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December 20, 2016

The Universal Residential Loan Application — AKA, the 1003

The Universal Residential Loan Application is a common loan document. Also known as the 1003, this document is very disturbing to the borrowers as it contains routine errors in its personal information about the borrower. This document goes over where the borrower is from, their age, where they went to school, what their income is, and social security number. It is very common for the clerks who create this document to make a plethora of mistakes.

There is often a blank page on the 1003 that says, this page intentionally left blank. That bothers borrowers as well. Some like to put a diagonal line through that page.

Backdating. Sometimes the 1003 is backdated or the lender will leave instructions not to date it at all. Why? Because the borrower, most likely, has submitted a more user-friendly form to the borrower, of which contains the same information that the 1003 does. At a closing you are often pretending that you are signing the 1003 when the borrower filled out an earlier version of the application several weeks prior to the signing. As a Notary, just don’t backdate Notary documents. But don’t worry, this one is not a Notary document, and you aren’t backdating, the borrower is.

Signing and initialing. There are different formats for the 1003. Many of the pages have one-centimeter initial lines in the bottom right corner. Keep your eyes peeled, as the different formats of this document have different arrangements. On some variations of this document, one of the pages is blank for the most part. Sometimes, you will need to have the borrower initial and sign the same page (which seems strange). Sometimes the initial lines aren’t easy to see. Sometimes you initial on top. Just make sure to check the document through and through. If you are not sure if a particular document needs an initial, it is generally a good idea to have the borrowers initial it. When in doubt, initial.

The good news is that the information in the Universal Residential Loan Application is not binding. Just make sure that the information in your Closing Disclosure or HUD is correct because that is final and binding information.

To learn more about loan documents, you can visit our free online 30 point course which goes over all of the major loan documents in a loan signing.

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October 26, 2016

Most loan documents haven’t changed since the 80’s

Most Mortgage loan documents haven’t changed since the 80’s. Which ones would you change? With the advent of the Closing disclosure, the HUD and the Truth in Lending were eliminated. But, did that really improve the loan industry? It’s the same information in a different form. Personally, I liked it better the old way. The music was better in the 80’s as well, but that’s a different story (or song).

Then we have Deeds of Trust. Each one is a different length. They range from two pages to 54 pages. Wouldn’t it be easier if there were a standardized length for a Deed of Trust. And who is going to sit and read all 54 pages and actually understand it.

Next, the 1003 always has wrong information in it. Shouldn’t it be required by law to double check your work if you work in a Mortgage or Title house?

The Signature Affidavit is another document I don’t like. If you have a legal name, you should use that name on all of your documents. It’s too complicated if you keep changing your name around with variations. Mathematicians like to have a single name for an entity. The minute you have multiple names it becomes difficult to identify that entity especially if writing computer programming code. Personally, if your last name is a common name like Smith, Gonzalez, or Hussein, you should definitely use a middle initial. But, life is easier with email addresses. A single email address cannot be assigned to more than one person. Personally, I think that the government should make us have an official registered email address that they patrol for spam. That way, we can be reached without having to go to the mail box. Times are changing, but our government and loan brokers are not.

The Flood Disclosure is another document that I find funny. I think it would be ironic if you spilled your Pepsi on a flood disclosure of all of the documents in the stack.

Speaking of irony, hairstyles have gotten shorter since the 80’s, but loan document packages seem to have gotten longer — and with more fax backs.

I think that loans need to be simpler and that the government should step in and have some standards. But, in the mean time, we’ll do what we can. Let us know if there are any changes to loan documents that you recommend.

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You might also like:

Ken’s tips for the Closing Disclosure
http://blog.123notary.com/?tag=closing-disclosure

The 4506, Name Affidavit, Deeds, and more documents explained
http://blog.123notary.com/?cat=2074

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