It is not uncommon for lenders to open orders as refinance orders when they are really sale orders, involving the transfer and encumbrance of the subject property. There are all sorts of reasons why the orders are opened as loans instead of sales, such as lower interest rates, higher loan amounts, no down payment requirement, less stringent loan underwriting guidelines, different fee structures, etc. Regardless the reason, escrow officers are sometimes challenged on how to get these transactions closed properly.

Our Lawyers Title operation in San Diego was processing an order just like this where the borrower was obtaining a $276,000 loan. The property was owned by a corporation, but the borrower on the loan documents was an individual, not an officer of the corporation — an entirely unrelated individual. When the loan documents were received they were sent to a mobile signing agent to sign the borrower. A deed for the record owner to sign — an officer of the corporation — was also sent.

The documents were executed and sent back to the escrow officer, who in turn sent the recordable documents — deed and deed of trust — back to the title assistant to record. The title assistant on this order was Teresa Burr. She abstracted the documents and noticed the signature of the party signing on behalf of the corporation did not look like any signature on any previously recorded document in the chain of title.

Teresa reached out to the escrow officer and asked which signing service company was contracted to conduct the signing ceremony. Teresa requested their notary provide a copy of the identification used by both the grantor and the signer of the deed of trust, and/or a copy of the notary journal page reflecting the type of identification presented at the signing.

The notary provided a copy of a passport which was used as identification for the person signing on behalf of the corporation and promised he would later send a copy of the driver's license used as identification by the borrower signing on the loan documents. Teresa notified the escrow officer she would not record the documents and allow the transaction to close until she received the remaining documentation.

Shortly thereafter the notary contacted the escrow officer and confessed he had never seen the original passport, the signer simply presented a copy of the passport at signing. The notary also stated the individual signing the deed of trust appeared to have no idea what she was signing and the driver's license presented did not contain the required security features for a California issued driver's license. But he notarized the documents anyway!

In response, Teresa told the escrow officer the transaction would not close until the signers were able to re–sign the documents and provide acceptable identification. The escrow officer reached out to the loan officer for a new set of loan documents and a new signing appointment. The loan officer told the escrow officer he was informed by family members, the principals had fled the country to Mexico and were unable to return to re–sign any of the documents.

Although the transaction ended up cancelling, the Company is grateful Teresa recognized a potential forgery and halted a loan transaction with a borrower who might have been incompetent to sign loan documents. Her actions saved the Company from a potential claim from the insured lender of $276,000 and a possible claim from the real owner of the property for facilitating what could have been an illegal transfer of their property.

For her expertise and keen sense of wrong doing, Teresa was rewarded with $1,500 and a letter of recognition on behalf of the Company.