Section 3: Documents and Processes – Understanding Loans, Title and Escrow

Survey of this Section

One of the most important distinctions between a Professional Signing Agent and a Notary, is a Loan Signing Agent must have familiarity with the processes and documents associated with Real Estate Transaction and Mortgage Loans.  This understanding is critical in assuring that the signings go smoothly and conclude successfully.  Think of this section as the “meat and potatoes” of the course.  At the end of this course, we want you to be familiar with all the most important documents you will see as a notary or professional signing agent and we want to assure you are very familiar with the processes you will be involved in.  Let’s look at some of the details.  

• First, we explain how Loans, Title and Escrow work, and the overall process.  Part of this is explaining some of the concepts such as Rescission Rules, MMI and PMI, and other things you will commonly see.  
• Next, we walk through a typical Buyers Package or set of documents that you will often see when someone is buying property.  Our point is to explain to you the purpose of these documents so you can more easily explain to your clients what they are signing, in a way that is permitted to do so.  Some of the more than thirty documents what we go through includes:

Disclosure Documents ~ Closing Cost Details ~ Jurats ~ HUD-1 Settlement Statement ~ The Note ~ Notice of Right to Cancel ~ Itemization of Amount Financed ~ Deed of Trust ~ Security Instrument ~ Instruction To Escrow/Title/Closing Agent ~ Escrow Waiver Letter ~ Letter of Loan Transfer Document ~ Hazard Insurance Authorization, Requirements and Disclosure Document ~ Notice of Right to Copy Appraisal ~ Compliance Agreement ~ Acknowledgement ~ Flood Hazard Determination ~ Tax Record Information Sheet ~ Servicing Disclosure Statement ~ Notice of Assignment, Sale, or Transfer of Servicing Rights ~ Hazard Insurance Endorsement Letter ~ The Housing Financial Discrimination Act ~ Borrower’s Certification & Authorization ~ Request for Transcript of Tax Return ~ Request for Taxpayer Identification ~ Signature/Name Affidavit ~ Affidavit of Occupancy ~ USA Patriot Act Information Form ~ Equal Credit Opportunity Act Notice ~ Notice of Furnishing Negative Information ~ Amortization Schedule ~ Uniform Residential Loan Application ~ Credit Score Disclosure ~ Allonge ~ Subordination Agreement ~ Warranty Deed ~ Affidavit- Death of Joint Tenant ~ Grant Deed ~ Interspousal Deed ~ Disclaimer Deed ~ Certification of Trust ~ Rescission ~ Confidential Information ~ Truth in Lending Disclosure ~ APR ~ Confidential Information ~ Nonborrowing Spouse Documents ~ Power of Attorney Notary Signings

We will also discuss other types of Signings, such as Reverse Mortgages, Split Signings, Jail or Prison Signings, Structured Settlements, Debt Consolidation, E-Signings, Power of Attorneys and Trust Documents.

More Detailed Process 

We highlighted in Section Two the importance of the Escrow Offices in the process.  Let’s revisit this.  Initially an order is opened with the escrow officer and then the escrow officer will open the title order with the title company. The escrow officer prepares the instructions and sends them out to all parties that are involved. The escrow officer receives the preliminary title report from the title company and they check all of the pertinent information such as the manner in which the owners are vested, the taxes, and the legal description of the property. They also look at liens against the property and the owner.  The escrow officer is responsible for verifying that the taxes are paid up-to-date, and for obtaining demands for liens and judgements that need to cure.  In this case “cure” means to be paid off or somehow removed from property records.  Escrow will also order the demands from the current lenders of record. A demand is just that.  It is a letter demanding payment in full, which shows how much is due to pay off the loan at the close of escrow. 

During the escrow process the escrow officer will be working on making sure that everything is in place, to honor the title company’s commitment to deliver a clear title with the lender’s lien in first position, which means it is not secondary to other loans or encumbrances.  They are also responsible for getting the signing instructions for the borrower, the lender and the sellers in any purchase transaction.   

Once the loan officer, underwriter, and processor jobs are done and the loan documents are drawn they are usually sent to the escrow officer first. The escrow officer will then prepare the HUD-1 Settlement statement. The lender may have prepared, and estimated settlement statement based on the loan fees, but it is the job of the escrow officer to actually to prepare the final HUD-1 Settlement statement because they have their finger on all of the expenses involved in the transaction. 

A document called a HUD-1 is important to this process.  We will see an example shortly. The HUD-1 Settlement Statement is a document that lists all charges and credits to the buyer and to the seller in a real estate settlement, or all the charges in a mortgage refinance.  After this document is prepared the escrow officer sends it to the lender for final approval. Following the approval, the documents are drawn, prepared and sent to the escrow officer who sends those documents to the signing agent or to a signing service. 

When the documents are ultimately returned to the escrow officer, they process the documents and send the required documents back to the lender. If the borrower is coming in with funds, then you need to be aware with what type of funds are acceptable. In some states there are Good Funds Law, which dictates that all checks going to title companies are only to be certified funds and not personal checks. 

When the title order is opened, the title officer initiate the search of the property and the preliminary title report is issued. Title officers are responsible for making sure that if there are any clouds on the property, if there are any liens or anything that will keep them from reporting the documents that they’ll work with escrow to take care of removing those liens anything that will be on the property that is not acceptable to the lender. Once the loan has been approved and the documents returned and the lender funds the loan, those funds are sent to the title officer and that is the money that the title officer works with to pay off the liens on the property. 

Now that’s different than the bills that the escrow might be paying off.  In many areas the title officer and the escrow officer will be working together in the same company. A lot of title companies do have both the title officer and escrow officer under one roof. They will work together at the end of the transaction to make sure that the property is completely free and clear, following the instructions.  Then all of the documents recorded, and all of the money disbursed. 

As you can see, here are a lot of people involved with the loan processing and a lot of moving parts to make it all come together.  You as a Professional Signing Agent is the final cog in the wheel!  Our emphasis at Notary2Pro for Error Free Signings, is because if the Notary does something to disrupt this process or make a mess, it can cause the whole thing to fall apart!  We never want to be the cause for everyone that worked hard before you to lose their work and interest and of course cause hardship to buyers, borrowers, or sellers in this transaction! You are very important you are to this process. 

We highlight this also as a constant reminder to always read your instructions, know the rules and regulations of your state, and always do the best you can on every single transaction. 

Important Things to Know

Rescission Rules 

Rescission Rules are a right to cancel established by the Truth in Lending Act (TILA) under U.S. federal law.  The right of rescission allows a borrower to cancel a home equity loan, line of credit, or refinance with a new lender, other than with the current mortgagee, within three days of closing.  These rules will be spelled out in the Truth In Lending Disclosure, which we will provide more information and examples below.  

Non-Borrowing Spouse 

This concept while it sounds simple, can be confusing.  A non-borrowing spouse means, well exactly what that, the spouse will not be borrowing as part of this transaction.  Even though the borrower is married the spouse will not be signing on any of the obligatory documents such as the Note.  Why?  Usually this is because their income and credit were not used to approve the loan.  So, don’t forget, the non-borrowing spouse will not be signing the top of the 1003 because they are not a borrower.

However, there will be several title documents that they will sign because they are on title.  The lender needs to have the non-borrowing spouse confirm knowledge of the lien being placed against the property even if they are not a borrower. 

Most lenders will advise you or will mark the documents they want the Non-Borrowing Spouse to sign. If the spouse’s name is not typed under any signature lines, and you have no instructions as to what documents the non-borrowing spouse is to sign, here is a list of the most critical documents they will sign:

1. Mortgage or Deed of Trust (because they are either on title or may have an interest in the title if in a community property state)

2. All Riders attached to the Deed of Trust or Mortgage.

3. Truth in Lending Disclosure

4. Notice of Right to Cancel

5. HUD

And…..sometimes they will sign the following:

6. Itemization of Amount Financed

7. Document Correction

8. Compliance Agreement

Always have them sign items 1 through 5 and any other documents following your instructions.

MMI AND PMI

Mutual Mortgage Insurance (MMI) and Personal Mortgage Insurance is an insurance policy paid for by the Borrower/Buyer for the benefit of the Lender. What this insures is, in the event a Borrower (the Buyer) defaults on their loan, the Lender then has recourse with the insurance company to be paid. They inform them of the Borrower’s default (no longer making payments) on the loan. The insurance company then pays the lender off and assumes the risk of the loan. 

The Federal Housing Administration (FHA) insurance payments include two parts: the upfront mortgage insurance premium (UFMIP) and the annual premium remitted monthly – the Mutual Mortgage insurance. The UFMIP is an obligatory payment, which can either be made in cash at closing or financed into the loan, so that you really pay it over the life of the loan. It adds a certain amount to the buyers monthly payments, but this is not PMI, nor is it the MMI. When a homeowner purchases a home utilizing an FHA loan, they will pay monthly mortgage insurance for a period of five years or until the loan is paid down to 78% of the appraised value – whichever comes later. The MMI premiums are made on top of that for all FHA Purchase Money Mortgages, Full-Qualifying Refinances, and Streamline Refinances. As you will see on FHA loans, there is almost always an MMI premium charged to the borrower. This is charged upfront in one lump sum, or added to the monthly payment for a period of time determined by FHA. This allows lenders who have recently been afraid to make loans secure in the process, knowing that if the borrower defaults, they will still be paid.   

These premiums are paid for until such time as the lender has determined the Borrower will have less than an 80% owed on the value to the loan. This means that they will owe less than 80% of the market or appraised value of the home, also known as Loan to Value (LTV). If you are questioned about this premium, you may tell the Borrower/Buyer that without that insurance policy in place they would not be able to obtain that loan. 

Borrowers who do make additional payments towards an FHA mortgage principal, may take the initiative through their lender to have the insurance terminated using the 78% rule, but not sooner than after 5 years of regular payments for 30-year loans. PMI termination, however, can be accelerated through extra payments or a new appraisal if the house has appreciated in value.

Title Insurance

Let’s look at another important area of background and a second type of insurance we will deal with, Title Insurance.  Title insurance is indemnity insurance against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage liens. Title insurance is principally a product developed and sold in the United States because of the comparative deficiency of the U.S. land records laws. It is meant to protect an owner\’s or a lender\’s financial interest in real property against loss due to title defects, liens or other matters. What that means in practice is it will defend against a lawsuit attacking the title as it is insured, or reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy.                                    

Prior to the creation of title insurance buyers in a real estate transaction bore sole responsibility for ensuring the validity of the land title held by the seller.  If the title to the property was later deemed invalid or found to be fraudulent, the buyer lost his investment! Obviously not a great situation.

