Loan Signing Services

Archive for the ‘Loan Signing Services’ Category

I read an article this morning on InmanNews, written by Ilyce Glink, entitled: ‘Don’t make this mistake when refinancing’. She gave some very good advice in saying that, no one should ever sign their name to a legal document without understanding exactly what the documents says, and what the transaction is all about.

As a notary signing agent, I see it firsthand: borrowers are so anxious to get the signing over with, or they’re so distracted, that they don’t take the time to read what they’re signing. And very few of them ask questions. If they do ask questions, they are usually not the right types of questions to ask. She suggested to borrowers: “If you don’t understand what is on the page, then keep asking questions until you do understand.” I agree.

Reading every single word, of every single document, could make for some very long closings. I, for one, am not in favor of sitting through a closing if a borrower wants to take the time to read over 100 pages of loan documents, and try to decipher the meaning of every word they don’t understand.

Nevertheless, I think that borrowers should take more time in understanding what it is they are signing. Even though they have a 3-day right to cancel, in most cases, I would venture to say that, very few of them actually take the time to read every single page of their copies.

A few days ago I wrote an article: Deed of Trust: ‘Does anybody really read all of this?’, in which I suggested that borrowers take the time to read this very important document. I dissected parts of the Deed of Trust and pointed out things they should look for. I have also written articles on other loan documents that the borrowers will encounter.

Which brings me to notary signing agents, and the role that we can and should play. There is a very strong mandate for notary signing agents to become very knowledgeable about all of the loan documents. Borrowers are becoming more and more skeptical (and savvy) as a result of the subprime fiasco, and they will want more time to read and understand what they are signing. And, if they take the advice of Ilyce Glink, they will ask more questions.

No, notary signing agents should never give legal advice. But there are nevertheless very many questions that we should be able to answer. There are many ways in which we can divert a potential no-sign into a smooth and successful closing. It is imperative for us to become as highly skilled as possible.

It will be a challenge. But I believe that notary signing agents are up to it.

Good luck.

When a notary signing agent receives the loan documents for a closing, the documents are not necessarily in the order in which they should be presented to the borrower.

One might think that it doesn’t matter. Just start from the top of the stack of documents and work your way down. Just get them signed. That’s the objective. Right?

Not necessarily.

One of the things I do as a notary signing agent is try to put myself in the position of the borrower. When I’m presenting the documents, I try to imagine which documents I would want to see first. What would be most important to me. So I take certain documents and put them at the top of the stack. (I’ll use a yellow sheet of paper as a bookmark so I know where to put it back when I send the documents back to the title company.)

The very first document that I present to the borrower is the HUD Settlement Statement. I have actually received a set of documents in which it was placed at the very bottom. It doesn’t matter. It goes to the top. That document shows all of the important numbers, so the borrower shouldn’t be kept in suspense. It’s also a document that they are entitled to see one business day before the closing. That rarely happens. So the least the signing agent can do is show the borrower the Settlement Statement as soon as possible.

The next document that I go over is the Right to Cancel (if there is one for that particular transaction). I do this for a couple of reasons. It has been my experience that the borrower is more at ease with signing the documents if they know that they have that right. There’s no point in pretending that they don’t have a right to cancel by placing the document at the bottom of the stack. Don’t worry. The borrower is not going to cancel the loan, just because you showed them that document. If they cancel, it’s because they changed their mind and decided they didn’t want the loan.

Another reason that it’s one of the first documents that I go over is because, they will be getting 2 copies of it to keep. I place those copies in the envelope with the rest of the borrower’s copies. That way the envelope is sealed and out of the way. I normally don’t have to open it back up for the remainder of the closing. I want the flow of documents to go as smoothly as possible. The fewer the interruptions, the better.

There are some other key documents that I want to show the borrower. They are curious to know what their interest rate will be, what their payments will be, if they have an adjustable rate, a prepayment penalty, and a few other key terms of the loan. If these documents are not already at the top of the stack, then I will present the Note and Truth in Lending. I put a tab on the payment coupon because it shows the actual payment amount, when it’s due, and where to send the payment.

There are several other documents that I will put a tab on. I try to anticipate what questions the borrower will have. So I want to be able to put my finger on that document. It doesn’t have to get signed right away. Just let them see it, then put it back in the stack. Anything to satisfy the borrower’s curiosity and give them peace of mind.

The main thing is that, the order in which the documents were received by the notary signing agent is not necessarily the order in which they should be presented. And changing the order can put the borrower at ease and make the closing go smoothly.

Usually when the primary borrower has bad credit, they ask a secondary party to guarantee to pay for the loan and they are called a co-signer.

Many students do not start out with credit accounts and they have never even had a car loan, as a result, they have little or no credit score at all or what credit score they have is made from bad choices. Often times, students have charged more than they can pay off on a credit card making it hard for them to make their payments.

Having no credit score at all is better than a credit score full of late or never made payments , and both examples will put the potential borrow into what lenders consider a high risk category. Loan officers, even in Federal student loans plans, will often look at that with a cautious eye. Loan applications may be denied, or in borderline cases a higher interest rate is charged to offset the risk and compensate for higher default rates.

To up the chances of getting a loan, a co-signer will be needed if you are in these high risk categories. Most often the parents are considered to co-sign the loan. The parent’s FICO score, payment history and other information is reviewed before a lender will consider giving you a loan. At the same time, the credit quality of the parents becomes the primary factor for deciding the interest rate assigned. Generally those with a poor credit score will pay higher interest rates than those with excellent credit ratings.

The difference in the amount of interest charged on one of the more popular programs is more than $5000 when comparing 4% to 6% rates. Due to the way interest rates are compounded, this amount is possible when getting such a large loan.

For example, it isn’t uncommon these days for students and parents to borrow as much as $100,000 to finance an undergraduate education. Even though you make your interest payments when you are going to college (so that it does not add to the balance to be repaid) the payment would be $567 per month at a 6.8% interest rate. The annual amount you will pay for interest will be almost sixty-six hundred dollars.

Reducing that interest rate to 5% (the official rate for a need-based Perkins loans) lowers those numbers to $417 and $4,820 and do not forget that the example we have shown is assuming repayment begins right away. Deferring payment until six months after leaving college, the most general scenario, will result in much higher amounts unless the interest is deferred or subsidized.

When using a co-signer who has a good credit score, you are more apt to get better interest rates and pay less over the life of the loan. Run through some sample scenarios by using a loan calculator such as those available online. The information detail in this article will form a crucial part of any student loan consolidation info.