Never Buckle under Pressure
When a loan package was returned from a Company approved mobile notary, the escrow officer began to review it to ensure the documents were executed properly, when she noticed the documents were back-dated. She contacted the notary who admitted she buckled under the pressure of the mortgage broker and allowed the documents to be back-dated by the borrower, in her presence, and notarized them as such. Sadly, the unacceptable notary conduct didn't stop there.
The back-dating of documents has never been an acceptable practice. Sharron K. Burgum from Ticor Title Insurance Company in Portland, Ore. certainly understands this. Sharron scheduled a signing through one of our approved notary companies, Flex Closing Corp. The signing was scheduled for the evening of Wednesday, August 26, 2009, the last day the documents could be signed in order for the funding to occur on the last day of the month.
The documents were e-mailed to the notary too late for her to make the scheduled 6:30pm appointment. She immediately called the borrowers to inform them she needed time to print the documents and the appointment was rescheduled for 8:00pm. On her way to the signing the borrowers called to say it was too late, they wanted to re-schedule their signing for the next morning. The notary's company informed Sharron.
When the mortgage broker found out the borrowers did not sign, he was furious. He made arrangements to attend the signing in the morning. At the signing he pressured the borrowers and the notary to date the documents as if they were signed the previous day. After the documents were all signed and notarized he offered to hand deliver the documents to Sharron.
Upon receipt of the loan documents Sharron began to review them to ensure they were executed properly, that's when she noticed the date. Sharron contacted the notary who admitted she buckled under the pressure of the mortgage broker and allowed the documents to be back-dated by the borrower in her presence and notarized them as such.
Sharron immediately reported the incident to her manager, Jeanne Ayala. Jeanne contacted the National Escrow Administration department and a plan was formed. Sharron worked to set up a new signing appointment with a different notary and the National Escrow Administration contacted the mobile notary company, Flex Closing Corp.
Jeanne confronted the mortgage broker and informed him the borrowers would have to re-sign the loan documents. She also explained to him the Company chose to no longer work with him. In the meantime the lock expired, and the broker had to re-lock the loan at their expense. It turned out to be an expensive lesson.
The same mobile notary company selected a different notary to meet with the borrowers to sign a new set of loan documents. At the subsequent signing a few more errors occurred. The date inserted, which represented the expiration of the rescission period, was incorrect. It reflected an expiration date of four days out, not three, and the husband failed to sign the Notice of Right to Cancel. Additionally, the Errors and Omissions form was not executed by either borrower. The notary attempted to contact the borrowers to have the Notice of Right to Cancel corrected and initialed (with the lender's consent) and execute the Errors and Omissions form which also needed to be notarized.
The wife told the notary her husband had left for a hunting trip. The notary explained the forms would have to be initialed and signed or their loan would not be able to fund on time. The wife asked the notary to e-mail the forms to her and she would drive it out to her husband.
The notary e-mailed the forms to the wife. The wife e-mailed the executed and initialed Notice of Right to Cancel back to the notary. It appears the Notice was forged by the wife since the signature did not match any of the other documents signed by the husband while appearing extremely similar to the wife's signature. The other form, which had to be signed AND notarized, was not returned. Was the notary planning on violating the cardinal sin of notarization by not witnessing the signing of the document? Even if the form was returned the notary would not be able to legitimately notarize it since the signers did not personally appear in front of her as it related to this particular form. The rules of notarization apply to each and every form individually.
Sharron took the matter into her own hands and had the remaining two documents executed and notarized properly. She was able to fund and disburse her file. Thank goodness Sharron was alert and carefully reviewed the loan documents. This story could have had a much worse and costly ending. Not only was the mortgage broker advised we chose to no longer work with him the approved notary company, Flex Closing Corp., was also removed from the Company list of approved notaries.
It was Sharron's diligence that proved why the first and most important option of Document Execution Guidelines is to have the document executed in the presence of one of our employees. FNF settlement agents know back-dating documents is unacceptable and Sharron did not turn a blind eye to this unacceptable practice in her file. For her efforts she is being rewarded $1,000 and a letter of recognition on behalf of the Company.