Owner’s Policy

There are two types of Title Insurance, the first is the Owners Policy.  This policy assures a purchaser that the title to the property is vested in that purchaser and that it is free from all defects, liens and encumbrances except those listed as exceptions in the policy or are excluded from the scope of the policy’s coverage. The liability limit of the owner’s policy is typically the purchase price paid for the property.  Title insurance remains in effect from the date of recording the transfer documents to the buyer until such time as the, now owner, sells the property.

Lender’s Policy

The Lenders policy of title insurance is only issued to mortgage lenders.  Generally speaking the Lenders Policy follows the assignment of the mortgage loan.  So when you see an Allonge and a Corporate Assignment of Deed of Trust or Mortgages, you know that the lenders policy of title insurance is now going to protect the new lender. 

Major Documents – What they are and how to notarize them

Armed with an understanding of your important role as a Notary and Professional Signing Agent and an clear understanding of the processes involved, in the following section we are turning into a details examination of the documents, what they are, their purpose, things to look out for and how to notarize them.  At the end of this section, we want you to be prepared to present a confident face to the signer, your client, and to be able to perform and error free signing.  

A preliminary word, no loan package is the same.  Documents and document requirements vary.  As you gain experience you will learn to navigate these differences with great ease.  We have chosen to start with the documents in a typical loan package, as this is the most common types of signings most Signing Agents are involved with.  We will finish with documents you may see in other circumstances.  Pay attention to the following areas so that you are off to a good start in your signing agent career.  

Acknowledgments, Jurats and Affirmations 

Acknowledgements and jurats are a critical part of the document signing process. As notaries we are called upon to notarize many different types of documents some of which may require us to take an oath or an affirmation from a signer. What form we use that we have acknowledge that we have witness the signings is directly dictated by this process. 

The true definition of an acknowledgement is a formal declaration before a notary public that the instrument presented is the free and voluntary act of the party executing it and the signatures on the document are genuine.  

A certificate of an acknowledgement must contain:

• The state and county where  the document is executed (that’s important to remember it is where its executed)
• The date of execution 
• The name of the signing parties 
• It also has to contain 
  • The printed  name and signature of the notary public 
  • The seal or stamp of the notary public ; and 
  • The expiration date of the notary public commission

Many states now require, when more than one acknowledgement is being attached to a document it must contain information, which directly ties it to the signed document. This would include: 

• The name of the document that the acknowledgement is being attached to, 
• The signers’ names, 
• The date of the signing, and 
• If there are multiple pages of the acknowledgements it should be given a page number. 
  • So as an example, let’s say that the document is three (3) pages. The separate acknowledgement that’s being attached to it as the last page would be marked page four (4) so of course the acknowledgement will contain all the required information for the notary public. 

After these pages, the first documents you will see will be both an acknowledgement and a jurat.   A jurat is defined as an attached written statement of the notary public that the oath or affirmation was taken before the notary public. Taking the oath or the affirmation is an indisputable requirement regardless of what state you are commissioned in (important!).  You must administer the oath. The oath is a promise that one is making a true and correct statement to the best of their knowledge. 

Look on our Graduate Website with videos available on how to acknowledgements and jurats.  

Note that the rules of your state govern how you should take the oath, whether you have the person taking the oath raise their right hand or not, and the wording of the oath. Please before taking an oath learn those rules. It’s imperative that you adhere to them. There are three components when distributing an oath and they are: 

1. You want to ask the signer to attest to the truth of the information given—that goes to accuracy. 
2. You want to ask the signer to attest to the truthfulness of who they are, which goes to the component of identity. 
3. Ask the signer to attest that they did not make any false statements—that is for the truth. 

Affirmation

An affirmation is an oral or written declaration made by a person who has an objection to taking oaths that they are certifying underneath penalty or perjury the declarations are true.  Now the contents of an affirmation must include again:

• The venue, which is the state and county where the document is executed.
• The date of the execution.
• The name of the signing parties.
• It also has to contain:
  • The printed name and signature  of the notary public
  • The seal of the notary public ; and 
  • The notary public’s expiration date on their notary commission

There is a difference between an oath and affirmation. A typical oath will read: 

“Do you solemnly swear that any statements made when signing this document is true to the best of your knowledge and belief so help you God.”  

A typical affirmation would be: 

“Do you solemnly, sincerely, and truly declare and affirm that the statements in this document are true and accurate to the best of your knowledge and belief—this you do under penalty or perjury. “

The Seal 

On most documents there are specific areas where the state, county, signer names, date of signings, notary name and signature lines are included. This is usually found at the bottom of the documents, below the signatures of the document signers. 

There is always an area near the notary’s name that is large enough to contain your notary seal or stamp. When you place your seal or stamp in this area it must be clear, dark enough to photocopy, be complete, and must contain the state where you are commissioned, the name of the notary public and the world seal or a picture of the state seal on it. 

If you fail to place your stamp on a document, the documents have not been officially notarized and they will not be useable.  There are several items that must be included on the documents in order to be notarized. Let’s review, it must have:  

• The name of the signer, has to be typed, printed, or stamped below the signature line. 
• The signature must match the name of the signer on the documents, 
• This must also match the identification. 
• It also must contain the printed name of any witnesses 
  • Their names should be printed under their signature line. 
  • Also, the notary printed name must appear below their signature line as well. 

If you ever have doubts on whether you’re supposed to stamp the document, try to remember it this way, the documents that are completed and or signed by you as the notary, but are not signed by the document signer will NOT be stamped or sealed. 

You are never to stamp or seal any document that you are not actually notarizing and that brings up one point that there are occasional companies that send out a document and they say, “We want to make sure you are a commissioned notary so please make sure you put your stamp on this page.” No! And if they do that say, “sorry, but it is against the law” because it is. You are not allowed to apply your stamp or seal to anything other than those documents that you are actually notarizing. Furthermore, a document that is signed by a document signer and you as a notary that does require your seal. A document signed by the document signer, but not by you as the notary is not to be stamped or sealed.

Additional Points

Here are some additional points to remember related to acknowledgements.  While fairly obvious, remember you should put the state where you are commissioned and where the signing is taking place.  With regard to the county, it must be the county where you are standing when you are doing the signing. Remember it is not the county necessarily where the property is located, and it is not the county where you are commissioned. It is always the county where your feet are planted while you’re doing the signing!  

Where the date may be blank, you will need to know how to fill this in. So, after the word on that would be the date—always the date of the signing.  Remember, you absolutely must not change that date!  Never, not ever backdate. You can lose your commission and be civilly liable by putting a date other than the acknowledgement in there. 

Where “Before me” is blank, you will put your name as the notary public and then “personally appeared” will be the name of the person or people.  You can list more than one person on the acknowledgement and these will go here. 

Let’s look at the cross outs, which are important.  Where it says “Who prove to me on the basis of satisfactory evidence to be the person (in this example this is just one person, Marvin Reynolds) who name is subscribed. You are going to cross through the “r” and then when it gets to the acknowledged-he executed the same and his authorize capacity and that by his signature. So you can see that whatever does not apply you put a line through. So, obviously, if it’s more than one person than it would be whose name are that they executed, etc. 

You will swear under penalty of perjury underneath your state. Some acknowledgements have that, others do not. If you receive one that is for another state and it says that you “promise to certify underneath penalty or perjury under a state other than your own, remember you can not do that!  You are not commissioned there, so you are going to need to use a separate acknowledgement, which will contain the wording that is required by your state. 

Now as you can see, this is a separate acknowledgement, and it does have this box on here that’s the description of the document. What you put here is, first of all, the name of the document for example a power of attorney.  Then you write whatever date is on that document.  Remember in this case it is not necessarily the date of the signing. Let’s say the power of attorney has four pages to it, well this actually because it’s being attached to that document it shows that the number of pages is now actually five. 

This is for additional signers.  Let’s say that there are two people signing that power of attorney but only one of those persons is appearing before you.  If you are acknowledging just Marvin’s signature not his wife’s, then you would put the wife’s name under additional signatures because as you can see here it says “additional signers other than those named in the notarial certificate”. 

Tip

Remember to go to your state and download these state specific documents.  Keep them available to use.  You will have them when you’re ready, and you can fill them in on your computer, print them, and then you need not scramble at the last moment to try and find one when you need it. 

Jurat

What you see here is an example of a jurat.  As you can see, we are using the state of Arizona forms, but most of these are common throughout the United States. Remember that on Jurats, the words that are subscribed and sworn to or affirmed will appear on the document.  When indicating “subscribed and sworn” it means that you are going to be administering an oath to the signer and it’s filled out the same way as any acknowledgement as you can see. 

The Closing Disclosure

The Closing Disclosure is a five-page form that describes, in detail, the critical aspects of a mortgage loan to the borrower.  Some of the elements of the document are the purchase price, loan fees, the interest rate, estimated real estate taxes and insurance, any closing costs and other expenses.  For borrowers this is one of the most important documents in the loan package and one they will want to review carefully.  

If you were involved in Real Estate, or purchased or sold a home prior to 2015, you may be familiar with the old HUD-1 Settlement Form.  This form was replaced in 2015 by The Closing Disclosure form.  This is the form we will review here.  

Because this is such an important document, we are going to review briefly the five pages of the Closing Disclosure Form so you will have basic familiarity. Then, we will go through these in much greater detail with examples.  While you may not need to understand all of the intricacies of this document, your familiarity with this will very much help you conduct good signings.   So, let’s review:

Page1

This first page talks about just the basics of the loan.  It shows the loan amount, the interest rate, the monthly principal and interest payments.  You will also see information about the term of the loan and whether it’s a purchase, a fixed rate, an adjustable rate, and what type of loan that it is. 

Page 2

On the second page this form goes through the closing cost details of the loan costs and other costs involved in the transactions. 

Page 3 

Page three calculates the cash required to close the escrow and shows the summaries of the transactions.

Page 4

Page four contains further information about the loan. 

Page 5

Finally, page five explains more details about the terms of the loan, the long-term payments and more.  

The Closing Disclosure – Step by Step

Now that we have basic familiarity with The Closing Disclosure, let’s go back through in much more detail.  What you are seeing is page one of a closing disclosure for a purchase transaction.

One thing you will see will be both the buyer (borrowers), and the seller’s figures.  This area is the closing disclosure.  The whole document is the statement of the final loan terms and the closing cost Here at the top of the form we the closing with the anticipating closing date here on the left, a disbursement date, which again is the day of closing.  Note that the property address and then the sale price here is $180,000.  Noted are the borrower, the seller, and the lender.  

