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dfye@mcttelecom.com
New Hampshire
681 Posts |
 Posted - 01/07/2007 : 10:39:50 PM
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The other thing about a note that may crop up in a signing is any riders (prepayment or otherwise) which change some of the details but becomes legally binding to the note since it was done correctly and more than likely would be signed by the borrower during a signing.
I tend to look for these riders before I go to the signing just in case the borrower is unaware of the details. I have seen it happen often where the lender will stick one in the package without borrower knowledge.
Legal Eagle Para Professional Services |
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Renee
Michigan
549 Posts |
Posted - 01/07/2007 : 01:16:39 AM
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=) Well, there's much to be said about the 'learning by fire' method - usually, it's a school where the 'students' tend to pay a lot of attention, and the lessons learned are usually learned well, eh?!
Is what happened illegal? I really can't think of a law that was broken - certainly not by YOU, any way. The L.O. is at risk - anything from nothing to being fired, but beyond that the major risks are the borrower's; that risk is that his signature seals the deal, hand-written change or not. Many Notes contain verbiage negating any such revisions, and many pkgs contain verbiage within their disclosures pertaining to 'verbal agreements' on the side. You're not likely to hear anything back on this, it really didn't involve you.
The only risk to YOU is - in the event this rate change does not get taken care of, and the borrower is held to the rate as printed on the Note, and he attempts to seek his resolve with legal action. It has happened to me where the borrower wanted to call me in as a Witness to what had transpired. In my instance, the L.O. was there in person, he wrote down on a piece of paper a 'revision' to the Note payment (saying the Note was wrong, and that the payment would be something other than what was disclosed on the documents).
The L.O. signed his piece of paper and gave it to the borrower - I NEVER SAW what that piece of paper said (and didn't WANT to!).
The borrower then wanted to complete the signing. I again presented the Note, pointed out the terms AS PRINTED, and stated "THIS document is THE document that legally binds you to the TERMS of this loan AS THEY ARE PRINTED here, regardless of any agreements you may or may not have on on the side." He then asks his L.O. "This paper you gave me, you signed it, your name is on this. I'm trusting you on this."
He then signed the Note. I said "You understand the terms as I've pointed them out to you?" He affirmed that he did.
What more can I do? That was HIS decision to make, and he was FULLY disclosed and fully understood. Well ... of course, the L.O. could NOT pull off whatever he'd written (and is was also a brokered loan) - the borrower attempted to sue him, wanted me to come in as a witness. I said "I will do that if you wish, but all I can attest to is that he handed you a piece of paper. Period." I never got called to court, and the borrower did tell me the L.O. was fired. That was the last closing I did for that particular mtg broker - I refused to do their closings, as this wasn't the first unethical act I'd seen from that office. |
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kcg
Indiana
33 Posts |
Posted - 01/06/2007 : 10:46:19 PM
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Renee, I thank you for passing along your knowledge and experience. I have only been doing this for 11 months.....but because I'm in an area where there are not a lot of signers, I have done quite a few - and it's a "learning by fire" experience. I so welcome any advice from anyone with experience under their belt.
I stated that the borrower spoke on the phone with the broker - not so.....she was on the phone with her Loan Officer who told her to make the change. I did not make nor initial any change on the Note so I am assuming I bear no responsibility especially since the Note is not notarized. I do realize that it is one of the most binding documents in the entire package. This is why I was very surprised that someone gave the ok to do it. I'm just curious as to whether this is legal or not? |
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dfye@mcttelecom.com
New Hampshire
681 Posts |
Posted - 01/05/2007 : 10:56:40 PM
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Going in "fully knowledgeable" works for me.
Legal Eagle Para Professional Services |
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Renee
Michigan
549 Posts |
Posted - 01/05/2007 : 8:12:03 PM
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The Note is about the only document that I would never make hand-changes on. The Note is THE single document that legally binds the borrower to owing the Lender money, under the terms it states. Everything else plays off the Note - including the mtg/dot. Just about anything EXCEPT the Note (or the terms of the loan), can be corrected, changed, revised - either AFTER the fact or at the signing, under appropriate directives.
