appear in the Mortgage, namely, how the borrower intends to utilize the property that secures the loan. The occupancy statement contains strong language, 30 years in prison, fine of a million dollars, etc., per Title 18 US code Sec. 1001, and others. They are a separate document that the borrower cannot ignore, often notarized; and help the lender to charge a higher rate for loans that have greater risk. Typically, rental or investment property has greater risk. The difference can be half a percent that will be several thousand dollars or more over the life of the agreement.

They serve as an extra layer of protection against mortgage fraud and provide lenders with a clear chain of evidence that can be used to expose and prosecute such fraud. Whereas a homeowner might be able to make a plausible if unconvincing argument that he or she misunderstood the intent of the “occupancy question” that’s often buried within the structure of a mortgage settlement document, he or she has little chance of avoiding penalties for breaking an affidavit of occupancy. The affiants who “break” these (often) sworn statements risk being charged with mortgage fraud. At the very least the lender can demand full payment of all money due.

In processing this document care should be taken to be sure that all borrowers initial/sign the section that specifies the intended use of the property. Some lenders might require a non-obligor to also sign/initial. It’s probably a safe bet to have any signatory to the document also initial/sign the selection section.

It is the real intent of this document to curb the activities of those who wish to obtain property at a low mortgage rate for speculation or to become “little” landlords. Sometimes it takes years for the housing authorities and the lender to discover the fraud. Those false statements can and do incur harsh civil and criminal penalties. In addition to the mortgage fraud; housing violations are common. The form is simple and easy to understand. There really is nothing for the notary to “explain”. A notarized false statement is exactly that; in addition to being a crime.

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You might also like:

The Signature Name Affidavit
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Ken’s Guide to Deeds of all types
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The Compliance Agreement
http://blog.123notary.com/?p=15828

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October 16, 2014

The Right to Cancel done Wrong

The Right to Cancel done Wrong
It’s easy to make errors on the Right to Cancel, also known as the Right of Rescission form. Unfortunately this form must be free of errors prior to funding. There are several ways to make a mess of it. This entry will cover a few of the more common errors; I’m sure some creative notaries out there will comment on the aspects that I neglected to mention.

Perhaps the most blatant error is to have to applicant sign in the “I wish to Cancel” area and not on the “I received two copies” area. Sounds silly? But, it does happen. This is a real show stopper as escrow and lending are faced with a cancellation that they cannot ignore! You cannot just line thru to improper signature (redact/initial) and have them sign in the proper place, the page must be replaced and signed *only* in the proper place.

“Three Business Days” that’s the standard. But, like so many things that sound simple it has some not so obvious gotchas. Those three days, when crossing a Saturday, have different meanings to different lenders. Thus, that “right of rescission” calendar that you carry stands a good chance of being wrong. Some count Saturday as one of the three days, some don’t. Of course if it’s filled in, along with the correct signing date; no problem. But to be sure, when a Saturday is involved you have to ask the proper authority for them to supply the end date of the rescission period. Your calendar “might” be wrong!

Each borrower is supposed to receive two *executed* copies of the RTC. They are not executed by merely being in the borrower document set. It is required that you “fish out” these pages and have the borrower(s) sign as received and the proper dates are on the top portion of the forms. You don’t do that? You have done many packages without a problem. Well, if you want to be a perfectionist, leave the borrower(s) executed copies (2). Often there will be only one RTC per borrower – so go the extra mile and be sure to return two executed per borrower with the docs.

Sometimes the signing gets pushed back a day or so. The RTC must be changed to reflect the new signing date and the correct end of the RTC. If there are preprinted entries they get a thin line thru them and the borrower initials the end of the line, not you! Then, the correct dates are entered, neatly please. The same procedure for the borrower copies. Two borrowers? You need to correct and have signed four forms. It’s a good idea to print a few spare forms…..

On rare occasions I have been asked to have the borrower(s) *only* initial the date areas that will need to be changed, with no dates entered. I do not feel comfortable with this. However, if you do this; be sure to do exactly the same process on the borrower(s) copy.

Often the “checklist” will mention the RTC but it will not be included in the package. It’s only relevant when the security for the loan is the borrower’s primary residence. Thus, if the property in question is for investment or a second home; there will be no applicable RTC forms.

Always pay extra close attention to the RTC, it’s a federally mandated form and must be perfect or you will get a request to visit the borrower again. This is the one case where you cannot swap out the borrower copy page to correct a flaw; as that page too must be perfect.

You might also like:

The 3 days to rescind
http://blog.123notary.com/?p=19102

The 30 point course’s guide to the Right to Rescind
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Index of information about documents
http://blog.123notary.com/?p=20258

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June 6, 2013

Industry Standards in the Notary Business

Many notaries claim to understand the loan signing business well. But, there are many things that even experienced notaries don’t know. Here are some industry standards to think about.

(1) Cross outs
Some lenders allow them while others don’t. As a best practice, avoid crossing anything out unless you have gone through all other recourses without any luck. You should ask your contact person if they think it is okay to cross-out before doing so. If you can’t reach your contact person, see if that company allows cross outs. Remember, even if a company allows cross outs, it can compromise an entire loan and cause a redraw. So, don’t be “Cross-out-happy”.

(2) Initialing
This topic is not well taught, but really matters. I have received instructions that are identical from two unrelated parties. One was a processor, and the other was the owner of a signing company. Both instructed me that if a surname is spelled incorrectly in the signature section of a document, the initial goes UNDER the name. The processor noted that it should ideally go under the last several letters of the surname. Why? The processor or quality control people involved in the loan need to type in the corrected version of the name, and if you put initials where they are going to type, they will run out of space. This is a practical consideration and not a legal one. Initials go UNDER, so that retyped names can go to the RIGHT. This is a test question by the way.

(3) Order of documents
Most companies like documents returned in the same order they were submitted. Some are more flexible than others about this, but it is easier and more organized for them. That way they will know right away if they are missing something. Checks or notes should go on the TOP of the package and ideally attached to an 8.5 x 11 document so they don’t float away if unattended. Gusts of wind and careless coworkers walk by, bumping into things, and sending loose documents flying. I remember a client who lost a $20,000 check that I specifically remember putting in the package. Hmmm. Be careful — I am!

(4) Unsigned documents
If a borrower won’t sign a document, it should be returned at the TOP of the package. You don’t know who will open the package. Often it is a secretary, assistant, co-worker, or someone other than the contact person. If they don’t realize immediately that there is a problem, then there will be a delay fixing the problem. Remember — these folks are multitasking, and your loan is not the only one. Although you told them in a phone message that there is a problem, they still need the problem to be in their face.

(5) Hustling the borrowers
If a borrower doesn’t want to sign a document, don’t start off by pulling a “used car salesman” tactic. Call the contact person you have, i.e. Title, signing company, lender, etc. Leave a message, and allow 20 minutes for them to call you back. Call them once more if you don’t hear from them and wait another five minutes. If you still don’t hear from them, then you can tell the borrower about their three day right to cancel, and how if they don’t sign the document they might be facing a redraw. Remember, don’t start off by twisting the borrower’s arm — that is a last resort and is very rude and unprofessional to start off that way.

(6) Fedexing back the documents
If there is a problem communicating with the lender or other contact person, don’t delay Fedexing documents back unless instructed to. Many signers feel that it is “professional” to hold on to the documents until the next day until right before the Fedex deadline. Guess what, you might hear from the lender with instructions or you might not. But, what if you get busy and FORGET to dump the Fedex? What if you or a family member has a health emergency and you can’t drop the Fedex? Do you think of these things? Get rid fo the Fedex THAT NIGHT into the drop box at a staffed Fedex station if possible even if the staff are no longer there. It will get picked up. Remote drop boxes are sometimes risky, but boxes at Fedex stations are very safe. Think when handling time sensitive documents.

(7) Emailing documents back
If you get e-documents and have a question, don’t scan and email a document back. That is NOT secure. A hacker could do identity theft. Lenders are very uncomfortable with the idea that a notary would compromise their information. Use a phone or a fax, but not email for sharing information about the borrower. Remember, that when you received the documents, the portal was PASSWORD protected.

(8) Instructions
Many lenders have a letter of instructions when they assign a loan. The industry standard here is that there is no standard. Some lenders give written instructions while others don’t. Each one wants something different. Follow instructions to a tee, and you will be first on their list.