Then we come to the loan information. This loan is for 30 years. It’s for a purchase. It is a fixed rate mortgage, as opposed to an adjustable.  This also indicates a conventional loan.  If a loan was and HFA or a VA loan, they would have that box checked. Now there is a question here that says, “can this amount increase after closing? And the answer to the loan amount of 162,000 is that no, it cannot increase after closing. 

The interest rate is 3.875 and again it cannot change. Also, the monthly principal and interest payment is $761.78 and that will not change. So, as you can see on this document, the lender is promising the borrower that the loan amount, interest rate, and monthly principal and interest payment will never increase after closing.  

Also, just below that you can see that this area discloses that there is a prepayment penalty. In this case, there is a prepayment penalty, and it does say that if this loan is paid off during the first two years of the loan, they could pay a prepayment penalty as high as $3,240.00.

Below this, you can see balloon payment. There is no balloon payment indicated.  This says that the principal and interest will remain the same during the life of the loan.  Also, after seven years the mortgage insurance will be removed. The escrow will remain the same unless the taxes or insurance increase, so here we have your payment calculation.

 For the first year to seven years the principal and interest payment will be $761.78, the mortgage insurance premium will be $82.35, and the estimate the escrow, which is the money held to pay taxes and insurance will be $206.13. On the right side, here it says years 8 to 30.  That indicating that after 7 years and between 8 and 30 years, which is the end of the loan, principal and interest will remain the same—$761.78. The mortgage insurance will be dropped after the seven years so that will no longer be part of that payment. 

The escrow if you look here is set at $206.13, but right down below that they have a figure of $356.13 so there is a discrepancy there. However, when you look at that you can see that the property taxes are being paid through the escrow. Therefore, with the principal and interest payment each month, the homeowner is going to be including money for the property taxes (a percentage of it) and for the homeowner insurance. Yet, on the homeowner association dues it says this money is not being collected monthly. So therefore, when you take this amount $356.13 and you deduct the home owner association dues apparently you do come up with the monthly figure in the escrow of $206.13

Now down at the bottom of this page one is costs and closing. So here you have closing cost total $9,712.10 that includes $4,694.05 in loan cost and $5,180.05 in other cost.  We will discuss this breakdown shortly.  Now we come to cash to close.  In other words, the required money that the borrower will have to bring into escrow in order to close this transaction, and that is $14,147.26

Closing Cost Details

Okay now we will review the section with the closing cost details.  You can see here you have a column with “borrower paid” and what they paid at closing or before closing and the same with the seller, at and before closing. This details the breakdown of all the closing costs, which were totaled on page one. In a signing, you can just show people quickly these quickly.  Borrowers will have had this for three days, and they should have gone through it.  It is up to the loan officer to review these, but sometimes it’s helpful to point these out and they may have questions.  

These are services that borrowers did not shop for, for example they may have a credit report fee.  People won’t ordinarily have to go out and get their own credit report. Here is where you will find the flood determination fee, tax monitoring and so forth. These things are normally chosen by either the lender or the title company. There are fees involved, in this example $236.55. 

In this section, the items that the borrowers did shop for such as, a termite inspection survey fee, title insurance, and so forth will appear here.  During a signing you may want to point to the total.  Once more, lenders are required to provide this document to borrowers at least 72 hours before consummation of the transaction, so the borrower is supposed to have sufficient time to examine these figures and to talk to their loan officer about any questions that they might have.  Unfortunately, many borrowers either do not take the time to review these, or they do not understand them, and this can be a trouble spot when borrowers find things that surprise them.  

In our sample document, you can see the total loan costs being paid by the borrower are the same as stated on page one, $4,694.05. Now the document indicates the other costs and the total of those are $5,018.05.  Once more the total cost for the borrower for loan and closing costs are $9,712.10.  

One additional item to note here, the seller’s figures are on the right side.  In this case the seller is being charged.  This is called “transfer tax” and every state has a requirement to pay transfer tax sometimes it’s county based sometime its city based, but it’s based on the percentage of the sell price, and it is charged to the seller at the close of escrow.

With regard to property taxes, in this case the property tax when they purchased this property were not yet due and payable.  They may just be coming payable, but the seller did not pay them. Therefore, the borrowers will have to pay these taxes for six months. 

Proration is going to be credited from the seller to the borrower (to the buyer) for the portion of time that the borrower did not live in the property.  We will come back to proration later but note here we have the breakdown of the initial escrow payment.  

An escrow account is the amount, of extra payment made by the borrower to the loan servicing company to cover things that are paid by the loan or mortgage servicer.  These usually include insurance and tax.  The first payment that they’re going to be putting into the escrow account is listed.  Note also the other cost involved are the homeowner association, a processing fee, the dues, and then we see the home inspection fee of $750.00, title insurance for $1,000.00 dollars.  

On the right side you can see these are seller charges and the breakdown. Down at the bottom here we have a total of all the other cost, which when added to this comes up to the $9,712.10 in this example. 

Now we come to page three of the Closing Disclosure, and here we find the  loan estimate previously presented to the borrower’s and the final costs. This allows the borrower to see what the changes are, if any.  Here we see what was provided before and the final figures.  In this example, there is a difference between the two and it is extremely beneficial to the borrower.  Originally, borrowers were expecting that they would need $16,000.54 cash at the close of escrow. However, the revised numbers show that the buyers only need $14, 147.26.  Thus they are going to have to bring in less than the original amount to escrow to close this transaction. 

Now we see a summary of the entire transaction. As noted, this shows what is due from the borrower at closing.  In his case the sales price was $180,000 and the closing costs 9600 plus $80 dollars to the home association dues.  This led to the figure that they need to come up with for closing.  

Here we see the funds paid on the behalf of the borrower. One of those is a deposit of 10,000.00 dollars that they have already put into escrow. The other figure is the loan amount for 162,000 that goes to their credit. In this example, there is a credit from the seller of 2,500.00 dollars and then there’s a rebate from the title company. 

Adding all of this, it comes to $175,615.04.  We then take the amount due from the borrower and you reduce it by what’s already paid on their behalf you wind up with the final amount that they need to come in to close this escrow, which as you can see here is $14,147.26, in either a cashier’s check or a wired transfer to the settlement agent, which in this case is the title company. We also see the total amount due from them, this is the money that has been credited to them, this is the difference, and it does show (just like on the HUD-1) it shows cash to close from borrower. 

On the other side of this document again are the sellers’ numbers. They are showing that the sell price of this property was $180,000.  The sellers have to pay $80.00 dollars for the home association dues, and they are getting a credit for that.  We see here that there were taxes due on this property and the seller did not make them for one reason or another. They may not have been due until the end of April, but the borrowers are requiring that the taxes are up to date, therefore, the seller is having to pay the full amount for six months of $365.04.

Next, what is due to the seller is $166,504 which factors in closing cost and the payoff of their existing mortgage n the property. In addition, the sellers are giving a credit to the borrower.  Therefore, the final figure going back to them is $64,414.96. 

Now we come to page four.  This explains the terms of the loan. We see here there is no assumption of this loan. In other words, the people who are taking out the loan cannot sell their home and have someone else assume this loan. The buyers will have to get a new loan. This loan does have a demand feature, so if anything should happen where they defaulted or if they’ve done something to the property, they do have the right to demand payment in full. Here we see the payment.  We recommend explaining the grace period for payments for up to 15 days. We suggest reminding borrowers that if a payment is not made within the grace period, then the lender will charge a late fee and that late fee is equal up to five percent of the monthly principle and interest payment. 

Negative amortization means that if the borrower is not paying enough each month to pay the full principal and interest due on the loan, then there will be more interest accruing on the loan then then there would be if you were paying full principle and interest payment each month. In summary, borrowers can find themselves owing more on their home after paying years of a mortgage than when they started.  In this loan there is no negative amortization. 

A partial payment allows the buyer (the borrower) to make additional payment from time-to-time that are less than the full amount and they will be applied toward the loan.  

Here we come to the final page of this disclosure.  We can see that this reviews all of the total calculations of cost over the term of the loan. Notary2Pro has long held that it is a best practice to go over the terms of the Note with the borrower, so that the borrower can see that on the Note itself there’s a complete breakdown of the monthly payment, interest rate, and the grace period even though they will be repeating some of the information that is on this disclosure. One final note, that the funds are due from borrower at the close of escrow.  They must have their check payable to the settlement agent. They (the borrowers) just sign it, date it, and there just confirming that they have received this document. 

And with this we come to the conclusion of The Closing Disclosure. 

there are often times a few more pages, but they are pretty easy to figure out—signatures and so forth. 

The Note 

Okay here is another important critical document and that is the Note. This particular Note has a fixed interest rate on it and you can tell that by a couple of things. First of all, if it just says Note at the top it means it’s a fixed rate. It doesn’t say anything. It doesn’t say adjustable, it doesn’t say there’s a balloon payment–anything. In addition, and I’ll show you in a few minutes, but the words fixed rate can be found at the bottom of the note in very small letters and if it was another type of loan. For instance, if it is an adjustable rate it would state that in writing at both the top and the bottom of the note. Now there is some crucial things that you need to go through on a note—this is very important. 

The first thing that you’re going to go through is the amount of the principle of this loan and the principle balance of this loan is $250,000.00 dollars. Keep in mind that is the principle amount of the loan that does not include the finance charges that have been rolled into that amount.

 The interest rate is something they definitely want to know. The reason why we have these critical documents and started doing this years ago is because we found that when we started (as signing agents) going through documents, often times these documents are sometimes in the middle or even at the end of the package.

 When we would start, and people will say, “Well how much is my interest rate?” So, we thumb through them to find the note and “Oh your interest rate is four percent.” Okay, now we get back to where we were. “Well do you know when my first payment is due? “Thumb through—thumb through, so this is to save you from all of that when you put these critical documents on top of the stack. Moreover, your signings are going to go so much better because all of the questions that the borrower has, and they are entitled to the answers to all in these critical documents. 

So back to the Note. This will tell them when there first monthly payment is, which is August 1, 2011, it’s kind of an old Note. It will show them the last payment due, which is July 1, 2026. Simple form of math you can see this is a 15 year loan.  You’re also going to be able to tell them what their monthly payment is, which in this case is $1849.22, but keep in mind and you must tell them: this is your principle and interest only. Because if they do have impounds you don’t want to tell them that their payments are this amount and then in a couple of pages they find out its over $2000.00 dollars or something then they’ll go,” How did it go up just in the last couple of minutes?” So just remember this is the principle and interest only. 

