MortgageDocs Blog

Power of Attorney Signing (POA)

POWER OF ATTORNEY SIGNING DEFINED:

In a power of attorney loan signing the notary will witness an agent sign for the loan on behalf of the borrower. A borrower’s physical condition or other incapacity might hinder him or her from being able to sign the paperwork. Therefore, the borrower issues authority to an agent (attorney-in-fact hereinafter called POA) who has the power to manage, dispose of, sell or convey the borrower’s personal or real property.

Since the notary will witness the POA sign, the notary will schedule the appointment to meet the POA. The borrower may or may not be present at the loan signing.

You (the notary) should prepare for the signing by: (1) Verifying the POA was pre-approved by the lender, (2) Informing the POA to have proper ID and a copy of the original signed POA at the signing, and (3) Confirming how the lender prefers the POA to sign, initial, and be notarized.

LENDER APPROVAL:

When the lender has pre-approved a POA can be used for the signing the lender will update the borrower’s signing detail when submitting the request in SignSTAT. The borrower may inform you of a POA when you’re scheduling or confirming the appointment even if nothing was previously mentioned on the signing detail. If this happens, be sure to let us know right away so we can check with the lender that the POA was approved prior to your signing appointment. If the POA verbiage is pre-typed on the loan docs, then you’re safe to assume the POA was pre-approved by the lender (since the lender specifically created the docs to be signed with a POA).

IDENTIFICATION:

You will verify the ID of the POA because your notarizing the signature of the individual acting as POA. Input the ID info in your journal (for those notaries located in a state that requires a journal). It’s not necessary for you to collect the ID info for the borrower since he or she is not signing the loan paperwork. However, do collect a copy of the borrower’s ID if the lender requests it returned with the package.

COLLECT ORIGINAL POA:

The borrower’s signing detail on SignSTAT will specify if you’re required to collect the original POA at the signing and return it with the loan docs. Otherwise check with the lender.

SIGNATURE:

Instruct the person acting with POA to sign exactly as the lender has pre-typed the POA verbiage under the signature line. Sometimes the POA is approved by the lender after the loan docs are already drawn. In this instance, check the borrower’s signing detail on SignSTAT for instruction on how the POA should sign or contact the lender if no specifics are stated.

The POA may have interest to the loan, property, or neither. When the POA is also signing the paperwork as a vested party, the POA will sign his or her own signature line in addition to the borrower’s signature line. Remind the POA to sign exactly as each signature line is printed.

The most widely used form of signature by the POA is:

(NAME OF BORROWER), by (NAME OF POA) attorney-in-fact

Depending on the lender, it may be acceptable for the POA to sign:

(NAME OF BORROWER), by (NAME OF POA) POA

(NAME OF POA) acting on behalf of (NAME OF BORROWER) as POA

(NAME OF BORROWER) by (HIS OR HER) attorney in fact (NAME OF POA)

INITIALS:

Docs that require the borrower to initial must be initialed in the same format as other docs were signed by the POA. Basically the formatting is identical, but the signature is replaced by initials. Using the examples in the SIGNATURE category above, the initials are as follows:

• (BORROWER INITIALS), by (POA INITIALS) atty-in-fact
• (BORROWER INITIALS), by (POA INITIALS) POA
• (POA INITIALS) acting on behalf of (BORROWER INITIALS) as POA
• (BORROWER INITIALS) by (HIS OR HER) atty in fact (POA INITIALS)

NOTARIZATION:

Notarization will vary by state. Check your notary manual or state legislature.

If your state allows or authorizes you to notarize a person’s capacity, you will include the POA capacity on your notary page.

If your state does not allow you to notarize a person’s capacity, you will notarize the individual name(s) only (each person you witness sign).

EXAMPLES:

For the examples below we’ll use the most common signature form (bolded above in the SIGNATURE category). The following names are fictitious and used for example purposes only:
Borrower - Mary Jane Smith
POA - Jack D. Smith
Notary - Sara Lee

Example 1: The POA has no interest in the property or loan, so the POA will only sign and initial on behalf of the borrower.

Example 2: The POA has vested interest in the property, so in addition to signing as POA he must sign his separate signature and initial line.