(9) Explaining things to the borrowers
If you are NOT in an attorney state, you can explain generic information about documents to the borrowers. But, do not give specific information about their loan, specific answers to questions about their loan, or commentary particular to their loan. Not allowed. Don’t even tell them their Rate. Just point and say, “Is this what you asked about?”. That way you are carefully refraining from telling them anything which they could accuse you of misstating after the fact.

(10) Confirm the completion of the signing with a tracking #
When you are done with a signing, leave a message with the Fedex tracking number.

(11) Title & Escrow prefer blue ink
I always used black unless specifically asked to use blue. But, many lenders nationwide prefer blue ink so that they can identify an original from a B&W copy immediately.

(12) Take the Fedex to a HUB.
Remote drop boxes are a recipe for disaster. Title will be all over you if the documents don’t get back on time. Find out where all of your local Fedex stations are. You could lose your best client if the documents don’t get back on time. Get a receipt too and save yourself a lot of problem. Not an industry standard, but it SHOULD BE.

(13) 40% of signing companies say: Don’t call the borrowers.
If you don’t call the borrowers, they won’t know that you are coming. Half the time, they won’t be ready for you either. So, unless you are absolutely sure that the company will pay you if the borrowers don’t sign, then think twice.

(14) Sign exactly as the name is printed
What if the identification doesn’t have the same name variation? Your Secretary of State might not take kindly to the fact that you notarized them under a name that is substantially different from what their ID reads. Proceed with caution and use a Signature Affidavit if necessary. Make sure that middle initials are clearly signed too so that the lender can sell the loan. If any part of the signature looks like it is omitted, reselling the loan will be a problem.

You might also like:

Notary Public 101 – a free notary course
http://blog.123notary.com/?p=19493

Fraud and forgery related to the notary profession
http://blog.123notary.com/?p=2294

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May 17, 2013

Why do I have to sign with my middle initial?

Filed under: SEO,Signing Tips — admin @ 11:03 pm

Do you get asked this question?

If your name on Title has your middle initial, is that the reason? I think so. But, what if your drivers license doesn’t have your middle initial? Then, you can not prudently be notarized with your middle initial. When signing loan documents, if you don’t sign exactly how your name is typed in the signature section, then you probably won’t get your loan. So, inconsistent middle initials can create an issue.

But, as notaries, you need to watch your signers carefully. Remember, you are there to babysit the signers. Unfortunately, most notaries are so unprofessional that they need to be babysat as well. But, you should know what you are doing.

At a signing, you should tell the borrowers exactly how they are to sign and have them practice on a piece of paper that is not part of their loan. Watch them. Make sure they don’t leave out any initials and make sure they sign using the applicable name variation.

Good luck

You might also like:

Initialing tutorial: Industry standards in the notary business
http://blog.123notary.com/?p=4370

The man who wouldn’t use his middle initial
http://blog.123notary.com/?p=4040

Cross out and initial, or use a fresh form?
http://blog.123notary.com/?p=19933

Notarizing multi-page documents
http://blog.123notary.com/?p=21423

What if the signature or notarization is in the middle of the document?
http://blog.123notary.com/?p=20525

Notary Public 101 from 123notary
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April 20, 2013

A detailed look at the NINJA course

Filed under: Ninja Theme Articles — Tags: , , — admin @ 8:00 am

We have a new Elite certification textbook that accompanies the elite test. We will soon be using a 30 point test to evaluate the skills of our higher level notaries. But, what is this new textbook like? The ORDER of the information is subject to change as we re-edit the course and add content later on.

119 pages of riveting information!

This course integrates ancient Zen Buddhist philosophy, Ninjutsu strategy, and exciting stories with higher level notary & signing agent knowledge for the refined notary public! Here are some of the topics covered in the course.

(1) Presentation
Learn the art of interacting with prospective clients. Learn what to say and what not to say. How to answer questions gracefully, and how to stand your ground. Show your knowledge without seeming like you are trying to. Operate like a professional and negotiate like a professional.

(2) Strategy
Learn which type of advertising pays off and which should be avoided. Which certifications to get and which to skip. How to craft your advertising for maximum results; Which additional services to offer such as Apostilles and Livescan; How to choose your clients well; Picking company names; Contracts. E&O insurance; Getting paid; Handling difficult companies; Hiring other notaries to expand your empire; Handling low-ballers with ease; Marketing with Facebook and Web Sites; Researching companies; When to say no;

Scheduling strategies: Learn about the

Timed appointment strategy
The spring-it-on-ya strategy
The no surprises strategy
Business models that influence scheduling strategy
Dealing with late e-documents
End of the month scheduling strategies
Beginning of the month scheduling strategies
Tight scheduling strategies
High-brow scheduling strategies

(3) Business analysis
Advertising allows you to pick and choose; Analyzing where your calls are coming from; Assessing the companies you work for; Late Documents; Dealing with cancellations; Dealing with late payers; Managing contacts; Optimizing your client base; What do the statistics that 123notary keeps really mean?; How well do you communicate and how does that translate into clicks?

(4) Mastering the ancient art of the notes section
Which adjectives help, and which hurt? Does mentioning years of experience help? Which quick facts will win you clients and which are a waste of time? Overall recommended structure of a notes section; Analyzing your best selling features; What not to put at the top of your notes section; Expressing your personal style of doing business; 19 examples of great personal information used in notes sections; Specialties expressed in detail; How to use bullet points for your additional information; Where do you write about coverage areas, and how detailed do you get? Radius verses counties? Closing statements — call me whenever you are ready! Spelling and mistakes; Example of a bad notes section; Example of a nearly perfect notes section; Commentary on 16 notes sections; Selling features compared in detail;

(5) Miscellaneous points
Smelling good; How to dress; Calling people back; Professional answering machines; Company names; Complaining; Asking too many questions; Call back etiquette; Asking about specifications before price; Negotiating with people who won’t meet your fee; Evolutionary path to success; Charge less to get experience; The close job strategy; MOBILE OFFICES; Don’t call until the e-documents are ready; FULL-TIME or PART-TIME; 123notary’s 30 point test; Last minute appointments; The A list strategy; Precautions; Embossing; Journal thumbprints; Answering the phone at signings; Refining your notes; Dual state commissions; How many certifications; Does Facebook help; How do you let people know you are a notary; Can you afford to be expensive; Get reviews or perish; Are you available enough; Do you keep all of your paperwork; Emergencies are where you shine; Errors with bad seals; Showing up late; Complaints; Wrongful complaints; Rebutting complaints; Being selective about working for companies with potential.

(6) Zen and the art of teaching others to be on your team
Master the ancient art of: Selection, training, scrutinization, and comparison.
Choose people with the right: Attitude, pre-existing skills, ability to learn, reliability, and personability

Where do you start training? Scrutinizing the work of your new notaries. Comparing them to your other trainees.

(7) Comparing notaries
People change over time; Examining your local list of notaries to see the differences in each service provider; Elite certification; Skills verses presentation; Online presentation verses life presentation; Thinking about comparisons while you are working; What did you forget to think about?

(8) Impressions, dreams and nightmares
Where the money really is; How long does it take to do each type of signing; How do you analyze traffic; Should you charge by the minute; How much ROI do you need on your advertisement; Making an impression; The borrower comes first; Meeting at a nearby cafe; Cancelling nightmares before you get involved; What to know about a culture so you don’t get in trouble; Fedex and drop boxes.

(9) Following directions
When to call the loan officer; Sample questions; When not to coerce the borrower into signing; When to continue the signing; Listening exercises, communication exercises, following orders without a fuss.

(10) Notary knowledge revisited
Acknowledgments discussed in detail; Jurats; Official wording and cross-outs; Loose certificates; Backdating; Document dates verses notarization dates; County recorders & recorded documents; Copies of a document; The names must match; Credible witnesses; Errors on the Acknowledgment; Oath wording; Signature by X; Journals; What the OPTIONAL information section is for in Acknowledgments & deterring fraud; Embossers; Thumbprints; Seals; 10 Grant Deeds in a single session; Notary Fraud; Notarizing the elderly; Notarizing a dead person; The 4 parts of an Acknowledgment certificate; Misdemeanors.