Another thing that is very important to point out is that although very few loans nowadays, have the prepayment penalty, so you need to just read it and here it says they have the right to make the payments on the principle. 

Short Story: 

A few years ago, we had a lot of people who had loans and this was prior to 2007, they had loans that had a lot of prepayment penalties and so, we be going through the documents the HUD especially and it would show that someone was having to come up with, say $8,000.00 dollars for a prepayment penalty and they’ll go, “What! What is that?” We’ll explain that it is for paying it off early. 

They were refinancing and getting a better rate and we would say, “You didn’t know that?” and they would say, “No, nobody ever told me that we had a prepayment penalty on our loan. And I would say, “No your loan officer didn’t—\”no nobody told us”. Then I would ask, “How about the notary when they were going through the Note with you?” And what we would here all the time is, “The notary? They just came in and through the paperwork at us and said, “Sign here—sign here” and left and that was it.” 

Because this happened so often is the reason why we go through these documents with them. We’re not giving them any kind of advice. People say, “oh you shouldn’t do that because then you’re giving them—it’s the unlawful practice of law, which is UPO. No! You’re only showing them what was written on the paper in front of them and people sometimes have a very difficult time absorbing that information. So even if they get their documents ahead of time unless they really understand what they’re seeing they don’t really understand it at all. 

The only other thing that I usually go through with the borrower’s is the late charge. The way I like to say it because it sounds a little better is, “that you have a grace period of 15 calendar days and if your payment comes after that grace period you will be charge—whatever percentage,” on this one it’s five percent and that is of the principle and interest payment. If you’re ever wondering that penalty is the percentage of the principle and interest payment. 

Now one other thing, on this particular note every page includes a place for initials. You can have—if you got more than one borrower, they can fit those initials in there somehow even to the left of the initials. Also just remember, that when people initial they must include all of the initials that are contain within their written name. So, if they are signing their name as George W. Carter (or Clauter). He has to have GWC on the initial line. 

Last Page of The Note   

And of course, last but not least, this is the last page of the Note. A Note, I can’t say never anymore because there’s a company in Virginia that requires people to notarize their Note, but 99 percent of the time there is no notarization on a note. There is no verbiage for the notary to read sign, fill-in, or complete, so just remember don’t be looking for a place to notarize the Note. Also, you want to make sure they sign exactly as their name appear on the document, but the identification has to support that name. 

Notice of Right to Cancel

Okay, the next critical document is the Notice of Right to Cancel. Every loan that covers primary residence is allowed to have the right to rescind that loan and the document used for that is the Notice Right to Cancel.  Now keep in mind that this is not available to people who are borrowing on investment properties, second homes, and commercial properties. This is strictly for primary residence. 

Now when you’re going through the Notice of Right to Cancel, you might say to the borrower’s, “I know you don’t want to cancel this loan, but just in the event that something should happen, and you should choose to cancel I want to show you how to do that.” You can then go to this document and instruct them on where to sign. You might want to put a sticky note on this place where it says, “I wish to cancel.” I don’t know why, but a lot of people want to sign there accidentally. 

Okay, so the first thing that’s going to be there and it should already be pre-printed but often times it is not. You can always put the date of the signing for the transaction date. If this date is incorrect, let’s say it’s June 20, 2011 but you’re signing the documents on June 22^ND , you want to put a line through that and afterward or on that line you want to put June 20, 2011. I do suggest that if there is corrections to be made to any of these documents that you try to call people that hired you to see how they will allow you to do that. Some companies do not allow cross outs at all even if it is their own mistake. 

Also, you can show them here this is how you do cancel. If you decide to cancel you can send a copy of this document to this company. This is where you do it. Usually, it would be of course by email or fax. In addition, one of the things you want to watch out for is if they should decide to cancel, please call their loan officer as soon as they make that decision. Short story: We had a woman a few years ago who waited till the last moment to cancel, she put her cancellation notice—the notice of right to cancel in the mail and it was postmarked okay—it was post marked in time. 

However, it was nine o’clock at night on the night of cancellation and what happened is the day after the rescission was over, which was the following day, they funded the loan and recorded all of the documents and then a couple of days later they got this notice of Right to Cancel completed in the mail.  Hence, they had the legal obligation to cancel it because she got it in the post office in time, but what a nightmare it was trying to back out everything. All of the documents that they had recorded, all of the funds had been disbursed and it was a mess. 

So, as you can see here they give you the rescission—the end of the rescission date and will go more into that at the end of the document section. I do have a something on rescission that’s pretty detailed. Also don’t let the borrower sign where it says: I wish to cancel. That wasn’t what I was saying before that what you can do is to put one of those little sticky notes over that area, so they don’t accidently sign there. 

What they are doing is signing right here at the very bottom as you can see here. (A bit of a stumble here) Putting their signature and the date and it has to be that date that you’re acknowledging their signatures, and this is very important: **for every borrower, they need to have two copies executed.

In this particular case you have Mr. Greg Amayatest 41, he has to execute three copies of the Notice of Right to Cancel. One of those copies go back to the lender with the loan package. He is entitled to keep two executed copies. Do not leave any blank copies with the borrower you must execute their copies while you’re sitting there with them.  The reason for that is, if they decide if they want to cancel for some reason and they have a blank copy, that can be manipulated to appear legal. So, what you do is leave two executed copy for each borrower even if they sign the same document they each have to execute two of those copies. 

Itemization of Amount Finance 

This is the Itemization of the Amount Finance. Basically, this is just a complete breakdown of all of the fees that are being paid on this loan. 

As you can see it includes payoff, title insurance—any kind of fees. The appraisal fee all that kind of thing and it shows that the amount totals to a certain amount here and then the amount of the loan, which is $245,000.00 dollars. This also is not notarize, at least I haven’t seen any yet. 

Deed of Trust

Okay now this is a Deed of Trust and most refinances are going to contain one of two security instruments, either a Deed of Trust or a Mortgage. Now what makes them different is the fact that on this security interest the security instrument has a trustee involved. The trustee handles foreclosures in the event that there is a foreclosure. In addition, there is a difference between a mortgage and a deed of trust. With the Mortgage, the lender is responsible for taking care of a foreclosure. The lender has to go through the court system and the sheriff’s department in order to get that done. 

On a Deed of Trust, it’s usually a trustee that is appointed to take care of that situation. So just remember that’s the big difference between a mortgage and a deed of trust. So, on the Deed of Trust you’ll see here we have the name and the vesting, which the vesting is how they are taking title.  This man is taking title as a single man. You want to check the name on this and make sure all the documents match the name on the Deed of Trust because this is the way they are on Title. On this particular page there is going to be initialing.

And as you can see here at the top this is the trustee: D is First American Title. So again, they will be handling any foreclosure proceedings. They’ll also be issuing a reconveyance when this loan has been paid off to take that cloud off of the title. 

Okay you’ll also see regarding the Note itself, they don’t put the interest or anything like that on it—strictly the date of the Note and how much that Note is for and when the last payment is due. Now this is important these boxes here—these boxes that may or may not be check. For instance, here we have a condominium that these people have and that if there is an X here. If in fact attached to this deed of trust you do not have a writer (a condominium writer) to be recorded with the document, you have a problem. So what you need to do is to call the vendor that hired you or the lender, title company whoever it is and tell them, “You know what I have my Deed of Trust, but I did not get the condominium writer and it is indicated in these documents that this is a condominium. 

DOT

Okay as you can see from my little sticky note, you’re going to be asked sometimes if anyone actually has ever read the entire Deed of Trust—not on my watch. The answer to that is in phase one of the course, but for right now let’s just skip to page 24. The only thing that appear here on this page is just the address of the property. 

Okay this is basically the last page of the Deed of Trust. There’s a lot in between you do not need to go through the Deed of Trust with the borrower because they will have copies. If they have that three day right of rescission there’s really nothing in there that they’re going to be able to change anyway. So, this document needs to be signed and then of course this is the acknowledgement that appears on that document, which is part of that document. 

So, as you can see here you’ll put the venue is your state and where your feet are planted is the county it goes in there and just remember if you’re commissioned in Brown County, but your signing is taking place in Orange County—Orange County is what is going to go in that area. Furthermore, you’re going to be doing the date of the signing and your name—sign it here and underneath the signature line put your name (print your name and the fact that you are a notary public). So, it will be your name, notary public, you can sign it your name comma notary public. Also, you want to make sure you put your stamp in this area and make sure it has no smudges—it is perfectly clean so that it can be recorded. 

Security Instrument   

Instruction To Escrow/Title/Closing Agent

From this point forward will be going through things pretty closely.  You can—when you print these out you’ll see all these instructions and things highlighted. Also, when you do print this out and this is really important: in order to get these markings on there, when you go to print you need to say, what you’re printing it’ll say documents. Open that up because it should say documents with markings and that’s how you want to print that out. Make sure that’s marked it depends on your printer some will do that automatically –some will not. So basically, this is just instructions primarily about the loan and the instructions are basically for the title company (escrow company).

To reiterate, these instructions are primarily for escrow or title company and they just tell what the requirements are, how much the title policy has to be, what’s required on the title policy, and how much hazard insurance. By the way, hazard insurance is home owner’s insurance that they always called hazard insurance. 

The third page of that document we were just looking has a signature. I want you to pay attention to it—it says “settlement officer”. You are not the settlement agent—you are not the settlement officer. You are not the closer, you are the notary public. 

Okay, last but not least. It’s just a breakdown of the cost. This is basically the same thing that was on the itemization of the amounts financed. 

Escrow Waiver Letter

This document is an escrow wavier letter, and this is in the event if the borrower is going to be paying their own taxes and insurance as oppose to setting up an escrow account. this is a lender requirement that they state, “yes” they’re going to be paying their taxes and insurance and they are going to be doing it before any penalties or laps? (not sure what you said here) or anything like that. If they fail to make those payments, let’s say if they failed to pay their taxes then this gives the lender the right to take some action to make sure those taxes are taken care of. 

Letter of Loan Transfer Document

This document basically is just a warning to the borrower that this loan has been sold and it will be handled by J P Morgan Chase. It shows what their principle and interest payment is, if it was in pans for taxes and insurance it will also be included there. 

Hazard Insurance Authorization, Requirements and Disclosure Document   

This is basically just showing the borrower what type of homeowner insurance that this lender requires. As you can see here there is a couple of requirements on here including –the company must have an A reading.

And here is the second page of that document. 

And since this is a three-page document, this is the third page. They’re just going to sign and be sure that they date the actual day that you’re actually witnessing the signatures. 