Mtgs/dots, Huds, RTC's - these are all fixable, changable, revisable and UNDER the appropriate directive there is no reason to refuse to make corrections to them. Til's would need to be recalculated & redisclosed; I've never been asked to hand-change a TIl but if they have the math done, I wouldn't have an issue with it.
There are MYRIAD complicated areas of this business - a hundred things that have a consequence upon a hundred other things; there's state law and Fed law and notarial law and lending law and real estate law. This is why there is the 'just point & sign' paradigm that believes an SA should be a warm body with a stamp. MOST of the time, that's all you need to be - until something comes up that makes/breaks a deal at the table, THEN everyone wants you to know what to do & how to do it.
I think that's why there seems to be such a growing disparity between Signing Services and Title Agents, between fees paid by some as opposed to others, between fees charged by some as opposed to others. I often wonder where that disparity will eventually lead - and how much it's played into some states becoming 'Atty only' states. I do not disagree with EITHER paradigm - I think the only safe way to perform is either as a 'point & sign' OR as fully knowledgable - it's that half-way mark that presents the most liability for everyone.
Allow me this caveat - I'm an 'escapee', that's how I see myself  I spent a lot of really hard, stressful years on the inside of this industry, and trust me, I never fell out of bed knowing ANYTHING. We all have only one way to acquire knowledge - we learn it. I learned a lot because I did the time, not because I'm 'better' or 'more' than anyone else. I SHOULD know a lot of stuff, or it wouldn't say much for the time I've put in - so, please don't 'hear' me as if I were someone that needs to get over myself. I really never want to sound that way, and I think sometimes I come across that way - that's the downside of existing in written word only.
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dfye@mcttelecom.com
New Hampshire
681 Posts |
Posted - 01/05/2007 : 05:46:06 AM
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More likely than not a redraw may be forthcoming. You should never alter any critical document in a loan package. EVER!!! What would you do if it were your loan? Would you not want it to be correct the first time? Lower rates do change calculations throughout the package usually requiring a redraw anyhow. I certainly would not sign if the numbers were not correct, but that's just me.
Legal Eagle Para Professional Services |
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kcg
Indiana
33 Posts |
Posted - 01/05/2007 : 04:16:21 AM
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I did email the title company and told them the details. Neither of my contacts remarked on it other than to say "thank you".
How would you have handled this? I have the gal's name and number and made a note of it in my log. Do you think the entire package will have to be redone? |
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Renee
Michigan
549 Posts |
Posted - 01/04/2007 : 9:45:35 PM
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You certainly aren't in a position to offer legal advice to a borrower, but .... I'd have found a way around this. If this is a brokered loan (as you said), that Note does not belong to the broker, it belongs to the Lender.
ONE Note exists on the planet, the one the borrower signs, and it is tied to a long & complicated system. Changing the rate on the Note paper does NOT CHANGE the system - does not change the pymt amounts, does not change the TIL, etc, etc, etc. Any change to any part of the loan terms as stated on the Note (loan amount, interest rate, length of loan) normally demands a re-draw.
You did what you were told to do - but I would sure make myself some very detailed notes about who said to do what.
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kcg
Indiana
33 Posts |
Posted - 01/04/2007 : 9:07:08 PM
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Last night at a signing, the borrower noted that the interest rate on the Note was a fraction higher than on the Mortgage Broker Contract (6.357 versus 6.550). We called the broker from the table and she told them to cross out the interest rate on the Note and initial it.....she said she will fax them a new Note and they will resign and fax back. I loved it - it is totally legal, isn't it?
I sent an email to the title company this morning explaining what took place and keeping muy fingers crossed.
One thing I do is try to get the broker's cell phone before I leave for a signing.....it helps so much when you run into an issue. |
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USA - Changing Interest Rate on Note