5 Ways to Gain More Notary Business in Today’s Mortgage Crisis

We frequently hear one request. How can I get more notary signings? Many notaries can relate to this predicament. They aren’t wondering whether their glass is half full or half empty, they’re wondering where to find the water.

We get this question a lot now that the industry has slowed down. You can generally attribute the lack of business to the current state of the market. In addition, the loan industry is worse in certain areas of the country such as California and Florida. Whereas many of our California notaries used to see a signing request once a day, many of them now see signing requests once a week. You can almost bet the market is the primary problem if you are located in a region that has experienced a more adverse impact from the economic situation.

Much of the problem lies outside of your control. Banks are eliminating risky practices reducing the number of loans they are willing to service. The result is fewer borrowers qualifying for loans. The federal government is trying to alleviate the pain by lowering interest rates which, in the long run, should stimulate growth. But it will take time before we’ll see the effects. While you are powerless to encourage banks to lend more money, in many cases there are things a notary can do to pick up more business. These are the five most important things you can do to gain more notary business this year.

1. Prompt communication - Reply to your emails and answer your phones ASAP

You should be extremely careful about doing this if you are in the middle of a signing. In most cases it is not appropriate to interrupt the flow of the signing in order to respond to an email or reply to a text message. You need to remain professional whenever you are with a borrower and part of that means giving them your undivided attention. In some situations you will be able to excuse yourself for a second in order to respond to an email or answer a phone call. A convenient time to do this might be if the borrower is on hold with the loan officer resolving some document discrepancy.

However, in all other cases, do everything you can to keep your communication lines open. Which means–keep your cell phone charged at all times and frequently check your email throughout the day. MortgageDocs has built a reputation of providing a notary for our client’s borrower in less than 30 minutes. Unfortunately, we don’t have time to wait for callbacks. If you do miss a phone call, return it as soon as possible. The longer you wait the less likely the signing will be available.

2. Accept everything that is offered…just be sure to keep your feet on the ground

Responding quickly is important, but you also want to make sure that you aren’t simply responding with variations of “sorry, I’m busy.” As much as possible, you have to take all of the business that’s offered to you. Turning down work now, could cost you work in the future.

Think about the potential long term impact of turning down work. If you were the only notary in your coverage area and you decided to pass up on an opportunity for a signing, a new notary will be added to complete the work. What you initially thought was the loss of one signing request, now turns into multiple requests as future orders are shared.

While we try to be as fair as possible when assigning notaries to loan signing requests, it makes sense to be known as the notary who never turns us down. If we contact five notaries in a given area and one particular notary stands out above the rest as being the most available, it is only natural to gravitate toward that notary with any future opportunities.

You still need to use discretion when accepting work. Never overcrowd your schedule to a point that is unmanageable (see picture). This is especially important during the end-of-the-month rush.

3. Ensure that your work is top-notch

Remember to apply the following principles for a successful loan signing:

• Be courteous, professional, and timely.
• Keep your focus.
• Avoid industry jargon; your instruction should be simple and concise.
• Do not bring children along with you.
• Be neat, clean, conservative, and professionally groomed. Dress for success!!!

It is also important to send the completed signing back to the lender without any errors. You should be in the habit of double and triple-checking your work.

4. Go above and beyond to satisfy the borrower

Now is not the time to rush through a signing. You need to make sure that every borrower is completely satisfied with the level of service you provided them. Don’t give them a reason to complain to their loan officer about the unfriendly notary. Instead, they should be telling their loan officer how much they appreciated the signing. It’s always a positive when a lender begins to request a specific notary because of their consistently outstanding performance.

5. Offer your best price

The last thing you want to consider when the cost of living has increased, is lowering your price. Believe me, I know. But let’s consider basic supply and demand principles for a moment.

Remember the Tickle Me Elmo doll? The demand for this toy skyrocketed in 1996, before it was even available for purchase. Unfortunately for Tyco, they did not anticipate the phenomenon that took place. When the doll became available for purchase the supply was so low and the demand was so high that stores were able to charge fees as outrageous as $1500.