Notice of Right to Copy Appraisal

This is pretty much self-explanatory. This just states that the borrower is entitled to receive a copy of their appraisal. If they have not already done so. For instance, you’re signing them and they say, “Oh know I haven’t gotten a copy yet.” You know you don’t really want to hold up the entire loan. You can’t give them advice you have to leave it up to them. Most of the time they will say, “No, it’s okay I’m just going to call Joe the loan officer or whatever and get a copy.”

Compliance Agreement

This a compliance agreement. This is basically signed by the borrower stating that they agree that if any documents have been left off or if there is any clerical errors on the documents they agree that the lender can take care of it without bothering them. They can’t change the amount on the loan like or the interest rate—nothing like that. It’s mostly just something to do with information. 

Acknowledgement

And again, here’s another acknowledgement. We’ll skip this one. (Abruptly stops and heads into something else. Not sure if this is a new slide or not).

Flood Hazard Determination   

Now this one is kind of an important one you want to know about. When people are reading this they’re going to misconstrue this and think that they have to have flood insurance on their property. And most of the time what this basically say that there is no flood hazard determine and they do not have to have flood insurance. But if it ever becomes designated as a flood hazard area there will be government assistance to obtain flood insurance. 

Tax Record Information Sheet   

This tax information sheet, you just need to turn that over. Don’t even go through it with the borrower. They don’t have anything to do with it—this is strictly for the lender. 

Servicing Disclosure Statement

This servicing disclosure statement basically says that they may assign seller transfer to servicing their loan and on this one they are—they have sold the loan.  Each box is able to have an x, you’ll see when you show it to them what the determination is. 

Notice of Assignment, Sale, or Transfer of Servicing Rights

Again, here is a notice of seller’s assignment and it does show that they have sold this loan to JP Morgan Chase. 

Hazard Insurance Endorsement Letter

This is just a directed to the lender and the insurance company as to how the mortgage clause is going to read. 

The Housing Financial Discrimination Act

This is just a sheet that shows what kind of disclosures are being sent to and are showed to the borrower.

Borrower’s Certification & Authorization

Okay this borrower certification. The certification part of it says, that they have been truthful in completing their loan application. The authorization is to give the lender authorization to release certain personal information about the borrower so that the loan can continue and be made. 

Request for Transcript of Tax Return

This 4506-T is an important document. It actually is given the lender the ability to give permission to get your tax transcript from the IRS. It is usually designated to the year it might be. Also, you can see that only one person’s name is on this document. If they do have a spouse and it is a joint return than the spouses name and social security number would be on this document and what you need to do is also verify the social security numbers. Just have them look and make sure this is correct. Therefore, if there is a spouse they name will be in there and they will also have to sign this document.

 So, as you can see here these are the years they are asking for and then you’re going to have the person sign, the date that they signed and then the signature of the spouse if there is one. 

Request for Taxpayer Identification

This is just a typical W-9, which is something that you’re going to have to complete and have ready to send it out to the company that hire you. This is for the purpose of reporting to the IRS any funds that have been paid to you. 

    Now for those of you who do not know what a TIN is—it is a tax payer’s identification number. There are people that use these identification numbers. My husband and I actually use them as opposed to our social security number. I don’t like our social security number to be on anything especially when we’re sending it out to people we don’t really know. 

By signing this document, the taxpayer is saying that this is either their correct social security number or tax payer identification number and they can be held liable if they are lying about it. They can be prosecuted. 

Signature/Name Affidavit

Okay this is an important document. They come in different forms. The first thing I want to point out to you is the word affidavit it says, signature name affidavit. What that means is that this is one of those documents that you’re going to have to administer an oath. Now here is what I suggest, (you can do it anyway you want—everyone has a different way of doing it) an oath is absolutely mandatory. I have met and talked with a lot of notaries who says, “Oh I don’t do that.” Well let me tell you what the consequences can be if you don’t.

     First of all, when you administer an oath the best thing to do is to administer it before you get the signing started. What you’ll have the people do is to raise their right hand. You don’t have to but I think it’s a good idea. You’re going to read the oath to them and make sure they say, “I do” or whatever words you determine and then you are going to tell them that this oath is going to be in effect throughout the entire signing of the documents. 

So anytime you come to something such as the affidavit the oath is still in effect and they are still promising that they are telling the truth.  Then when you come to these affidavit anything that has to be sworn to you can just remind them again: I just want to remind you that you’re still under oath. It saves a lot of time. You don’t need to stop every time and read them the oath. Now on a signature affidavit this is something that’s very valuable form for you.

 For instance, let’s say that you have a person—a women who has gotten married and on the documents, there is nothing but her maiden name. Her driver license now or whatever identification she presents to you shows her married name but on these documents it’s her maiden name. She doesn’t have any other documentation to prove she is that same person. So often times the lender would take care of this. If they don’t you need to talk to the lender or to the vendor and let them know about the discrepancies and what they can do here is they say that this person in this particular instance they are also known with their initial but everything shows just the name but without the initial. Then you can put in that name, like for that woman you can put in that maiden name, I am also known as this person. You administer the oath and they’ve sworn to the truth—your fine. Now you can identify them without a problem. 

So, this is a signature affidavit. They come in different forms, they are very important documents and they do require the oath. 

Affidavit of Occupancy

This is an affidavit of occupancy. Basically, it says if there is a second home, an investment property, and the primary residence. And again, it’s an affidavit so there swearing under oath that this is true. They could get into a lot of trouble. It’s called fraud if they were to say that it is there primary residence and it’s found out to be a rental property or something. 

USA Patriot Act Information Form

With the onset of the Patriot Act Laws, we, the notaries are instructed to complete certain documents, including almost all Identification Verification forms ourselves.  We are attesting to the fact that we physically observed the signers valid identification, and are making note of all of the information contained on that identification.  Some of these forms require the signature or initials of the signer, some do not. 

If the borrower is not required to sign the identification form you will sign it but your title on that form will not be as a notary since you are not notarizing any signatures so you will use the title Notary Signing Agent instead.

Okay, this is a document that is important to you as a notary signing agent. This information contains the name and address of the property. It also have the social security number and tax ID of the borrower. And on this particular one they want to have one form of identification some of them requires two forms of identification.  

So, what you’re going to be doing you’re actually going to be taking—let’s say in this case it’s a driver license, military ID or a passport any one of these items that are listed here on the first documents list they will present to you.  You need to very carefully examine it the drivers license or whatever they give to you and you’re going to be completing the information here: The country or state of identification origin, the ID number, the date of birth that shows on that identification, and the expiration date fill that in. If there is a second form of ID then there is a list here of things that can be used. If is a social security card you have to actually look at the social security card. Any one of those things you actually have to observe for yourself. 

The reason for that, is because you are going to signing. You are the only one that is going to be signing this. It says that you certify that you have personally viewed and accurately recorded the information from those documents identified them above. In addition, that you have reasonably confirmed the identity of the borrower. 

When you sign this, you’re going to be singing your name here and then over here you’re going to printing your name with a comma either: signing agent or notary signing agent along with today’s date. So, this is one form that you do not sign as a notary public. You are not acknowledging or witnessing the signature. This is not to be notarize and this is not to be stamped. So just remember that this is an important form. 

Equal Credit Opportunity Act Notice

This is just an equal opportunity act notice. It’s just a disclosure. One of many that the borrower will be provided. 

Notice of Furnishing Negative Information

This is a funny one. This says basically, if you don’t make your payments they are going to report you to the credit agencies…Duh. 

Amortization Schedule

Now this document is called an amortization schedule. If you are not familiar with this it’s very simple, but it is something that the borrower is usually pretty interested in. Basically what this does is that it shows that the number of the payments as they are made uh and have chosen the payment date that its due it shows the payment amount as it is to be made and this is the principle and interest payment of the fact that it is the same payment every time. Now if they pay more then what is due then there amortization schedule is going to be thrown off.  But it shows how much of that particular payment goes towards the principle, interest, and how much of the balance is on the loan. 

Slide: (Cont.)

So, let’s take payment number 48 which after four years of owning this property and making payments shows that the payment that’s due at the time is July 1, 2015. The payment amount is 1849.22. You have 1187.88 going to the principle, 661.34 going to the interest and it shows the balance and where it is at that particular time. So, as you can see here on the next page on the very bottom after the 180 payments have been made, which is for the full term of the loan the last payment due is 7/1/26 the payment amount has been adjusted to 1849.15 and then the amount that goes toward the principle, which is 1843.01 and the last bit of interest 6.14 and then their house is paid off. 

And this again is called the amortization schedule. 

Uniform Residential Loan Application

This is the uniform residential form application. Also known as the 1003 and it’s kind of important that you remember that because often times somebody is talking about it and they won’t call it the uniform residential form application. They’ll say, “Oh on the 1003.” However, we have on the additional resources page a complete breakdown of the terms used in this industry in the glossary. So look for the glossary. You can actually print those out if you want to. All of those documents, just to be sure you download them to your computer and then print them out.  Okay so on the 1003 (ten-0-three) a couple of things you need to know: At the top of the 1003 the only people that will be signing it are the actual borrowers. Those are the people who are listed on the applications. Now if you have a non- borrowing spouse that person is not going to be on the application. They are not on the loan, they are not responsible for paying back the loan. And they will not be signing at the top. Only the borrowers will be signing at the top. Here’s one problem. On some of these 1003’ s they actually say that this is supposed to be completed or signed by more than one person if this is a joint application. 

So, in other words, if more than one person is borrowing money on the property and they are both on the loan or application then they will both sign. But often times you only have one borrower so in this case you’re still going to have them sign and I will tell you why. Even though it says that it is an application for joint credit because so many times these processors/lenders they don’t know what it says—they don’t understand it and they’ll call you up every time and say “Oh! you didn’t get the borrowers signatures on there” and you are trying to tell them well it wasn’t’ a joint credit and that it was just a single borrower. They don’t care they want it there. So, I never had one turned down, but have the signature on there so on the side of safety go ahead and have them fill it in and sign it. 

So, as you can see here there is no co-borrower name it is just a single borrower.

You can see here that there is a breakdown on this particular one, which is about their employment concerning how much they earned. There is a lot of personal information in here and, so you never, ever want to talk about it. We have handled some loans where the income was staggering and it’s not something that you can talk about because perhaps for the person that is a celebrity or well-known you must keep this information private and this is why you should set up your office in an area where there is no traffic even if it has to be a closet in your bedroom. 

This is just another page in the 1003. A lot of information is there. This should be completely filled out by the time they get their loan documents. All of that information has been prepared and put in there. One of the things that I want to mention right now is that you should never notarize any documents that have not been filled in completely. You cannot notarize blank documents and really on something like this the borrowers should not be singing anything like this 1003 unless it has been completely filled in. But just remember that’s one of those things that you are not able to do—is to notarize a document that is not completed. 

