in this issue

The Chicago Title office in Salinas, California, received an electronic loan document package from a local lender on one of Jill Mason's files on March 25, 2016, Good Friday. Jill was out of the office on vacation, so her trusty assistant Tisha Castaneda worked up the file, packaged the documents and made arrangements for a mobile signing agent, Vicky, to meet with the borrower on Saturday, March 26, 2016.

At 4:15 p.m. on Good Friday, the lender increased the loan amount by $4,000 and sent a link to a new set of documents. The office had already closed for the Easter weekend and Tisha was on her way home.

On Monday, March 28, 2016, when Tisha discovered the new set of documents, she worked up the file again with the new loan amount, and scheduled another signing appointment with Vicky and the borrower for later that day.

Jill notified the loan officer a new signing appointment was scheduled and the three day right of rescission would start after the second set of documents was signed on Monday, later that day.

The loan officer responded to Jill's message on Tuesday, March 29, 2016. According to the loan officer, they sent the new documents to Vicky but she printed the wrong set when she went to meet the borrower on Saturday, March 26, 2016.

The loan officer insisted he sent Vicky new documents but when Jill spoke to Vicky on Tuesday, March 29, 2016, she indicated she never received an email with the revised documents. Regardless of the confusion, the loan officer said his own notary, Enrique, was sent to meet with the borrower on Saturday to sign the correct documents.

Jill was suspicious and called the borrower to ask him whom he met with and how many sets of documents he had signed. The borrower told Jill he met with Vicky two times, once Saturday and once on Monday night. She asked him several times if he met with anyone else to sign the same documents and he said, "No, only Vicky." Jill sent the following email to the loan officer:

  Tuesday, March 29, 2016

Hi Peter,

I have spoken to both the notary Vicky and to the borrower, the borrower said he has only signed two times, once on Saturday (wrong documents) and then again last night (corrected documents), both times he signed with my assigned notary Vicky. He has not signed with any other notary. 

Neither I nor the notary received the redrawn documents until Monday, the new set of documents were emailed to escrow at 4:15 p.m. on Friday and we were already gone for the day, we closed early due to Good Friday so we did not get the documents until Monday, we were not told that the loan was being redrawn so we were not expecting new documents. Vicky said she was not notified by anyone or sent a second set of documents until yesterday.

We will have the re–signed loan documents back tomorrow and will send them out tomorrow for funding review.

At which point the loan officer called Jill and said the borrower was confused — that he had met with another notary, Enrique, on Saturday to sign new documents. Jill asked him point blank if he was being honest. Why would the borrower tell her he signed twice with Vicky but not with any other notary?

The loan officer stuck to his story, so when Enrique came to the office on Tuesday to deliver the signed documents Jill asked him flat out when the documents he handed her were signed and he indicated the borrower had "JUST" signed them.

Jill looked at the date of the documents and said if the documents were "just" signed then why were they dated Saturday, March 26, 2016? Enrique's response was that he was instructed to back–date them by the loan officer and that Jill was aware of the back–dating of the documents — it had been already "arranged." Jill fired off another email to the loan officer as follows:

  Tuesday, March 29, 2016

These documents are not good, the borrower just signed them today and they are back–dated for Saturday. I asked the notary when they were signed and he told me just now, he said he thought I was "AWARE" they were being back–dated, I told him back dating documents is fraud and he can lose his license and pay fines, and I now have knowledge so I cannot accept them.

We can only use the documents that were signed on Monday night by the borrower if the borrower wants to proceed with the loan.

Jill returned the documents notarized by Enrique to the lender on Tuesday night directly to their funding department in Los Angeles with a note on the top of the Lenders Instructions that read "Chicago Title is not able to issue a loan policy of title insurance for this loan due to the knowledge the notary back–dated these documents." Jill then sent this email to the document drawer:

  Tuesday, March 29, 2016

To whom it may concern:

I will be returning these loan documents at the request of the loan officer, Peter. These documents were signed TODAY but back–dated to Saturday by the notary hired by Peter. This specific notary will no longer be able to notarize documents for Chicago Title Company.

Chicago Title is declining to issue a loan policy of title insurance using these documents. In order for Chicago Title to proceed with this transaction and insure the Lender we are able to accept the documents signed on Monday, dated Monday and notarized by a Chicago Title's approved notary, these documents are expected to arrive in my office on Wednesday, March 30, 2016.

Please advise how you wish to proceed.

Please acknowledge receipt of my email and acknowledge that you are aware the documents you will receive tomorrow notarized by Enrique have been back–dated.

Jill wanted to be sure to cover all her bases and have a record in writing that she notified the lender of the back–dated documents. The loan officer called Jill and asked her NOT to send an email, she told him she had to be sure she had done everything in her power to protect the lender by notifying them of the back–dating and that she had to have a record of the notification and a simple note on top of the docs would not be sufficient.

Shortly thereafter Vicky called and said she was notified via text by the loan officer to give him the documents she signed on Monday. Little did the loan officer know but Vicky had just delivered the documents to Jill to return for funding. Jill let the lender know this set of documents "ARE VALID" if they want to proceed and close with the correct signed and dated documents. Jill called the national escrow administration department to report the incident and to ensure Enrique and his signing service company were no longer approved to conduct signing appointments on transactions closed and insured by our Company.

This is not the first time Jill has caught the back–dating of documents. She was featured in the October 2009 edition in a story entitled "There is No Right Way to do the Wrong Thing!" where a notary agreed to back–date loan documents to cut the rescission period short for an additional $30!

Jill was rewarded in 2009 and again in 2016 for her ongoing efforts to detect and prevent fraud in every transaction assigned her. Her manager was ecstatic to present her with the $1,500 reward along with a letter of recognition from the Company. Jill's latest reward brings the total amount paid by the Company to its heroic employees and agents to $155,500!




The Truth in Lending Act (TILA) of 1968 is a federal law designed to protect consumers who take part in credit transactions. The law protects consumers by requiring clear disclosure of key terms. It also provides consumers, in certain instances, with the right to rescind, or cancel, the credit transaction. This portion of TILA was not repealed or replaced by the new consumer finance law.

It is the lender who must ensure the requirements of Regulation Z are met and adhered to. If that is true, how does the settlement agent fit in? The settlement agent regularly oversees the signing and delivery of the notices pursuant to the lender's written instructions. The lender is relying on the settlement agent to have a clear understanding of the disclosure requirements and how the rescission works as specified under Regulation Z.

Failure to provide the proper disclosures and follow the rescission requirements could provide a borrower with the ability to claim their loan is invalid. If a lender suffers a loss due to the borrower's claim and they feel the loss was the responsibility of the settlement agent pursuant to their instructions the settlement agent may have to share in any losses incurred by the lender.

Our lender customers expect the settlement agent to ensure the documents are delivered and executed by the borrower in accordance with Regulation Z. If we select an outside notary to conduct the loan signing that liability does not go away. It is never acceptable to allow documents to be back–dated.



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