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April 2, 2013

April Phoninar: Selected Notary Topics

Here are some more topics that notaries need to learn about. We will be discussing some of these topics in phone calls with notaries this month.

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How do you give your mandatory Oath in a Jurat?

If you are executing a Jurat, you need to administer an Oath by law. The signer needs to sign in front of you for this act as well. You need to have them raise their right hand and swear under oath.

Do you solemnly swear that the content of this document is true, correct and complete to the best of your knowledge?

That is my choice of Oath wording, what is yours? Remember, they are not only swearing to tell the truth, but they are swearing that some content in some document is true as well!

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How do you keep a record of an Oath?

Have you ever administered an Oath? Yes, just an Oath. No!!! Not a Jurat with an Oath, just an Oath. The Secretary of State doesn’t tell us how to record that in our journal. But, I like to keep records. In an Oath there is nothing to sign. But, I made the Affiant (Oath taker) sign my Journal anyway just to be thorough. I indicated in my journal that he was taking an Oath, and indicated the topic and content matter of the Oath.

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Which notary act doesn’t require personal appearance?

Notaries hit the roof when I bring this one up. But, a Proof of Execution doesn’t require the principal to personally appear. A subscribing witness appears before the notary with a document signed by the signer. Hmmm. Dubious, but legal in many states.

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Which documents are “The Legals”?

Be careful. This is a loan signing question that signing companies will ask you to test if you know anything. You better know this. The following are the legals.

Deed of Trust
Note
The Right to Cancel
Truth in Lending
HUD-1 Settlement Statement

Q. Which non-recorded document in the legals DOESN’T ever mention the prepayment penalty?

A. The Right to Cancel

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How to avoid lawsuits?

A notary got sued because they were a signer in a loan where the lender allegedly cheated the borrower. The borrower got mad and sued everyone in sight. The notary’s E&O insurance wouldn’t even help because the notary didn’t make a notary mistake. Actually, the notary didn’t make any mistake at all. An attorney friend of the notary offered to represent them for $30,000. With friends like this — who needs enemies. This notary was left upstream without a paddle.

Another notary in the exact same situatition was almost sued, but the prosecutor backed off because the notary made the borrower sign a particular document before commencing the signing.

Q. What was that document?

A. A hold harmless agreement

This document should be worded by an Attorney and can save your life. It basically says that the borrower will not hold the notary liable for any damages if there are any problems with the loan. Wow!

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A notary avoids going to court

Once upon a time there was a notary who I have known my entire life (me). This notary did a notarization for an elderly signer who was thought to be defrauded by another party who got them to sign a document. The notary (me) got a thumbprint as it was his practice to do so. Just in case… The notary was investigated with a phone call from a P.I. The notary explained that they had a thumbprint for this particular notarization. The investigation stopped in its tracks and the notary didn’t have to go to court. If the notary had not taken the three seconds to get a thumbprint, he might have lost a MONTH in court without pay. Hmmm. Take a thumbprint — and get a hold harmless agreement.

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The APR

When notaries define the APR or explain it, some parts of the explanation are more important than others and should come first. There are different ways of explaning the APR. Below are a few. Your definition should start with something similar to the primary information and NOT with the supplementary, otherwise you are not being thorough or helpful.

Primary

(1) The APR includes the interest and some of the fees

(2) The APR includes interest and prepaid closing costs

(3) The APR is usually higher than the Rate because it includes not only interest, but fees

(4) The APR includes interest, PMI, loan origination fees, points, and other closing costs.

(5) The APR is the ratio between the payments and the amount financed after certain closing costs have been dedicted and is expressed as a compounded annual rate.

Supplementary

(1) The APR reflects the costs of the loan

(2) The APR is a figure that the Federal Government requires lenders to disclose on the TIL

(3) The APR is a figure used to compare the costs of loans, or to compare loans

Incorrect or incomplete

(1) The APR includes the costs of the loan (incomplete)

(2) The APR IS the cost of the loan (wrong — it reflects the cost)

(3) The APR IS the fees (nonsense)

(4) The APR is always higher than the Rate (wrong)

(5) The APR consists of closing costs, PMI, points, and loan origination fees (what about the interest?)

(6) The APR is the Annual Percentage Rate and is the same as the Rate except that it is computed Annually (wrong, there is much more to it than the fact that it is Annual or compounded — the fact that fees are deducted before computing this rate is the key feature and main reason it is usually much higher than the rate)

Most notaries do not rehearse their definition of the APR, so whenever I ask them, they always behave as if I caught them off guard. The problem is that they never studied their terms, and never rehearsed. How do you think a concert pianist would sound if they never practiced? They would never be asked to play a concert — just like a good Title company will never ask you to sign a loan for them if YOU never practice!

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How can you get your notary commission suspended or revoked?

Don’t lend your seal to your buddy in a pinch

Don’t send loose certificates in the mail

Don’t prestamp your certificates

Don’t forget to administer Oaths

Don’t notarize someone by a name that is different than what is on their identification

Don’t Notarize someone who didn’t personally appear before you

Don’t Use expired identification unless your state bases the acceptability of the ID on a number of years after the issue date

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Starbucks — a signing gone wrong

A lady goes to a signing at Starbucks and brings her three year old who spills a mocha latte over the Deed of Trust.

Q. What did the lady do wrong, and how do you rectify the situation?

A. The lady should NOT have brought her child to a signing. The mocha should sit on a chair, and NOT on the table because mochas have a habit of spilling on Deeds. Just visit the borrower’s copies and get a new Deed of Trust and everything will be okay.

Many notaries love doing signings at Starbucks. I do too. I love the atmosphere, the coffee, and the 1940’s music. My only recommendations are to keep drinks off the table, and to try the dark chocolate graham crackers — they are stupendous!

You might also like:

2013 February Phoninar
http://blog.123notary.com/?p=4054

A tale of four notaries in hospitals
http://blog.123notary.com/?p=463

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January 11, 2013

Hold Harmless: Good idea or not?

In a previous blog I discussed the need for us to protect ourselves from lawsuits that really have absolutely nothing to do with us. And, although thank god they are infrequent, when they do hit one of us they interrupt our lives and place great stress and hardship on us and our families. I feel that a hold harmless agreement is a great idea and it seems a few of you are using them. I had planned to work one up and post it here on 123notary but after discussing it with a few of you primarily to get your thoughts and feelings, I have now decided since we are all over the county that it would be in the best interest for everyone to draft up thier own or better yet prepare a rough draft and have an attorney go over it and make sure that it is legit and legal binding for your state and covers you as best as it can.

Things that you might consider in it would be that they are signing of their own feel will, that you a acting as an independent contractor and are not responsible for the content of the document, just to name a few.

Undoubtedly, if you do use it, It wont totally prevent you from being dragged into court and/or sued but I am confident that it will be helpful and have some sort of impact and hopefully deter the notary being dragged into court so readily,. And, if ever your duties and the role that you play are called into question you have a document that has been signed by the borrower/signer. And if the borrower is doing the suing (which so often is the case) their retained attorney might think twice before putting you into the equation of who they will be trying to sue. .

In closing, if you do decide to prepare and use this document make it 100% clear what your are duties are and what legal responsibilities you bear in notarizing one’s signature. Our signers and the public need to know.

Until next time…

Take Care and be safe!

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