(11) Signing Agent knowledge revisited
Understanding: The 1003, The 4506; Apostilles, Attorney States; Changing a name on Title; Checks in packages; Cross-outs; The Deed of Trust; Elizors; Identity Affidavits; The HUD-1; Initials go where? Letter of instructions; The legals; Maiden names; Prepayment penalties; The Right to Cancel; Rescinding; The security instrument; Signature Affidavit; Spousal signatures; The Subordination Agreement; Thumbprints revisited; The three magical phone numbers; Signature variations; Witness states; When to call the loan officer; Witness closings; Documents that are typically notarized.

(12) The APR & First payments
Yes, an entire chapter about the APR in detail. Learn typical incomplete descriptions of the APR that even the most experienced Loan Processors, Title Agents, and notaries use on a regular basis. Learn a professional definition and learn all of the components that go into computing the APR one by one. Show the world how knowledgeable you really are!
When is my first payment due.

(13) Interviews with our finest notaries and title companies
We get amazing points of views and endless new information by getting input from others in the industry. And then we share it with you on the forum, blog, and in our courses! We interviews many title companies. Many of these companies will be working with us on crafting and endorsing some very relevant signing agent questions. Notaries often ask why it is important for them to learn particular facts. But, if a title company who hires notaries and pays well tells you that you better learn it, then there is no excuse not to learn it,right?

We have some information from Title companies as of April 2013. We will be adding more information every month including statements about things that notaries did wrong that caused a lot of trouble. We will also be adding multiple choice questions endorsed by specific Title companies over time.

The interviews with the notaries this time were about topics of concerned to regular notaries. How do you handle low-ballers? How do you handle people who don’t meet your fee? What is your best attribute as a notary? What made you become a notary? Could you describe your evolution in business and how you became successful? Hoe do you introduce the documents and do your loan signing presentation.

The answers given by the top notch notaries interviewed were truly inspiring, unique, and fascinating. You will love this section the most of all the sections partly due to the great information, and partly because it is the most light hearted section of the course.

(14) The 30 point test
This section goes over the 30 point test. Notaries who pass this grueling and difficult test can elect to have their scores published on their listing. Test topics will include not only notary and signing agent competency, but other areas as well. We learned that following directions and communicating are huge problem areas even for the most experienced notaries, so we will be focusing on those during the test. The test will be timed and might be over the phone or online — or both! Retesting will be allowed, but we do not know what the retesting fee will be. Purchasing the Ninja course / Elite certification gives you one chance at the test providing you take it within (60) days of your purchase date. Good luck!

(15) Apostilles and Loan Types
Learn what our best notaries have to say about Apostilles, Authentications, FHA, HELOCS, Investment loans, Loan modifications, Purchases, Reverse Mortgages, VA loans, and more!

Thanks for your interest and ENJOY our Ninja course!

You might also like:

Notary Public 101 – a free notary course
http://blog.123notary.com/?p=19493

Unique phrases from the Ninja course
http://blog.123notary.com/?p=14690

Elite certification will benefit you for the rest of your life
http://blog.123notary.com/?p=20770

Signing Agent Best Practices: a 63 point guide to being the safest and most thorough notary.
http://blog.123notary.com/?p=4315

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February 15, 2013

Signing agent best practices: 63 points

Here are a few tips about best practices. Maybe none of your clients will care, or maybe they will even adamantly dislike your best practices. But, if you have any self-respect, you will engage in best practices.

LEGAL & TECHNICAL BEST PRACTICES

(1) Hand written documents.
As a notary, it is not illegal to notarize a hand written document. The issue is if there are cross-outs, or blanks. Blanks make it illegal to notarize, but cross outs are a question mark. Personally, if you care about best practices, and not ending up in court for some stupidity that the signer did, then require typed documents with no cross-outs or blanks.

(2) Don’t pick the type of notarization for your signer
That is their job. Legally, you can not choose for them.

(3) Blanks in documents
Put a line through the blanks or refuse the notarize. (that was quick)

(4) Cross-outs
I would avoid notarizing anything with a cross-out. If you can do a cross out, you don’t know if it was there before the notarization or not. If there is one before, what prevents there from being more after. You can forge an initial without being detected, so cross outs are an indication that you need a redraw.

(5) Affixing your seal over wording
This is illegal in many states. The notary seal should be placed in an area of the paper where there is no wording, and do not sign or write over the stamp impression or you void it. If there is no space, then attach a loose notary certificate and make sure you document all pertinent facts on it.

(6) Loose certificates
NEVER send a loose certificate in the mail or hand it to a client. Always attach the loose certificate to the document, preferably before affixing your notary seal. Always document the name of the document, document date (if any), number of pages in the document, document description on the certificate in addition to filling in the standardized state wording, signing and sealing the form.

(7) Journals
Keep thumbprints in your journal. If your state doesn’t require journals, write them a letter about how poor their standards are and then go and buy a journal from the NNA. Also, there is a section called, “additional notes” in your journal (hopefully). Please use this to write down anything unusual about the signer during the signing, or anything unusual about the circumstances. Write it so thoroughly, that when you are in court five years later about that signing which could have involved fraud on the part of the signer, that you will have your evidence handy! Impressive!

(8) Oaths
If you do sworn Oaths, make sure to have the affiant (know this term) raise their right hand. Make sure to study up on formal Oath wording. Oaths are serious, and you are a state appointed official, so keep it official, okay?

(9) Embossers
If you don’t have a 2nd notary seal, get one. Embossers create a RAISED inkless impression. Use it as your secondary seal, and you can affix it to all pages of all documents you notarize for security. There are many frauds out there who do page swapping after the fact. To avoid page swapping (which could lend you in court for something they did after the fact) use an embosser. That way when you get a phone call 2 months later to notarize that separate page they are adding, tell them that you have to do the whole thing all over again. Sorry Charlie, that is a best practice!

(10) Learn the correct verbiage for power of attorney signings
But, there are four accepted verbiage variations. My favorite is Joe Doe, as attorney in fact for Mary Doe. Always call the lender to find out what type of verbiage they want at a signing. Remember, it is their loan, and just as long as you are not breaking the law — do it their way!

(11) Overseas documents
People overseas have bizarre standards. Some require the stamp to be on the document itself no matter what, but they didn’t put the verbiage in for your state. There is nothing LESS legal about attaching an acknowledgment form, but it is not about the law at this point. It is about whether or not THEY like it! So, find a legal way to handle their overseas the way they like. Once I manually wrote in the California Acknowledgment verbiage by hand and then sealed it. It was legal. Not exactly a best practice, but if they won’t accept best practices, then settle for “best practices under the circumstances”. Chinese are a tough crowd — you will find out!

(12) Initialing
Many Title companies don’t like suffixes such as Junior, or IV at the ends of names. But, if you are Louis Remy Martin IV, then the IV is part of your name, the 4th part of your name to be precise. Ronald R Rubin initials RRR. Get the initials to be correct and thorough. And if a lender doesn’t like it, should you break a best practice for their happiness? I don’t know of any laws about initialing, but making an initial of each part of the name is only logical, right?

(13) Signing for confused elderly people
If you sign for a person in a hospital, or someone who is just elderly. Make sure you have whomever calls you READ the identification over the phone to you including the expiration date. Have them read the name on the document too. Elderly people can never find their ID’s, and if they assure you that they have it, don’t believe it, they are lying. Trust me. I know! I am experienced and you are not! Otherwise you would be writing this blog. Do not notarize an elderly person if they can not move their arm on their own. Do not let their daughter drag their arm across a page that they are signing. You can use the daughter’s arm as a brace, but not a movement device. If the elderly person can not paraphrase what the document says, DO NOT NOTARIZE. And, by the way, the night daughter might be a con-artist who is pretending to help the elderly woman, only to be trying to cheat the old lady out of her money. Notaries beware!

(14) When in doubt, call your state notary division
Sometimes the handbook is just not enough. It doesn’t include all situations, and it is not written in English either. Legalese is not my mother tongue, what about you? Call them and bug them. Do it right or not at all. The NNA offers a good notary law hotline too, but get your information from the SOURCE and call your state notary division as your first choice!

(15) Safeguarding your seal and journal
Keeping it under lock & key is the rule of many states. A locking bag, a locking file cabinet. Keeping it in your car, etc. But, honestly, property DOES get stolen, and you need to protect yourself the best way. If your goodies are in your car, keep in in a place where it won’t get taken in a break-in. Keep it under the seat, or behind some large container in the trunk. I kept it in my trunk, but where the robbers could see it. Everything was in a little bag, and they probably thought it was a lap top and valuable. They were in a rush and didn’t inspect it before they took it. If it is at home, keep it in a locked file cabinet instead of hanging around in your locked bag. Go above and beyond the law for best practices. Keep your seal in a place where it is least likely to be “robbable”.