Now let’s try to apply this concept to your notary service. In theory, your price is in an inverse relationship with the supply. Therefore, the higher your fee (demand) the lower the quantity of work you will receive (supply). If you are the cheapest notary in an area, and all other factors are equal, you will receive the highest quantity of work. On the other hand, if you are the only notary in your coverage area, you can demand more money for your service since the supply is low.

Your goal is to reach a state of equilibrium–a point where you are charging just the right amount to receive no more or less work than you desire. Obviously, if you’re getting so many offers that you’re having to turn work down, you have priced your service too low. On the other hand, if you price your fee too high, you might be passed over for the notaries with lower fees.

The problem with applying this concept to the loan industry is that the quantity of goods (# of available signings) is in short supply. In other markets, a company can play with their price and production until they come close to equilibrium. They can lower their fee to increase demand and all they have to do to make more money is increase their production. But that isn’t possible in the loan industry. The supply is narrowing by the day. Fewer borrowers are applying for loans.

For notaries, the signing service is the supplier so they have the most influence upon the price. When a loan signing that is in short supply becomes available, the signing service will find whoever offers the most competitive price (again, all other factors being equal).

Remember, the notary is only one piece of the puzzle. Everyone, including the signing service, must collectively offer their best price when the market tightens in order to allow lenders to make a better offer to borrowers who are ultimately the ones driving the market.

Hopefully, I haven’t completely confused you at this point. If I have, just ignore step 5.

In Summary

Work is slow throughout the nation. There is only so much within your control that you can do.

1. Providing prompt communication can set your service apart from other notaries who are less responsive.
2. Accepting all the work that is offered to you can place you in a good position for future work.
3. Performing top-notch signing services will keep everyone happy establishing you as a notary who provides quality service on a consistent basis.
4. Going out of your way to take care of difficult borrowers will give our clients a good impression of your service and may lead to direct requests for you on future signing orders.
5. Offering your best price will eliminate the temptation to use a notary with lower fees.

While none of these suggestions guarantee you’ll receive more notary business in 2008, it could mean the difference between staying in the industry and looking elsewhere.

We wish you all the best and look forward to seeing the market rebound!

Non-Vested Spouse

With more and more lenders expecting notaries to recognize when and what docs a borrower’s spouse should sign, we’re surprised to find out that this info is not easily available to notaries today. So to help you (the notary) complete the loan signing successfully, we’ve provided a list of document and state requirements.

Terms Defined:

• Non-vested means the individual is not on title.
• Spouse refers to an individual legally married to the borrower.

Spousal Docs:

• Mortgage/Deed and any Riders
• Truth in Lending
• NRTC (if spouse lives at the subject property)
• Itemization (if applicable)

Note: Some lenders may request the spouse to sign additional docs that are not listed above (including the HUD), but this instruction will be clearly documented in the package, on the signing request, or by an update.

Required States:

As you can see from the diagram below, most states require the non-vested spouse (borrowing or non-borrowing) to sign the spousal docs.

Additional Notes:

• The rules above apply according to the state where the property is located. Example: If you’re conducting a notary signing in Oregon but the property is in California, you must follow the spousal rules for California (which require the spouse to sign).
• Some lenders include pre-printed signature lines for the spouse while others do not. So it’s important to understand the state requirements and don’t hesitate to ask when you’re unsure.
• If the file is unclear or you want the lender to re-confirm the spousal requirements, you may put an update in SignSTAT prior to your appointment requesting the lender to verify.
• We’ve provided details for a non-vested spouse, but want to touch quickly on vested spouses. If the spouse IS vested on title he or she must sign the spousal docs, which applies in all states and whether the spouse is a borrower or not.

Notice of Right to Cancel: Borrower Copies

In continuation of earlier Notary Right to Cancel (NRTC) topics, we wanted to add another critical piece to the signing. In addition to filling in the Opening and Rescission dates on the bank copy, it’s extremely important to complete the dates on the borrower copies. After the loan signing, the borrowers can reference their NRTC copy to be reminded of their right to rescind the loan and within the designated time frame.