Credit Score Disclosure

This is exactly what It says this is a credit score disclosure. This one happens to be for the state of California. This could be anywhere in the United States. Basically, it is telling the borrowers what their credit scores are from the different reporting agencies. 

Allonge   

Oh, this is a biggie. I want you to pay attention to this one. This is called an allonge. An Allonge is basically a document that transfers the interest of the note from the one lender to another. So in this case, Americash is the one making the loan to these people but they have as we previously seen sold this loan to JP Morgan Chase. Well in order to complete the sell there are two documents involved. 

One of them is this document which is called the Allonge. You don’t need to show it to the borrowers and you don’t need to have it signed you just turn it over. However, I am talking about it because a lot of notaries when they come to this document they do not know what it is and not know what to do with it. And so, it takes a few minutes out of your signing time to figure it out. So there it is turn it over. 

Subordination Agreement

Okay here is another document that I want to show you because this will come up for you. A subordination Agreement is an agreement executed by a lender who lets say who have a loan on the property and they are in second place. There is a first place lender and they are being paid off and are being replaced by another first place lender. The subordination agreement basically says it’s okay you guys you new lenders you can be in first place I’m still fine with my second-place position. If this were to ever be a huge mistake where the lender did not get a subordination agreement and they file their paperwork and are on title as a lender they would drop down into second place. So, you’ll have someone who has a huge loan on the property who is supposed to be in first place now in second place behind maybe a 10,000-dollar loan for a second. So, this subordination is not something that you do it’s not something that you take care of. 

Every once and a while you will get one in the package that needs to be signed by the borrower but it’s very rare. But I will tell you occasionally that your escrow will be held up by the lack of a subordination agreement. For some reason the people who are in second, third, fourth, place usually are not in a big hurry often times to create and execute an subordination agreement. 

Warranty Deed

This is a warranty deed. Deed’s comes in all different forms. There’s the quick claim deeds, warranty deed. In addition, there are interspousal deeds, claimers deeds, basically a deed is from one person or person who are called grantors are transferring the title to the property to other people or another person called grantees. This is the documents that transfer the interest in the property from one person to another. 

So, try to remember this when you see those words grantors and grantees it’s important for you to know. Sometimes you will get a deed quick claim deed that lets say  is from a husband and wife to the husband and wife but there changing the name. Maybe they went on title without their initials and now they want to put their middle initials on there. Or perhaps you have a wife who is coming off of the property maybe there is a divorce in the works or they already divorce so you might have a deed from Bill Smith and Mary Smith to Bill Smith as his sole and separate property. 

Affidavit- Death of Joint Tenant   

This is a document you will not see that often but if you do basically this means that the people that were on title to the property were probably married. They held their property as joint tenants and now one of them has passed away and now they need to come off the property so that it belongs to the surviving spouse. This would be accompanying by a certified death certificate and often times they will ask you to collect that copy of the certified death certificate and send it back with the loan documents. 

Grant Deed   

So here is another type of deed it is a grant deed but there may be some legal differences between deeds but that is not your concern. You are not there to advise people merely to execute the documents and have them signed and notarized. 

Interspousal Deed   

This is another one that I mentioned the inner spouse grant deed, and this is strictly used between husband and wife.

Disclaimer Deed   

I mentioned this one its basically a disclaimer deed and this is often used in community property states where its automatic that the husband and wife share interest in property but let’s say for instance the husband purchased this property prior to the marriage and the wife has nothing to do with it and the wife don’t care she don’t want any part of it and she knows it’s his property maybe he uses it for his business or whatever. This is just saying that I don’t have any interest in this property I don’t have any idea past or present to take claim or title to this property and then they sign off on it. So there is never any worry for if the two are on title on not. It’s very clear who is on title. 

Certification of Trust   

This is a certification of a trust your going to see that whenever there is a trust involved in the property and basically what this document is it has to be filled in by the borrowers and basically says the trust has not been changed that everything is the same as it was when it was fist drawn and there has been no amendments. 

Recission

RESCISSION RULES  

According to Federal law which is part of the Real Estate Settlement Procedures Act (RESPA),  a borrower refinancing a property which is their primary residence has the right to change their mind and cancel the loan within 3 business days from the date of signing the loan documents. Since this is a federal law, every state should be adhering to that law.

When determining the rescission date you begin counting BUSINESS days after the date of the signing. You never include the date the signing takes place in the rescission period.  So, if a signing takes place on Monday the 5th of the month you do not count Monday the 5th. You do count Tuesday the 6th, Wednesday the 7th and Thursday the 8th. The rescission date is therefore Midnight of Thursday the 8th. If the signing takes place on Friday the 5th of the month, you do not count Friday the 5th. Saturday is considered a business day so you do count Saturday the 6th. Sunday is never a business day so Sunday the 7th does not count. Monday the 8th counts and Tuesday the 9^th counts. So therefore the rescission date is Midnight Tuesday the 9th of the month.

HOLIDAYS:

Remember only business days count. If you have a signing on Friday December 23^rd, the 23^rd does  not count. You do count Saturday December 24th. Sunday is not a business day so it is not counted, but because Christmas falls on Sunday the holiday will most likely be Monday the 26^th.  You will then count Tuesday the 27th and Wednesday the 28^th as rescission days so your rescission date should be Midnight Wednesday December 28th.

This scenario happened in 2010 on the July 4th holiday which fell on a Sunday.  A lot of notaries got the rescission date wrong, and even some rescission calendars which were wrong.  

If you have any doubts as to the days to count as business days during a holiday, ALWAYS call and ask what day the lender wants you to use as the holiday. I believe that just like a second grader who cannot add 2 + 3 without using a calculator, there are notaries who are incapable of being able to figure out rescission dates. This is not a good thing. You need to be able to rely on your own abilities.

Rescission 

And as we discussed before federal law does allow for borrowers to have three days in which to cancel that loan should they change their minds. Again, this is only on primary residences. This information will tell you how to calculate it. I know that there are calendars out there that do have rescission dates, but those calendars have been known to have incorrect information at times, so just like a you know a first grader learning how to add two and two, I would not want to see them using a calculator to do that you need to know how to determine your rescission dates on your own without the use of a calendar. 

CROSS OUTS:

If you have a Notice of Right to Cancel with incorrect dates, these are the steps you must take to correct:

First, Read your instructions! Some lenders do not want cross outs!

Second, call the vendor and get permission and instructions as to how they would like to have this correction made.

Third, if you cannot get in touch with anyone, cross out incorrect dates, write in the correct dates and have all borrowers initial all corrections.

WITHOUT EXCEPTION, YOU MUST ALWAYS LEAVE TWO COMPLETED AND SIGNED COPIES  OF A NOTICE OF RIGHT TO CANCEL WITH THE BORROWER.  MOST LENDERS WANT ONLY ONE EXECUTED COPY SENT BACK TO THEM.  RARELY YOU WILL HAVE A LENDER THAT WANTS MORE THAN ONE COPY BUT MOST DO NOT WANT YOU TO SEND THEM BACK MORE THAN ONE EXECUTED COPY. Do not leave any blank unsigned copies with the borrower.  If they try to use it after the rescission date you could be held liable in a court of law.

READ YOUR INSTRUCTIONS BECAUSE OCCASIONALLY A LENDER MAY ASK FOR MORE THAN ONE.

Confidential Information

Truth in Lending Disclosure – 

APR

ANNUAL PERCENTAGE RATE

The APR or annual percentage rate is disclosed at the top of the Truth in Lending Disclosure Statement.  Federal Regulation Z RESPA law provides that the borrower should receive a Federal Truth in Lending Disclosure Statement before consummating a consumer credit transaction so that it can be studied for the impact the figures will have on the borrower.

One of the most confusing figures to appear on the TIL is the APR, the Annual Percentage Rate.  Explaining this interest figure to a borrower so they have a clear understanding as to what it is can be an overwhelming task.  

In  it’s simplest form you can explain it this way:  

The interest rate on your Note is based on the principal balance of the Note.   The Annual Percentage Rate, or APR, is the actual cost of your credit based on an annual rate. Because you may be paying closing costs, also known as Prepaid Finance Charges (origination fee, discount points, mortgage insurance, interest), the APR on the disclosure is often higher than the interest rate on your loan.

Introduction

The following are just some documents that you’re not really going to find typically in a loan package except for one, but these are extras that I do want to go over with you and let you know what you have the ability to download and print. 

Confidential Information 

First, this one document is called a statement of information and this is the one that the borrowers will need to complete themselves. The information on this form assist the title officer when there’s liens against someone or a personal name and if their name is common then the lien could belong to someone else that has the same name things such as Brown, and Smith that kind of thing. So, the information on this form will allow the title officer to determine whether or not this is the same person who is responsible for the lean. 

Just a little tip: Save this form for the last thing that you do. Once you have completed the signing and then you can give that to the people to fill out. Additionally, there is a lot of personal information in there and while you’re double checking your documents they can be filling out this form. 

Nonborrowing Spouse Documents

The next thing that I wanted you to have was all about non-borrowing spouse and all the documents that they’re required to sign. There are times when they have a non-borrowing spouse where they’ll put their name on a lot of different documents that they want them to sign and that’s fine because you’re going to have them sign those documents. However, if there is ever a question where they don’t let you know what documents they want the non-borrowing spouse to sign I do have a little list here of the main ones—the name title documents that are required. So be sure to download those documents and print them out. There will be questions on the exam about this. 

Power of Attorney Notary Signings

I also wanted to go through power of attorney notary signings. A lot of information about this—a lot of details about it, again download it, save it, and print it. 

Power of Attorney

This more specifically is about how they will sign a power of attorney. Now I do want you to know that when there is a power of attorney on a signing, you don’t need to worry about if that power of attorney is valid that is the responsibility of the title company. Once they accept the power of attorney—the lender accepts it—it has been validated so that’s not your concern. 

Pages of the New Disclosure

Other types of Signings

Survey of this section

Reverse Mortgage

With a Reverse Mortgage, the money is loaned to the property owner and the Deed of Trust or Mortgage is recorded in the office of the County Recorder and a lien is placed on the property.  The difference here is that the Borrower will never be obligated to make any payments on the principal balance of the loan.

The Borrower must be at least 62 years of age and have sufficient equity in their home to be able to take out a Reverse Mortgage.

Two things will accrue over the life of the loan.  #1 is the interest on the loan and #2 is the appreciated value of the property over the life of the loan.