(16) Be an expert at your state notary laws.
Look them up in your state notary handbook. Keep this book with you. It is your bible when you are at work.

(17) Be an expert at credible witness procedure, and signing by X procedure in your state.

(18) Be an expert at all notary and signing related knowledge.
Don’t half know it or kind of know it. Be an expert, and it will show. You will be higher on people’s list if you are.

(19) Keep four phone numbers with you at signings.
In jail you get one phone call. But, as a notary you get many, and should have three phone numbers. The number of the signing company, the lender, the borrower, and the lenders’s wife. Just kidding about the last one. You need to call the lender half the time at a signing because they are such a careless bunch, that they will not have thoroughly prepped the borrower for the signing, plus there might be unexpected surprises on the documents as well. Be prepared!

(20) Using your seal on a blank piece of paper.
ILLEGAL. However, if you go to a jail, they require this for security. So, affix your seal, and then cross it out and write the words void. It is no longer illegal. It is the BEST way to clean up a WORST practice that the jail makes you do. I joked with them and told them that I thought it was funny that I was being forced to break the law by a guard at a jail. What is the world coming to?

(21) Check the signature on the identification
Does the signature on the identification match the one on the document? Did you check? Start checking.

(22) Bad identification?
Is the identification peeling? Is the signature above the lamination? Does it look like a fake identification document? Do you even have a reference guide to know if it is fake? It is your business to know. Get the NNA book on identification and drivers licenses. Also, take thumbprints. Standards for identification should be a government issued photo ID with a physical description, serial number, signature, and expiration date. Nothing else will do. Whether or not the government issuing the document need to be in the USA or not depends on what your state laws are!

(23) Thumbprints
Take thumbprints for all Deeds, recorded documents, power of attorney — as a minimum. Do this regardless of what your state requires. It could keep you out of court, and time is money. Get an inkless thumbprint pad from the NNA. Get this today. You should not be without it for one nanosecond. They can fake an ID, and fake a signature, but you can not fake a thumbprint.

(24) Don’t notarize for people who ask you to break the rules or who look suspicious.
Are you notarizing a kidnapper, or is the signer under duress? Stay away! It is not worth the money and you could get involved in a nightmare that just doesn’t end. What if someone asks you to notarize them under a different name variation than is what their identification says, and you tell them it is not legal. What if they say, “Oh, come on!!!”. What if they threaten to not pay your travel fee if you don’t? First of all your travel fee should be paid in cash at the door, or just leave. Avoid this type of people. They will make your life twisted.

(25) Don’t backdate
Signing companies will put you under pressure to do this if a borrower will lose their lock. Just say no. Tell them that their lock is their business and that your business is obeying the laws of your state which say, “No backdating“. Tell them that the security of your commission is not worth their convenience. Just leave. Don’t deal with these frauds.

(26) Don’t use white out
White out is a worst practice and will get you fired. Cross outs are a bad practice as well.

(27) Name changes the kosher way
A processor I used to work with instructed me not to cross anything out. Just have the borrower initial under the last several letters of their last name and then sign the way the new name will be typed in the document. After the fact, the processor can type in the new name. The cross-out simply doesn’t help. They just need the initial. The processor can cross it out in a way that they think is professional.

(28) Don’t explain the specifics of the loan or when the loan will fund
Just explain the basic definitions of loan terms such as APR, or rate if your state allows that. Specific information particular to their loan is for their lender to discuss with them. You can get in trouble if you make any explanations or commentary about information specific about their loan. On the other hand, you should be an expert at looking up specific pieces of information. APR is on the TIL and perhaps the Settlement Statement, so tell them that and show them where it is. The interpretation of what the information on the Settlement Statement is up to them and their lender, not you!

(29) Don’t notarize for someone who you can not communicate directly with
Some states allow the use of interpreters. I say you should not as a best practice. The interpreter could be lousy, and misinterpret something that you said. You are leaving yourself open to communication gaps. If you speak a little Spanish and can get by, and the signer understands you and vice versa, that works. Don’t create opportunities for communication gaps. I have traveled to enough foreign countries to know that people in different cultures communicate differently, they say yes when they mean no, they lie, they misrepresent, they save face, and fail to explain things thoroughly (especially asians who do the quickie explanations that leave out 95% of the meaning). I am not knocking foreigners — I just don’t believe half of what they say — and I don’t believe half of what Americans say either since Americans are a bunch of liars too! Speak directly to your signers! Learn oath verbiage in Spanish, or whatever your rusty foreign language is. Learn how to ask if you understand the document.

(30) Have a registered business name
We have notaries on the site who change their business name on our site every month. Each month it is the name of the month. This is illegal. If you have a registered business name that is registered with your county, then that is your business name, and you should have a bank account that takes checks paid to that name.

(31) Don’t draft documents
Unless you are an attorney, or authorized to draft documents, don’t get involved. You can get into bad trouble.

(32) Don’t give legal advice
If you are not an attorney, do not give legal advice. Interpreting laws, or suggesting that a person take a particular legal action might be construed as legal advice or the unauthorized practice of law.

(33) Consult an attorney before doing modifications
Although modifications could be legal in some states under some circumstances, they are often done in an illegal way, and YOU are not knowledgeable to know the difference, or to know what you can or can not do. Consult an attorney or stay away!

PRACTICAL BEST PRACTICES

(34) If you don’t get paid on time, contact the Title company.
They might fire or discipline the signing company in that case.

(35) Charging travel fee in cash upon arrival
It is ILLEGAL for a notary to have beneficial interest in the signing. However, many clients including Title companies will simply not pay the notary if the documents or loan packages don’t get signed, notarized, and funded properly. Unfortunately, that is illegal to put the notary in the position where they will only get paid if they notarize. It is actually a MISDEMEANOR in many states to ask the notary to do something illegal which could include having beneficial interest. If you don’t get your cash up front BEFORE you see the signers, documents or identification, you will be sorry. Get your cash, and THEN see the document. If it is incomplete, that is their problem. No identification, or the names don’t match? Their problem. Signer is in a coma and can not talk — their problem. Some situations will merit waiting time, and you will have no way to enforce your WAITING FEE if you don’t have your travel fee. You will not be in a bargaining situation as they will have the upper hand. If you have your $40 cash travel fee, you can say that you want waiting time when the clock strikes 20 minutes otherwise you are leaving. You have the power that way, and you DON’T have beneficial interest anymore (learn to define this term to be professional).

(36) Contracts with signing companies
Have your own contract that you make companies sign to get a better price with you. Make sure you indicate that if there is any ISSUE with the signing such as a last minute cancellation, no-sign, redraw, or anything unusual, that you get paid quickly. These are exactly the types of situations whre notaries typically get stiffed. So make them pay you faster in these situations so you don’t get stiffed. Even if you charge them a discounted fee. Make them pay within 10 days for these types of signings or charge them a penalty. No contract on your terms, then no discounts for you! Take the upper hand. You are a business person!

(37) Background check all companies who want to hire you
Check them on NR and the 123notary forum — OR ELSE… You will live to regret it if you don’t.

(38) Don’t put the Fedex in the drop box
Fedex is a great company, but they do hire human beings which is their downfall. Not recommended. If a driver changes routes, the new driver might goof (once in a long while) and that drop box in a remote area might not get picked up on time — or at all. Drop your Fedex at a staffed location. The deadlines are later, and it will be in the right hands 100%. Be safe.

(39) Printing on the road
This is a business best practice. If you can print on the road, you will be on time to more appointments, and can print last minute documents in a flash. You will be popular with lenders, plus gain people’s respect for being a prepared trooper. It is very expensive to have a comprehensive mobile office, so be ready to pay through the nose.

(40) Don’t go to houses that smell bad
You can end up in a hospital with a serious bacterial infection. If it is really filthy or smelly, tell them you will do the signing at Starbucks and that you have to leave at 5pm. Risking your lungs is not a best practice.

COMMUNICATION & ETIQUETTE BEST PRACTICES

(41) Don’t talk about the wrong things at signings
Don’t talk about politics or religion. Stick to the weather and traffic, but not in the context of complaining!