The following example of the NRTC form highlights the dates to be filled in and where the borrower initials (in some cases the lender may require the borrower to sign, which should be indicated by the word “signature” instead of “initials”):

The I Wish to Cancel section must remain blank (free from any writing) unless the borrower wants to use the NRTC form at the signing to cancel the loan. If the borrower signs or there’s any type of writing in this area by mistake, call the client immediately for instruction on how to proceed. Most lenders will allow you to switch the bank copy with the borrower’s copy, so the cancellation section is 100% clean.

For help with rescission dates, see How to Calculate the Rescission Period.

The Loan Industry Blame Game

How often have you felt like this guy?

As most notaries know, it isn’t uncommon for someone higher up in the chain of command to pass any blame they receive to the notary. Because of their independent status notaries are often targeted as the first scapegoat when an error happens. It’s easy to shift the blame to someone that the loan officer doesn’t know, as opposed to blaming the closer for misspelling the borrower’s name. Usually, the blame has been shifting from one person to the next, and since the notary happens to be the final link in the chain the criticism begins with them.

How to Play the Blame Game

The rules for playing The Blame Game are simple:

Start by identifying a serious problem. Then blame someone. Blaming involves:

• Point a finger directly at someone unrelated to the problem
• Come up with some unfounded false accusation to apply, clearly implicating the other person
• State it loudly and unashamedly
• Watch that person shrivel in terror

The goal is to keep the Blame Session going as long as possible. Remember, at no point in time is anyone allowed to offer a serious remedy of the actual problem. Bonus points for blaming people not involved in the meeting but keeping the Blame Session alive. The only way to end a Blame Game occurs when it seems inevitable that the Blame Session cannot continue. At this point, election of a scapegoat should occur.

How the Blame is Passed to the Notary

One example we used to see often is when a notary is blamed for missing a signature on a document that wasn’t in the loan package. That occurred more frequently when documents were overnighted to the notary. Now, with the notary typically printing the documents they have a safeguard in place against this happening.

Another example is when a notary is blamed for the borrower refusing to sign. Loan officers will complain that the notary either provided the borrower with inaccurate information or they led the borrower to question the quality of their loan. This is probably the most frequent accusation made against notaries.

Our Experience

We must admit that we occasionally come across notaries who are less than honest in their business practice. These notaries usually serve as brokers and they take notary jobs in order to persuade borrowers that a better loan is available. These notaries never last long in our network because we keep a detailed history of the complaints we receive. It quickly becomes obvious when a notary is lying to us.

But by and large, the notaries we have worked with over the past decade have been up front and honest individuals. Time and time again they have proven their integrity when situations like this arise.

We’ve also learned that our clients have good intentions too. Ultimately, their goal is to get the loan documents signed and funded. They aren’t crouching behind every signing table like a cat with a bird in its sights waiting to pounce on the notary the moment they leave. They simply want to keep their borrower happy and ensure that everything goes through without trouble. It is critical that you keep this in mind whenever you find yourself in the middle of the Blame Game.

How a Notary Should Respond to Unfair Blame

It’s easy to become discouraged and dismayed by the false accusations that have been made against you. A natural tendency is to react with an exasperated defense. You want to make it absolutely clear that you are not guilty. Some notaries have become so embittered by the unjust charges that they disengage and refuse to complete the work.

Rather than adamantly proclaiming your innocence, a better approach is to help us provide the lender with a quick correction. You may feel that it is too demoralizing to correct an error that isn’t your fault, but you will gain more respect by working toward a solution rather than dwelling upon things outside of your control.

Now please hear me out, I’m not saying you can’t defend yourself or state your side of the story. My concern is when your justification leads you to believe that you shouldn’t be a part of the resolution. We all have to keep in mind that while we are deflecting the blame from one person to the next, the borrower is being ignored. The person who should be our primary concern becomes an afterthought. In every case, the borrower is the one with the most to lose.

Once we’ve determined the next step to solving the problem, then we can discuss where the fault lies. It’s much easier to hash out the details of the problem after it is clear that we are all working together with the best interest of the borrower in mind. It’s also important to know that MortgageDocs tries to remain impartial about the culpability of the notary until we’ve heard their side of the story. We don’t indiscriminately remove notaries from our system based upon one unproven complaint. You can trust that we will deal with the situation in a fair manner.

What about your experience? Have you ever been caught in the middle of the Blame Game? How did you handle the situation?