The loan will be paid off only if:

The borrower (home owner) sells the property.
The borrower dies and the property passes on to the heirs.  The heirs have one year to decide whether or not they are going to refinance the property and payoff the loan, or sell the property and payoff the loan at the close of escrow.

Forward Mortgage

On a normal forward mortgage the principal and interest payments are customarily made on a specific day of each and every month.  The interest rates on these loans are usually quite low. At the beginning of the loan the payment made toward the interest on the loan is much greater than the amount applied to the principal.  As the loan progresses the amount of payment applied to reduce the principal balance of the loan grows and the interest applied to the loan becomes less.  This pattern continues until all of the principal balance of the loan is paid in full and the loan can be removed from the property and the borrower no longer has an obligation to pay. A Deed of Reconveyance is recorded and the lien lifted off of the property. 

Education Process

There is care and dedication on the part of the Loan Officers doing Reverse Mortgages.  Counseling and seminars to educate seniors on Reverse Mortgages are mandatory.
They are given opportunities to make good decisions. 

Benefits to Seniors

The benefits should be obvious.  A senior home owner has a home that has sufficient equity to allow them to have a Reverse Mortgage.  Their incomes may be insufficient to pay their bills, put groceries on the table, and put fuel in their cars and certainly not enough for any hobbies or recreation time.

Most heirs are the children of these seniors are for the most part very happy that their parent(s) are able to take out this kind of loan which will allow them to live a more comfortable life in their Golden Years. 

I signed one very sweet lady whose monthly income was $900.00 and her mortgage payment was $800.00 a month.  The only way she was able to pay her utility bills, insurance and grocery bill was to drive another senior around to all of his appointments and do his shopping.  When we completed the signing and I told her she would no longer have a mortgage payment, she laid her head on the table and sobbed. 

Helpful Hints and more

One of the things that you need to keep in mind is the age of the borrowers.  As stated before the minimum age of the Reverse Mortgage borrower is 62 and the ages can and do go to people in their 70’s, 80’s and even 90’s.

Sometimes elderly people are ill and sign very slowly.  They may not have good hearing which can make things difficult.  Their homes may be very warm both in the summer and the winter.

Many of these seniors are very fearful that they are being scammed.  They are still unsure as to whether or not they have made the right decision to take out this type of loan.  A lot of them remember a time many years ago when these loans were not regulated and overseen by the government.  There were people who called themselves “investment counselors”.  They would talk seniors into taking out Reverse Mortgage on their homes and when the escrows closed would get the homeowners to turn over the equity they took out of the home and give it to these investment counselors to invest for them.  The homeowners did and lost everything.  These so called investment counselors were never seen again.

There are many seniors that are very lonely. They may be far away from family or have lost a spouse. Some have lost a lot of people in their family and have few people to interact with.  So, of course, when you come they want to spend some time just talking with you.

But now that I have painted a not so pretty picture, let me paint you a beautiful picture.

SITUATIONS

If you have patience and understanding you will come to really enjoy doing these Reverse Mortgages.

The first thing is the reward you will get from helping some of these people go from worse than poverty situations to being able to spend the rest of their life more comfortably and without fear of losing their home.

Upon entering their home take a look around.  You may see things that this person has collected or has crafted.  There may be some special photos or paintings on the wall.  Use this information to interact with the borrower.  Spend about 10 minutes just talking and being social.  Show some interest in the things they do.  You cannot imagine how important this time is to the borrower.  It will give them some confidence in you, put them at ease and give them some attention that they desperately crave.  You want to allow the borrowers to be comfortable with you.

Now of course, not all seniors need any of this attention and they just want to get down to business.

I will tell you that if you ask these seniors about their hobbies and about their “former” lives, you will not believe some of the things you will see or hear.  We have had the opportunity to meet some of the most fascinating people in the world.

Among them have been:

The granddaughter of a slave
A man who worked many years as an assistant and driver for a Mafia boss in New York.
The first woman pilot in the military
The creator of Sprint
Small town doctor who used to do house calls in a rural area
A woman who was born in Germany and she talked about her escape during World War II
2 Retired Generals and on and on.

Many of the seniors we have met with have amazing hobbies and skills.

Here are a few of the many:

A man who makes amazing knives, a leather crafter, painters,  a woman who made incredible ceramics, a female knife thrower, a horse whisperer, a horseback rider who performed in rodeos and shows, quilt makers, animal rescuers and people who raised dogs to be trained as service dogs.

The list goes on and on. 

MISCELLANEOUS

One of the things I learned early on is that despite the fact that you spend some time just being social, once you get into the signing process it can go very quickly.

When I first started doing Reverse Mortgages I would go through the documents much the same as on a forward mortgage.  It didn’t take me long to realize that all I was doing was confusing the borrowers.  They have been so well educated about their new loans that I was undermining what they thought they knew.  Now I usually only point out the document that lists the complete breakdown of the loan.  It contains the appraised value of the property, the principal amount of the loan, the charges being deducted from the gross loan amount, and the manner in which the funds are being taken out of the loan by the borrower.  They may have some of the funds being held in a credit line from which money can be drawn on a regular monthly schedule.  They may be taking all of the money left at the close of escrow in one lump sum, or both of these methods.  There is also a good chance that there will be nothing left after the payoffs and costs.

More often than not, the Loan Officer will be there with you at the signing.

There are a couple of things that are really important that you will need to know.  First of all, there is always two copies of the Deed of Trust or Mortgage, and two copies of the Note.  One copy of these documents goes to the lender and the other copy to HUD.  

Also, the lender addresses possibility that the borrower will turn their funds over to an Estate Planner and/or purchase an Annuity.  These issues are addressed in advance of the loan documents and in most cases, the borrower states NO to both issues.

Some Signing Agents are verbal in their distaste for doing Reverse Mortgages and they feel that they must charge more money to do these signings.  These signings do not take much more time to do than any other refinance and the rewards to you can be priceless.

However, that being said, if you are not a person with patience and the kind of compassion it takes to do these loans, then just don’t take them!

Reverse Mortgage Payoff

The loan will be paid off only if:

The borrower (home owner) sells the property.

The borrower dies and the property passes on to the heirs.  

 The heirs have one year to decide whether or not they are going to refinance the property and payoff the loan, or sell the property and payoff the loan at the close of escrow.

Split Signings 

WHAT THEY ARE

A split signing is basically means that the documents are being signed by different people in different locations.  An example might be if you have 2 brothers that own a piece of property together.  They are taking out a loan on the property and will be signing the same set of documents.

One Brother lives in Colorado and the other in Indiana.  The documents will be sent to a notary in Colorado where one of the brothers will execute the documents. Once the documents have been signed the notary will then send the documents to the second notary in Indiana where the second brother will execute the documents.  The loan package will then be returned to the lender.

If you are the first NSA

You will handle the signing just the same as you would any other signing.

You will need to cross out the name of the person who is not appearing before you on the Acknowledgement only.  Do not cross their name off of the documents themselves.

Always verify with the vendor or lender if a cross out on the Acknowledgement is acceptable. If not, a Separate Acknowledgment will need to be attached to every document that requires notarization.  Be sure that you indicate on this acknowledgment what document it belongs to.

As a Note, you must be extremely careful when sending separate acknowledgments with documents or if a lender asks you to send one to them.  If you do not put information on it indicating what document is being notarized, that separate acknowledgment could be used for a document you did not witness.  Some states are making this mandatory but even if it is not, it is good practice to protect yourself and the borrower.

If you are the 2^nd NSA

You will be receiving the loan package from the first Notary and will need to attach a separate Acknowledgment for each document requiring a notarization.

The Acknowledgment will contain only the name of the party who appears before you.

You will most likely be returning the package to the Escrow Officer.

Jail or Prison Signings 

Calling the Facility

We are providing you with general information here just to give you an idea as to what a Jail or Prison signing entails.  All of the facilities you visit will have different rules. You MUST call the facility before you go there to make sure that you understand and adhere to the rules of that particular jail or prison. They will advise you as to the times prisoners are available, their procedures, and will tell you what items you will be allowed to carry into the signing area.  This will save you some time, and let you know what items you should not carry with you.

Inmate Identification

When you get that call asking you to do a jail signing, the first thing you need to ask is who is going to provide the identification you will need.  Most of the time it is the inmate’s family who holds their identification. Sometimes it is the inmate’s attorney. You will need to make arrangements to get that id before you meet with the inmate.

If you are dealing with a person who is illegally in this country, which is often the case, a government agency may be holding the identification which is most likely a passport.

You may have to meet with relatives or an attorney, at the facility to obtain the identification.  If it is relatives and they have to travel a long distance to get there, they may choose to come on a visitation day.  This is not a good time to go for a notarization because it is crowded and time consuming.  It is always best if you plan to go during non-visitation hours.

There are facilities that issue photo identification cards or bracelets to inmates. Those are usually sufficient and acceptable forms of id for you to use.    And, again, you must check your state statutes to determine what types of identification are acceptable.

The next thing to do is to call the jail and ask for Inmate Services.  They should be able to help set up the visitations and answer questions about inmate identification

The Process

The wait time can be difficult.  Sometimes you will be able to go right in to see the prisoner and other times you may have to wait for a very long time.  It seems that sometimes you are at the mercy of the person in charge of pulling the prison out. 

Inmate Services will be able to provide you with a list of the items you will be allowed to bring into the facility with you.  Some facilities will not allow you to bring in a pen because there is a possibility that you may have placed something illegal into the tube of the pen.  They may then ask that the inmate sign with a pencil.  If this happens, you can ask the guard to provide the pen to the inmate.

This is a list of the basics that you will need to bring in with you.  These are items which are usually required by the facility and what you will need to perform your duty.

Copy of your Notary Commission

Your Identification

Your Seal

Notary Journal

A Pen (if allowed) 

Documents to be notarized

When you arrive at the jail you will most likely be searched, including a “pat down”.  This could be, but is not always, an uncomfortable and embarrassing body search done by a male guard for the men and a matron for the women. 

The guard may take your stamp and use it to see if it is real.  Either be sure and take any imprint that is made with your stamp with you, or make sure it is destroyed while you are there.  Do not leave the impression behind.

When it comes time to actually meet with the prisoner you will be taken by a guard to a room where, in most cases, there is a glass partition between you and the inmate.  You will use a telephone to communicate (just the way you see on television), and the documents will be passed through an open area in the partition for signing. 

Unfortunately sometimes the slot where you push the papers through is very small and you will not be able to get your journal signed.  I suggest if this is the case, that you have the inmate sign a piece of paper acknowledging that you witnessed his signature, and include all of the information that would be in your journal, then place that paper into your journal. 