(42) Call back etiquette
Announce who you are when you call back. Don’t demand to know who they are until you are politely introduced yourself and explained that you received a missed call from that number. Also, don’t call people back only to tell them that you can’t talk. That is plain stupid and is a worst practice.

(43) Announce who you are when you answer the phone
Do you say, “This is Linda”, when you answer the phone? Or do you say, “Hullo?”. Be professional.

(44) When you confirm the signing, make sure all signers are there
If you do a signing where the wife is not on the loan, she might be on a few of the documents such as the Deed of Trust, Right to Cancel, and one or two others depending on what state you are in and who the lender is. Make sure you know where the wife will be during the signing, otherwise it might be a short signing. Remember, that you don’t know what is on the documents until you get the e-documents which is within minutes of the signing. Plan ahead and confirm the signing.

(45) Make sure your answering machine states your name!
Don’t make people guess if they dialed the correct number.

(46) Don’t ramble, make long pauses, or give opinions
Nobody wants to hear your life story, especially not me or my staff. Nobody wants long answers to quick questions. Nobody likes it when you ask them a question and you pause for 45 seconds to think. Don’t criticize others or give opinions either. Your job is to be a notary. Notaries don’t have opinions — or at least shouldn’t.

(47) Leave enough time between appointments
There is no point being late because you were delayed at your last appointment

(48) Determine how long your signing session will be.
Charge based on time. When you go to a massage therapist, you pay for a 60 minute session. If you go over 60 minutes, the next victim is waiting and they have to stop. Notary signings should be no different. Agree ahead of time how much time they want, and make them commit to that, or don’t work with them. If they want 90 minutes or 120 minutes, that is fine. Have them agree to that up front, and pay accordingly. Your job is not to be delayed endlessly. After all, your next appointment has the right to see your face showing up on time, right?

(49) Don’t have noise in the background when you talk on the phone
If someone calls you and there is noise. Apologize for the noise, and then walk to a quieter location. Don’t let the background noise continue otherwise you are unprofessional in my book.

(50) Don’t park in the driveway.
Your job is not to notarize, don’t put the Fedex in the drop box, and don’t park in the driveway. These are my three golden rules for notaries. Notarize only if it is legal to do so. Bring Fedexes to staffed locations, and park on the street unless there is a good reason why you should call the borrowers and ask if you can park on their driveway.

(51) Know your hours of operation
Never say that you are flexible. Tell people when you are available. I am available from 11am to 2am seven days a week unless I am already engaged, on vacation, or dead. That is a quick and professional answer. Don’t say that it depends. Don’t say that you sign anytime. People who say anytime have such restrictive schedules that they won’t sign any time other than 9-6. Flexible means 9-5:30. These terms mean absolutely nothing. Act like a professional and give people hard numbers when they ask a question — and don’t keep them waiting.

(52) Use your notes section to describe your service thoroughly
Don’t use empty adjectives like thorough and professional. Describe what YOU are like at a signing which is unique to you, so people can get to know you through your notes rather than reading something that looks like you copied it from 3000 other boring notaries who use exactly the same adjectives in exactly the same order. Talk about how fast your laser printer is. Talk about your exact counties or cities that you cover. Give people real information in your notes section, not some empty sounding sales literature that tells them nothing.

MARKETING BEST PRACTICES

(53) Get certified by ALL listing agencies who you advertise with.
If you advertise with ten companies, do all of the certifications. You look like an idiot if you can’t even be a professional at your profession!

(54) Having reviews on your profile from esteemed Title Companies looks great.
It is not a crime to have reviews from “nobodies”, but it is a best practice to have the people who review you be as reputable as possible. Their reputation is your reputation when they write a review about you.

(55) E&O insurance looks professional
E&O insurance looks professional, but is it? It makes it attractive for a company to hire you. E&O doesn’t protect you that much though. You can still get sued if the lender makes a mistake and the borrowers sue all parties involved. This happened before. You will not be covered. It actually encourages lenders to make claims rather than reducing your liability! E&O insurance makes you look good, so get some! But, is it a best practice? Being covered is better than being not covered, so I will call it a “better than nothing practice”. Or, I can call it something that looks like a best practice to the uninformed.

(56) Background screening
If your state doesn’t screen notaries as well as California does with the FBI, DOJ and KGB, then there might be some merit in a background screening.

(57) Advertise on all major directories
Have a well filled out profile, amazing notes, and reviews if possible.

(58) Call all local title companies
Call them up and announce yourself. Call them every month to remind them that you are good, and that you want to work.

(59) Get on the list of all nationwide signing companies.
Fill out the paperwork each signing company requires ahead of time. Make it a best practice to be on as many company’s lists as possible.

(60) Read notary blogs
The more you know, the more impressive and knowledgeable you will be. Know as much as possible to be the best that you can be. 123notary has an interesting Facebook, Linked in and Twitter profile as well. The more you read, the more you know!

(61) Don’t lie about your number of signings
Keep a count. Look them up in your journal. When someone asks you how many signings you have done, don’t ramble about how many years you have been in business. Nobody wants to hear that. Tell them how many you did. 1012 signings, plus there will be another one tonight! Don’t tell them you did two yesterday and three the day before. Nobody has patience to hear you count. Don’t think — KNOW!

(62) Guarantee your work
If you goof, go back and do it again for free. Make this a policy.

(63) Send complete bills regularly.
You need to know exactly what information goes on the invoices you send out. Name of borrower, loan number, address, date of signing, name of lender, etc. Bill regularly and keep good records, including the CHECK # of incoming checks. Otherwise you won’t get paid.

Tweets:
(1) Is it legal to notarize a hand-written document? What if there are cross outs?
(2) Blanks in documents? Put a line through it buddy!
(3) It is illegal to use your seal on a blank piece of paper. Yet jails usually require this! (cross it out)
(4) Notary topics: Hand-written docs, Blanks in docs, seal over wording, loose certificates, overseas docs.
(5) Don’t go to houses that smell bad #mobilenotary
(6) Notary contracts, fees at the door, background screening signing co’s, call Title if not paid on time.

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You might also like:

Notary Public 101 – a free notary course
http://blog.123notary.com/?p=19493

The 30 Point Courses – a free loan signing course
http://blog.123notary.com/?p=14233

Notary Marketing 102 – a free marketing course for Notaries
http://blog.123notary.com/?p=19774

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February 9, 2013

2013 Phoninar Quick Course

Filed under: Best Practices,Loan Signing 101,Posts With Many Comments — admin @ 11:26 pm

Here is the study guide for the phoninar!

The purpose of the phoninar is to help notaries learn some of the basics of signing without taking an actual course. Many notaries do not want to take a course, or they already took a course without mastering the material. My solution is to have a free quickie course to start them out with. If they can pass our over the phone test, we will keep them on the site. However, if they fail miserably, then we will most likely remove them from the site if they have a free listing.

Topic #1
The Right to Cancel
Most notaries have a rescission calendar that they refer to when calculating the last day to rescind. Few notaries know when all of the Federal holidays are. Many notaries also can not think clearly about how to calculate the last day to rescind mainly because they have never practiced calculating this date. If you want to come across as a professional, learn to give quick and accurate answers to simple everyday signing questions.

In a residential refinance, the borrower has (3) days to rescind not including Sundays and Federal Holidays. Be careful, Presidents day and Washington’s birthday are synonymous. Also, Flag day is not a Federal Holiday, but banks might be closed. Some lenders do not count SATURDAY as one of the (3) days to rescind, but formally, Saturday is considered a business day in terms of calculating rescission. Other lenders allow the Friday after Thanksgiving to be considered a holiday when legally it is not. Basically, each lender is different, but you have to know the basic laws effecting rescission instead of relying on what the handful of lenders you work with say.

Here is a list of Federal Holidays — memorize these for the test
(1) New Years Day, (2) Martin Luther King Day, (3) Washington’s Birthday, (4) Memorial Day, (5) Independence Day, (6) Labor Day, (7) Columbus Day, (8) Veteran’s Day, (9) Thanksgiving, (10) Christmas

Quick Facts
(a) There are two blanks for dates in the RTC which are generally filled in by the lender. Once in a while the notary needs to fill in these dates or correct them. The technical terms for these dates are the Transaction Date and the Rescission Date. Please memorize these terms for the test.
(b) The date of the signing is NOT included in the (3) days to cancel. If a loan is signed on Monday then Tuesday is day 1, Wednesday is day 2, and Thursday would be the 3rd or last day to cancel.
(c) Loans must be cancelled in writing by the deadline in writing by fax or mail, but not by email.

Pop Quiz
(1) Name all Federal holidays that come in January
(2) If a refinance is signed on the Wednesday before Thanksgiving, when is the last day to rescind?
(3) If a refinance is signed on a Friday, when is the last day to rescind?

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Topic #2
The APR
Most notaries know a little something about the APR, but this topic is actually very critical for your success as a signing agent. Every borrower wants to know why their APR is higher than their Rate. How good is your explanation. Here is what we want you to know for the phone test. Sure, there is more to know than what we are telling you, so learn the basics from us, and learn more on your own.

Definition: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.

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.

You might like:
Definitions of the APR
http://www.123notary.com/forum/topic.asp?TOPIC_ID=5844

Pop Quiz
(1) Which document contains the APR?
(2) What are some fees that might be incorporated into the APR
(3) Please create and rehearse your definition of the APR so that you will sound professional before your borrowers

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The Rate
The Rate or Interest Rate is more of a topic of confusion with the notaries than the APR although it is much simpler to understand and actually easier to find. Traditionally, the Rate is always documented in the Note. The note by definition discusses the Interest Rate, monthly payments, and prepayment penalties (if any). Once in a while there will be a Rider associated with the Note that might discuss these issues as well.

Inexperienced notaries typically claim that the best place to look for the Rate is on the Truth in Lending. Half of them say this because they are so uneducated that they can not distinguish between the APR and the Rate. The other half choose the Truth in Lending Disclosure because the Rate is actually documented there in many cases. But, let me ask you — if you are in front of the borrower and want to make a good impression — would you look for the Rate in a document where it sometimes is, or in a document like the Note where by definition it ALWAYS is? I vote for always because you will look like a fool if you go fumbling through the documents trying to find the right information in the wrong place.

Quick Facts:
(1) The Rate is always located in the Note
(2) In loans over the last few years the Rate is also generally documented in the HUD-1 Settlement Statement which comes later in the documents than the note unless it was sent separately.
(3) Some lenders include the Rate in the Truth in Lending, although this should NOT be the place you look for it first since it is not always there.

Pop Quiz
If you want to show the borrower the rate, which three documents would be where you would look, and in which order would you source those three documents?

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Dealing with errors in signings

Errors on Notary Certificates
From time to time in a signing, there will be an error in the notary certificates. Please keep in mind that handling an error in a certificate might be handled very differently from an error in the actual documents, or in the body of the actual documents, so please make the distinction.

If there is an error in the notary certificate — such as an acknowledgment or jurat certificate to name examples, there are various ways to rectify the situations. The problem is that each method has an upside and a downside.

(1) Cross-out and initial
This is a messy way to solve a problem on a legally significant document such as an acknowledgment. If a person’s name is spelled incorrectly, crossing out an initialing could get the document rejected by a county recorder. One notary had to cross-out wording on an out of state certificate that claimed that she personally knew the signer when in fact she did not know the signer. She crossed that out, and the document custodian was very upset. I told her to consider adding a loose certificate.

REMEMBER, it is the notary who initials changes on notary certificates and NOT the signers.

(2) Add a loose certificate and start all over
Legally, you can always add a loose certificate. However, the person or entity to whom you are submitting the documents to might not like it. Please distinguish between what makes your work legally acceptable and popular as the standards often do not match. The loose certificate has the advantage of having whatever name and wording you want it to have so you don’t need to cross anything out.

(3) Notarize the document twice?
Not illegal. You can do two journal entries and notarize twice. Notarize the original acknowledgment embedded in the last page of the document with the cross outs, and add a fresh certificate as well assuming you have a 2nd journal entry to match that one. Document this well in your journal for your protection.

(4) Redraw?
Redrawing documents is time consuming and expensive. It involves making new appointments and risking not getting paid. But, for an out of state that needs to be worded in a particular way, you can have them word it however they want it to be worded, so that no cross outs or illegal claims or acts are necessary.

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Errors in the right to cancel
Notaries typically do not know how to fill in the dates of the right to cancel. From time to time a signing will be postponed a day, and you need to change the two dates in the right to cancel which are the transaction date (the date you sign), and the rescission date (the last day you can legally cancel). Please try to appear educated and don’t say the signing date, or the cancel date as these wordings are not educated sounding and are also not clear.

To fix the dates on the right to cancel you can:
(1) Cross out, right the correct dates and have both borrowers initial
(2) Pull a fresh copy from the borrowers copies and start all over. The borrower’s copies might or might not have the dates printed in the blanks. If you made a mistake correcting dates, then sourcing the borrower’s copies definately makes sense.

==========================

Fees on the HUD-1 Settlement Statement
If someone wants to know where their fees and closing costs are, please direct them to the HUD-1 Settlement Statement. But, which fees are on the HUD. There is a huge conglomeration of information on the HUD. Too much to teach. But, to impress us, you should be able to rattle off a handful of fees on the HUD without batting an eyelash. Here are a few fees typically on the HUD.

Services: Abstract of Title Search & Title Charges, Appraisal Fee, Attorney fees, Document preparation, Notary Fees
Transaction Costs: Assumption fees, Broker fees, Credit reporting fee, Escrow account deposits, Escrow Fees, Loan Origination fees, Points or commissions, Settlement or closing fees
Inspection Fees: Lead based paint inspection fee, Termite inspection Fee, Other Inspection fees
Insurance: Flood insurance Fee, Hazard insurance, Mortgage insurance application fee, Title insurance
Payments: Interest, Cash payments

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Initialing
There are no legal standards for initialing. However, the purpose of an initial is to have an abbreviated way of writing your name in a document.

Andrew B Clay Sr.
His initials could be ABC, or ABC Sr. Which is better?

Some lenders don’t want a Jr., or Sr., on an initial.
However, if it is part of the signers name on Title, then it is part of their name.
The initials for Junior would be Jr. Therefor in my opinion, it should be part of the initial representing the forth word in the name.

What about Andrew Hooper III
I would have him initial AH III

There is no way to shorten the III part. But we don’t want to confuse him with his father and grandfather who might have been on title, so we will include the III unless asked by the lender not to. There are pros and cons in the different ways of initialing. Be thorough unless asked not to be by the lender.

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Parties involved in a loan
Many notaries don’t realize how involved the loan process is, and how many parties there are involved. So, if you make a mistake signing a loan, you might be inconveniencing more parties than you think. Here are a few:

Lender
Notary Public
Borrower
Relatives of the Borrower
Signing Company
Settlement Agent
Escrow Agent
Broker
Insurance Companies
Title
Loan Servicing Companies
Loan Holding Companies who purchase the loan from your lender (at great risk)
Attorneys
Inspectors
Appraisers
County Recorders
Oh… I almost forgot — the pets of the borrower
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If your stamp was smudgy
If your stamp (notary seal) isn’t clear on notary certificate forms, recorded documents might be rejected by the county recorder. If there are cross-outs, or anything that the recorder doesn’t like, they might reject the document as well which would mean that the notary would have to notarize the document all over again which is very time consuming and involves scheduling. Each county recorder is different and there are over 5000 different county recorders throughout the United States!

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Attorney in Fact wording
If Sam Smith is signing in his capacity of Attorney in Fact for Sharon Smedley, how would he sign? There are at least two ways: Here they are.

(1) Sam Smith, as attorney in fact for Sharon Smedley (I like this way best)
(2) Sharon Smedley by Sam Smith, her attorney in fact (ambiguous as to who you are in the signature)

Memorize the wording including the commas if you want to pass our phone test!

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Fraud & Journals
Not all states require you to keep a journal, but for your protection you need one regardless of what your state says. No state forbids you from having a journal. In your journal you record the date & time of notarization, type of notarization, document name, document date (if any), signers name and address, type of ID used, ADDITIONAL NOTES where you record anything unusual about the signing, or if you used credible witnesses, the signature of the signer, and a THUMBPRINT.