The guard will remain with you until you have completed your task.

I have heard some stories about the notary being placed in a room with the inmate, but this is very rare.  Regardless, a guard should remain with you at all times.  

Once you are finished, you will be guided out and reconnected with any of your belongings being held by the guards, or that may have been placed in a locker. 

Lockdowns are a common occurrence in jails and prisons.  If you are there to do a notarization during a lockdown, you may have to wait a very long time to see the inmate.  Be sure and charge by the hour so in the event there is a lockdown, you will be paid for the time you spend waiting.

You should feel safe during this process.  It is not like they open a cell door and throw you in with a violent prisoner, but the process can be a little scary. 

So, the real drawbacks for doing jail/prison signings is the time involved.  You may also find that you have to park and walk a long distance to get into some facilities.  

You will have to determine how much to charge for these signings.  This should not be a flat fee, but a fee based on the time it takes you to travel to the location and the time it takes you to complete the job.  You will also need to figure out how to collect your fee if you don’t collect in advance. 

Structured Settlements

One type of signing you can add to your ever growing knowledge is something called Structured Settlements.

There are companies who specialize in nothing but these type of signings. The paperwork consists of about 5 pages, most of which has been completed prior to your receipt of this paperwork. 

Payment for these 10 minute signings is usually about $50.00. These signings are done for the purpose of providing funds from a settlement to the recipient sooner that funds were set up to be transferred. These often come from the result of a law suit wherein a certain amount is to be paid to the beneficiary over a long period of time. The companies who do structured settlements pay the beneficiary up front an amount smaller than the total amount of the settlement. That is how they make their money. 

The package consists of a set of instructions and about 5 or 6 documents.  There may or may not be the requirement that these documents be notarized but companies like to use notaries because of their

Professionalism and experience.

1. Most important! You must be able to take copies of the signers Identification and Social

Security card.  If you cannot take CLEAR copies do not take the signing. This is where a portable scanner will come in very handy!

2. You must be able to fax the documents within an hour or two after the signing. If you cannot, do not take the signing.
3. Documents are usually printed on letter sized paper and blue ink is required.

That is about all of the instructions but you need to make sure you can complete items 1 and 2!

Debt Consolidation 

This is another type of signing that may or may not require that you actually notarize any documents. This is basically a program offered to people who are in debt over their heads.  These companies have a contract with the debtor to collect funds on a monthly basis.  These funds accumulate until their account contains enough month for the company to negotiate a payoff of the debt which is less than the actual amount owed on the debt.

The debtor continues to pay monthly until such time as this contract is broken or all of the debts have been paid in full.

When hired to take care of the signing of their documents, the companies will usually ask that you represent yourself as a Representative of their company.  You are not an employee but you are representing the company to the debtor.

The documents are usually accompanied with a complete set of instructions on how to complete the signing.  There are very few documents and the signings take usually no more than 20 to 30 minutes.  A typical fee for this might be $50.00.  This is actually a fair fee if there are only a few documents in the package and the signings take a fraction of the time as a regular loan signing.

You need to decide if this is a signing you are willing to do for the price they offer you.

E-Signings 

The truth about E-signings is that you may not do it very often, so you really need to consider carefully if this is something that you want to do or prepared to do. The way that e-signings work is that you will be provided with a package of documents via e-mail, which you’ll be printing out. You’ll be printing one copy for signing and one copy for the borrower. Now these packages for e-signings are usually are verily; small. They may consist of an average of about 50 to 65 pages. 

In addition, you’ll going to be provided with an e-mail containing a link to the web page which you will be able to access with the borrowers for their own electronic signatures. A user name and a password will be provided to be able to access this website. In addition, once you have been allowed to access this website you will also be provided more information such as, the zip code of such property, social security number of the borrower, and loan number, etc. 

In order to complete these type of signings there are several large ticket items you will need:

A good laptop computer.

A wireless air card or other type of devise which will allow you to access the internet while away from home.

Blank CD’s.

Truth: E-signings may not be something you will do very often, so you really need to consider carefully if this is something you want to do and are prepared to do.

How they work: You will be provided with a package of documents via email which you will print. (One copy for signing and one copy for the borrower.) These packages usually consist of an average of about 50 to 65 pages.

You are provided with an email containing a link to a webpage which you will access with the borrower(s) for their electronic signatures. A user name and password will be provided to access this website. In addition, once you have been allowed access to the website you will also be asked to provide more information such as the zip code of subject property, social security number of borrower and loan number, etc.

Once all the required information has been entered you will then be provided with both the documents and an area for electronic signatures. The borrower’s will be able to view the documents with you and then click on their names to confirm that they are applying their electronic signatures to these documents. Once all the documents have been successfully reviewed and signed the package will be submitted electronically to the vendor and a copy of those documents can either be printed or saved to the computer. 

As soon as you have experience in these assignments, they can go verily quickly but they do take some amount of practice and they can be frustrating until you have the process down. The fact that you still have a lot of paper signings to do does mean that these are not particularly fast signings. 

In order for you to complete this type of signings there are several large ticket items that you’re going to need to have. You are going to need to have:

A good laptop or computer

A wireless air card to access the internet while you are away from home; and;

Some blank CD’s 

You’re going to need your own laptop because not all borrowers have their own computer and if they do—they may not have internet access or high-speed internet and you may not want to use their computer or they may not want you to use their computer. Most companies will specifically ask you that you take your own computer to the signing. There also experimenting with tablets now. So, if you have a tablet you might be able to do it that way. 

Now the only way you’re going to be able to connect with the internet is with an air card. The initial cost to purchase these air cards could vary from anywhere from 50 to 205 dollars and the monthly fee runs about an average of 60 dollars. So, this is something you will need to do your research on –talk to your cell phone provider and see what they have to offer. On the other hand, if the borrower would like to have a copy of those electronically signed documents you can either bring a printer, which is not very convenient or practical but a good way to do that is to save those documents to your desktop on the laptop and then transfer them over to a CD and provide that CD over to the borrower. 

Recommendation

So, I recommend that if you find that you are offered enough e-signings to purchase the mentioned items worthwhile than by all means plan your purchases and take all of the e-signings you can get, but unless and until you find that there is a good opportunity for you to earn money with these signings I would not run out and invest in these costly items. Furthermore, I don’t believe that they have perfected these e-signings enough to make them any easier than they were a few years ago. 

Once all of the required information is entered you will then be provided with both the documents and an area for electronic signatures. The borrower(s) will review the documents with you and will then click on their names to confirm that they are applying their electronic signature to those documents. Once all of the documents have been successfully reviewed and signed the package will be submitted electronically to the lender and a copy of those documents can be printed or saved to the computer.

Once you are experienced in these signings they can go fairly quickly but they do take some amount of practice and can be very frustrating until you have the process down. The fact that you still have a lot of paper signing to do does mean that these are not particularly fast signings.

Recommendation: If you find that you are offered enough E-signings to make the purchase of the aforementioned items worthwhile then by all means plan your purchases and take all of the E-signings you can get. Unless and until you find that there is a good opportunity for you to earn money with these signings do not

run out and invest in these costly items. TIP: While adding your contact information to the databases of signing services, ask them if they have a lot of E-signings in your area. That will be an indicator to you if you should or should not invest in the necessary equipment.

Additional Information 

Power of Attorney

Powers of Attorney provide for someone to sign on behalf of a person who will not be available to appear before the Notary such as a husband for his wife.

Title Company validates the Power of Attorney document.

Signing the documents.

Initialing the documents

There will be many times you will need to deal with someone using a Powers of Attorney to allow someone other than themselves to sign documents for them.

This may be because that person is going to be out of town or otherwise unavailable. We as signing agents do not need to be concerned with the validity of a Powers of Attorney. That is the responsible of the title company.

The only circumstance where a signer can appoint someone to appear before the notary and sign form them is with the use of a valid Power of Attorney.  The reason someone may want to have someone sign for them may be that they live in another area or are temporarily away from their home.  I have had a person who was having surgery and an extended hospital stay execute a Power of Attorney so his brother could sign his loan documents.

We as signing agents do not need to be concerned with the validity of a Power of Attorney. This is the responsibility of the title company. You only concern is to make sure that the signer signs correctly.

An example of how the person appointed as the representative in a Power of Attorney might be a wife signing for a husband might sign is as follows:  

There are the names of two people on the documents: James B. Martin and Beverly L. Martin. Mr. Martin has executed a POA (power of attorney) in favor of his wife and she will be signing all of the documents both for her husband and herself. She will sign for her husband as follows: James B. Martin by Beverly L. Martin, as his attorney in fact. When initialing documents for her husband she will initial as follows:  jbm by blm, atty in fact

And the wife will of course just sign her name on behalf of herself. 

On your acknowledgments both the name of the husband and of the wife will appear.  

One added note.  A Power of Attorney is an extremely powerful document.  If you are ever in a position to witness the signature and notarize this document, be very careful.  Make sure that you absolutely identify the signer and make sure that the signer understands the impact that signing this document will have.  If the person is elderly you want to make sure that a relative is not trying to gain control over someone who may not understand what it is they are signing. 

Trust Documents

TRUST DOCUMENTS

A Living Trust becomes effective during the lifetime of the Settler, aka Inter Vivos Trust.  This is a document which allows a people to designate who they would like their property or assets to go upon their death.  

The contents of a Trust clearly spells out who is in control of the assets and what actions they are authorized to perform such as the right to sell property and to encumber property.  

If a property has been placed in a Trust and the Trustees encumber the property then the Trustees of the Trust are required to sign the loan documents as Trustees.  This used to be a simple process.  Under the signature lines on the documents the name of the owner was printed with the word trustee appearing after the name.  The signer would then sign their name, place a comma and add Trustee to the signature.

In the past couple of years it has become much more complicated.  The lenders are now printing the names of the borrower’s along with words like “as an individual and a trustee of the xx trust”on some but not all of the documents.  In this case, the borrower’s should be signing their names only.  Not all lenders are asking for the same signatures.  We had a signing from Bank of America wherein we had the borrower’s sign only their names on the signature line above the verbiage described.  We received a call the next day and were told we needed to have the borrower’s add the word Trustee to their signature.

Three days later we had another Bank of America signing from a different signing service.  It also involved a trust so I called the title company to verify how they wanted the documents signed.  I was instructed to have them sign their names only with no verbiage containing the word Trustee. 

My suggestion to protect yourself is to call the title company and have them send you an email with an instruction as to how to have the borrower’s sign the documents.  This way, if there is a problem, you have their instructions in writing.