Quick Facts:
(1) If a signer is accused of committing fraud. OR, if a third party is accused of tricking a signer to sign something or of forging a signature, then the thumbprint in your journal could keep protect you.
(2) The thumbprint could stop an investigation in its tracks since you have evidence
(3) A thumbprint could drastically reduce the time involved in an investigation or court case. Imagine being stuck in court for 30 days with no income because you did a risky notarization for an elderly lady in the hospital who was on morphine and couldn’t think straight.
(4) Warning — beware of notarizing the elderly. Make sure they understand what they are signing and can paraphrase what is in the document for their protection and yours. You are not legally required to understand the contents of the document, but they can get into huge trouble, and drag you into the trouble if they are being tricked into signing something — especially a power of attorney or deed.

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Spouse not on loan?
This question is very state specific. New York deals with spousal issues differently.

As a general rule, if the spouse is not on the loan documents, they might need to sign any Deeds including the Deed of Trust, (Mortgage), Right to Cancel, Truth in Lending, Correction Agreement, HUD, and perhaps a few others.

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Define beneficial interest
If a party is a beneficiary to a document being signed, they would have beneficial interest. But, who else might have beneficial interest too? If you are a relative of the signer such as a spouse or child, you might benefit from the document being signed. If you are a notary who won’t get paid unless the document is signed, then you have beneficial interest in the document being signed which is illegal. To keep it legal, make sure you get paid regardless of if a document gets signed to keep yourself impartial and above board. A notary’s job is not to notarize, but to say NO when necessary. Stand in front of the mirror and practice saying NO!

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What is the difference between e-documents, e-signings, and e-notarizations

e-documents are documents that are sent to the notary electronically via the internet. A password and various types of downloading software would be necessary for e-documents as well as a high speed internet connection and a fast printer with good ppm.

e-signings are signings typically signed on a laptop with a wireless card. Some of the documents are still physical, and the journal used is physical.

e-notarizations require a special eNotary commission. Only about (9) states have such a commission. The signer is still required to appear before the notary in all, or almost all cases (varies over time and state by state — AZ at one point had some exceptions to the personal appearance law). ENJOA or an eJournal is used for e-notarizations. Unfortunately, county clerks offices are not always able to fulfill their legal obligation to be the custodian of eJournals after a notary’s commission is over. An interesting twist on some new technology that has many serious issues.

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April 23, 2012

Sending loose certificates is illegal

Sending loose certificates is illegal! 

People who work at Title companies are notorious for breaking the law in so many ways.  Here are some common types of fraud that happen at Title companies daily:
(1) Many will deliberately and shamelessly forge initials when the borrower forgets to initial.  I’m not sure how bad of a crime this is, but I recommend against any type of forgery — no matter what! 
(2) Most will unstaple documents that have been stapled which makes the completed certificate which is attached (a legal requirement), no longer attached (illegal) and hence a loose certificate (gulp). I have had multiple Title companies complain to me that they didn’t like the industrial staples I used since they were so hard to unstaple.  They don’t have a legal right to unstaple those notarized documents because the certificate must stay attached.  Part of the problem with unattaching certificates, is that they could get reattached to some OTHER document creating confusion, havoc, and hence having a document notarized without having it presented to a notary public and going through the procedure and journal entry.
(3) Many will ask a notary to send them a loose certificate if a document needs to be notarized again for some reason. Sometimes the seal was smudgy, or perhaps they needed to replace the document and get a new certificate for the new document with a new date.  If you are a “loose notary” who has a loose interpretation of notary law in your state, you might be breaking the law!
 
It all starts out with a pad of loose certificates!
You start out with our pad of loose acknowledgment certificates and jurat certificates.  Any serious notary will have this type of pad on hand as if their life depends on it.  Sure, the certificates are loose now, but that is okay, since they haven’t been filled out or stamped yet!  When you notarize a signature(s) on a document(s), you have the signer(s) signer the instrument, and then you have them sign your official journal of notarial acts.  Then, you fill out the certificate wording embedded in the document, or if that boiler plate wording isn’t there, you can add a certificate form which has the identical, or hopefully very similar boiler plate wording.  You fill out the form, cross you s’s, and dot your t’s, etc.  The minute you sign the certificate, and affix your official notary seal, then you may NOT let that certificate out of your site until it is ATTACHED to the corresponding document. It is illegal to unattach a certificate from a document, and very unkosher to unattach the staple for a notarized multipage document. What are your intentions?  Are you going to swap pages after the fact?  I can smell fraud a mile away!
 
What should you the notary do when asked to send a loose certificate?
It’s easy.  Someone at a Title company says they need a new Jurat certificate for the Affidavit of Domicile you notarized for them a week ago otherwise their loan won’t go through (pressure technique).  They want you to mail the loose certificate to them!  Tell them:
 
“No problem, just send me the document and the original certificate — I’ll shred the old certificate and add a new one… You can not have two certificates for the same document. The signer already signed the journal for this particular transaction and doesn’t need to sign it again for a certificate which is to be dated the same date they signed the journal.”
 
And they will say:

“Oh, come on, why does this have to be so difficult. That takes extra time and money.  Why can’t you just (break the law) and send us what we want (and risk your commission and risk being sent to jail or being fined perhaps more than $1000) for our convenience?”
 
And then you should say:

“If you need notaries to routinely break the law for your pleasure, you should ask your notaries some pre-screening questions.  Ask them if they are willing to break the law on a whim (your whim) and risk their commission and perhaps some jail time for your convenience. Ask them if they mind risking going to jail to save you from having to wait an additional 24 hours for a loose certificate… if they say ‘sure’, then they are the notary for you!”
 
My concluding advice
Don’t break the law for these rascals. They are not worth it.  You probably won’t get in trouble, but as a notary public, your position in society is to preserve integrity, and to safeguard transactions by making sure that the signer really signed the corresponding document in question.  If certificates get switched on documents due to fraud, or because you didn’t identify the document carefully enough on the certificate, then you are a liability to society and shouldn’t be a notary public. 
 
As a notary, you should be very sensitive to the fact that if you are notarizing multiple documents for a particular signer, those documents could get mixed up, and the signer could pull a fast one and reattach notary certificates from a document you really did notarize, to another similarly named document that you did not notarize. 
 
Multi-page documents can be taken apart and pages switched.  Title companies ROUTINELY take apart documents as a matter of standard procedure, and if you don’t emboss every page of everything you notarize, it would be easy for someone to replace page 5 with another similar looking page 5.  Assume that people are dishonest and shady, so that you can protect the virtue and integrity of your work. Document everything to a tee, and don’t give in to pressure to do illegal notary acts even if it means losing a client. You don’t want that client anyway in the long run — trust me!

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February 6, 2012

Fraud & Forgery related to the notary profession

Fraud and Forgery in the notary business 

There are many types of fraud that a notary might run into in their notarial career, forgery being one of the more common types of fraud. But, let’s take a closer look at what specific types of things could happen.
 
(1) Someone could forge your seal and pretend to be you.  It happened to me.  Unfortunately for them, they didn’t forge my signature very well, and didn’t copy my style of embossing every page either.  Putting technicalities aside, I bet they were not able to forge my quirky sense of humor either.  Notary seal forgery is not common. In my case, I think they used a really good photocopier.  BTW, a photocopier can NOT copy the RAISED impression of an inkless embossed seal which is why I used it on all of my notarizations.
 
(2) Page swapping — the old bait and switch routine.  I got called to notarize many multi-page documents. I put my embossing seal through all of the pages leaving a raised impression on each page.  I usually did these individually. Sometimes it is better to do all pages together so the seal goes through the same location in each page.  However, the seal comes out more clearly if you go page by page.  In any case, if you see a ten page document where all of the pages EXCEPT for page four are embossed, that would raise my eyebrows.  I have had many situations, where the signer wants me to give them another acknowledgment certificate for a new page they are adding to the document. I tell them that I have to notarize their signature ALL OVER AGAIN, and that is the law no matter how many times you say, “Oh, come on”.  With that attitude you might as well notarize your own signature as a non-notary!
 
(3) Title companies have a common practice of initialing for the borrower if the borrower misses an initial. It is “easier” than sending the documents back to the borrower.  Whether it is signature forgery to forge initials is a matter for an attorney to decide, but it seems pretty illegal to me to engage in initial forgery. I don’t think that anyone audits loan documents to see if anyone is engaging in initial forgery, but perhaps they should — many Title companies might get busted or investigated at a minimum.
 
(4) Refusal to be thumbprinted?  You must be up to something if you don’t want your thumbprint recorded. Maybe you have a fake identification card, right?  You can fake an ID, but you can not fake a thumbprint.
 
(5) Signature forgery.  If someone forged a signature on a document, they will have to have a fake ID and forge the same signature on the ID and in your journal. It would be a tough crime to pull off. I think that nobody in their right mind would attempt this.  Normally, people try to do crimes of fraud in private, and wouldn’t be willing to let other parties see what they are doing, no matter what!
 
(6) Notarizing out of state?  If you don’t have a commission in a particular state, you can not notarize there, with a few exceptions. Military notaries have special rules. A Virginia notary public may notarize out of the state of Virginia, but only for documents that are to be recorded within the state of Virginia. In any case, from time to time we will hear rumors that a notary public is operating illegally in a bordering state where they are not commissioned, and people want us to enforce the rule. I tell them to report the individual to the state notary division where the Notary in question is commissioned.
 
(7) Charging more than the state maximum notary fees is illegal, and charging more travel fee than your state allows (roughly eight states have restrictions for travel fees) can get you in trouble too.
 
(8) Filling out an Acknowledgment or Jurat form when you never saw the signer and never had the signer sign your journal is a really serious act of notarial misconduct.  You can lose your commission and get fined or jailed for this.

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November 20, 2011

The Notary Signing Agent Loan Signing Process & Pitfalls

The Notary Signing Agent “Loan Closing” – Process, Preparation & Pitfalls

Perhaps it would be best to cover the events, from the desire for a mortgage, or re-finance, to funding; chronologically, as the timeline is the only common aspect. The borrower completes a Loan Application (more on the importance of this later), and numerous other documents. These are usually signed at the location of the Lending Institution (bank), in the presence of the Loan Officer (LO). Once approved by the bank, the processing becomes very interesting indeed.

The LO’s bank will lend money to the borrower based on the Mortgage as collateral for the loan. Banks do not like to take any risk whatsoever. What if the borrower does not have “clear title” to the property? To protect the bank, the bank requires the borrower to pay for “Title Insurance” issued by a “Title Co.”. So the next step is for the LO to contact a Title Co. to arrange for the insurance. Note that from this point forward the Title Co. “calls the shots”; as the Title Co. is the only party taking “risk”. If they do not issue the necessary insurance, there is no loan.

Eventually, after the loan has been approved, and the Title Insurance has been approved – usually about 2-3 weeks after the Loan Application; the stage is set for the actual processing of the paperwork. Various documents must be notarized, and it is the role of the Notary Public to check the ID’s of affiants on notarized documents; and there will be many! The mortgage is always notarized; and frequently two copies are processed; in case the messenger sent to record the mortgage at the local county clerk’s office loses it on the way. That actually does happen.

At this point the documents, typically from 80 to 125 pages are computer generated and ready for the Notary Signing Agent to bring to the borrower. But first a qualified NSA must be selected. As it is the Title Co. who is most interested in proper completion of the paperwork, they take on a leadership role to get the documents signed by the borrowers. But, not wanting to actually deal with, or have to select notaries, they often use a Signing Service (SS) to actually choose the notary.

At this point the Signing Agent gets a call asking if they are available to be at so and so location at such and such a time. If not, they call the next agent on their list. If it works for the agent’s schedule, they negotiate a fee. That fee is based on the requirements to process the Loan
Package. Variables include the number of pages, the distance to the borrower, time of day (extra for me to be there at 7AM on Sunday), etc. Also discussed are how and when the package is to be sent to the Signing Agent – overnight, usually via FedEx or E-mail. The latter
has usually has an additional fee. Once an agreement is reached, the Signing Service, on behalf of the Title Company sends a “work order” to the Signing Agent.

Now the ball is in the Notary Signing Agent’s court. Everyone who did anything prior to this point is depending on the NSA to get the borrower’s signatures and initials completely, and to do the requisite notarizations accurately. The NSA must also make sure any “non borrowing spouse” is present to sign docs as required by state law. There is much for the NSA to do. First the borrower must be called to confirm the “work order” as to contact information and address and to verify the scheduled time of meeting; and that all will bring proper ID to the table. Next, the NSA must receive and print two sets of the loan documents (borrower copy and bank copy). A good NSA will explain what will take place at the “signing” and remind the borrower to have their photo ID (and a copy to submit) ready for the meeting. A really good NSA will ask the borrower what name is on their ID, as the property “vesting” name sometimes differs from the name on the borrower’s ID. If so, the NSA contacts the Signing Service to get the documents corrected, or the borrower finds appropriate ID matching the documents.

Finally, usually with barely enough time to print and drive; the E-document is received and two sets printed. If there is adequate time after printing, some NSA’s like to pre-notarize the documents so they are able to devote their full attention to the signing process. Map in hand, GPS programmed, hoping the traffic is light; the NSA departs for the scheduled meeting with the borrower. A good NSA always uses a GPS to find the borrower’s location and does not get lost in the process. After dark jobs usually require a powerful flashlight to see house numbers in
residential neighborhoods.

The NSA shows their ID and requests the ID of the borrower(s). Then, the page by page completion of the documents begins. A single flaw, omission, or unreadable date (usually by the borrower) will often result in a complete re-draw of everything. The experienced NSA knows to “swap a page” from the borrower’s copy to allow a redo of a page with an error. The process usually takes about an hour, depending on the size of the Loan Package, how much the borrower wishes to read, and the amount of information to be entered. Often the borrower has questions and “attempts” to contact the LO. If, as is sometimes the case; the borrower receives the package directly, days prior to the Notaries arrival; they are expected to read it and ask their LO any questions. But, some borrowers want to ask questions of the Notary Signing Agent.

Title Co.’s and Signing Services tell the NSA to “explain the documents, but do not give legal advice”. It’s a really fine line between the two. Most NSA’s choose the side of caution and only define terms and assist the borrower to find documents with desired information (the interest
rate, the APR, the pre-payment penalty). At this time, the computer generated replacement for the original hand written Loan Application is signed. This is one of the most important documents. It is on this document that the borrower has made claims about their credit
worthiness, salary, etc. Any false statement on this document would allow the Lending Institution to demand the loan be paid in full immediately! Also, many of the numbers on this document will be wrong – because time has passed since it was originally signed – some debts
shown will be higher or lower.

Having been on several thousand signings the environmental aspects of the borrower’s premises are worthy of comment. They range from a well lit kitchen table in an air-conditioned room – to, and I am not making this up – a fruit fly infested room where the borrower pursues his
hobby of “naturally” raising Iguanas! There are many other pitfalls. In New York, the Notary is mandated to only use black ink; but Pinellas County, Florida will not record a mortgage unless all signatures are in blue ink! I have been asked several times (verbally, of course),
to “backdate” my notarization date, as the papers have expired (borrower out of town, rate lock expired, etc.). In New York that is called Forgery, a class D Felony – worthy of seven years in prison!

Finally the documents are signed and notarized, the borrower given the Notary Oath – and it’s off to FedEx to ship the documents to the Title Company. Well, not exactly. First somedocuments must be faxed, (lots of them if it will fund same day); and an airbill very carefully
prepared. Phone calls must be made to report success or failure “at the table”, and an invoice prepared. At last all is ready and the papers are handed off to FedEx.

Although the borrower thinks the “closing” has been completed – it actually has not even started. If I was a true “closing agent” – I would have a checkbook and be able to write the check on the spot. It used to be done that way many years ago. Now, the papers are received by the Title
Company and they review them for errors. If their included documents, often called “junk docs” (because they tend to be 4th generation Xerox copies), are completed and notarized correctly they approve issuance of the Title Insurance and pass the paperwork to the Lending Institution. At that time the papers are again reviewed, this time the review is for the papers that originated from the bank. The bank, with the knowledge of Title Insurance approval; will at last do the real “Closing” – which allows for issuance of the check that the borrower has been seeking.

Thus, the Notary Signing Agent is an integral part of the process. Important documents are notarized to assure the validity of the signatures. No system is perfect. A notary can be fooled with a good forgery. So can a State Trooper, with a phony Driver’s License. But, the bulk of the
impersonation potential is filtered at the source by the NSA’s diligence in pursuing valid ID and using their stamp and embosser on documents. Borrowers like to sign papers in the comfort of their own home/office – at their convenience. The licensed and professional notary, though a part of the system that caused the recent mortgage “melt down” disaster; was never a causative factor. If not for the diligence of professional notaries pursuing the NSA craft, things would have been much, much worse.

http://kenneth-a-edelstein.com

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