Colorado Springs Notary - Leon Austin

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Right to Cancel: 2 signed copies

right of rescissionIt is understood that, if a borrower has a right to cancel, they are to receive two copies of the right of rescission.  This is a federal requirement.

 

 

Should the borrowers sign their 2 copies of the right to cancel?  This was a question that was raised on one of the notary message boards recently.

Why should they sign it?  The copies are going to be kept by them.  They might not even cancel.  So it's a waste of time to have them sign their copies, isn't it?

It might be a waste of time.  But that's not a call that I make. 

I always have the borrowers sign their 2 copies of the right to cancel.  Occasionally a borrower will ask, why they are receiving 2 copies.  I explain that it's a federal requirement, for one thing.  Also, if they do use one of their copies, they will still have one in their possession as a record.  It is signed and dated for the day on which they received it.

I recently did a closing in which it was partially explained why the borrowers must sign their 2 copies:

receipt of right to cancel

According to this, it is to "release and indemnify" the lender.

So I always have the borrowers sign their 2 copies of the right to cancel.  No one may ever find out if the copies were signed or not.  And the borrowers may not cancel the loan.  But it's done nevertheless -- not only to "release and indemnify" the lender, but also to fulfill my responsibilities as the notary signing agent.


For more information about the Right of Rescission, see:

The Right of Rescission Under Truth-in-Lending

Comment balloon 13 commentsLeon Austin • January 19 2009 07:44AM

Comments

You have a very good idea and a valid point.  I am going to make sure they are always signed.

Posted by Ella Glover (Lubbock Homes) over 11 years ago

great idea - so many people have no idea what the law is in a transaction!

Posted by Richard Shuman, Real Estate Broker - Orlando Area - Love Referrals (The Only B.S. I Have is from the University of Massachusetts) over 11 years ago

I think you are getting into a area where we the loan-signers don't need to go.  If the lender wants the borrower(s) to sign their copies and, this has ppened 1or 2 times in the 6 years I have done loan-signings, than I will do it.

Less than 1% of homeowners actually cancel a refi and I think they can figure it out by themselves.

Just my opinion. 

 

Posted by Joan Bergstrom, Mobile Notary, Riverside CA (Joan Bergstrom Mobile Notary) over 11 years ago

What are you talking about, 'an area where we don't need to go'The instructions say to sign it!

I have always been instructed to provide the borrowers with 2 signed copies of the right to cancel.

That is the line where they acknowledge RECEIPT of the right to cancel. NOT the line where it says 'I Wish to Cancel.'

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This is from instructions I received years ago when I was working with NotaryPro:

"Don't Leave Without Leaving Signed Notice of Right to Cancels in Borrower Copies! 

 
To protect yourself and your lenders you MUST leave two signed copies of the Notice of Right to Cancel (NRTC) with each person listed on the security instruments.

The NRTC gives borrowers seeking Home Equity Line of Credits, second mortgages or loans other than a "new" real estate purchase the opportunity to the right of rescission under Federal Reserve Regulation Z-Truth in Lending-226.15. The right to rescission under Regulation Z is three business days, excluding Sundays and Federal Holidays. Failure to accurately provide this notice can allow the borrower up to three years to evoke their right to rescind.

It is the responsibility of the Signing Agent to fill out the NRTC for each person listed on the security instruments. In fact each person on the loan must receive 2 copies of the filled out, dated and signed Notice of Right to Cancel documents. Even though you may have provided the lender with completed and signed copies, occasions may arise in which borrowers request to rescind years later because they claim the NRTC given to them was incomplete or not filled in with all the signatures and dates.

Protect the quality of your work, your relationship with NotaryPro and your lenders by carefully following these rules for each and every applicable signing:

  • The Notice of Right to Cancel must be given individually to each person on the security instruments.
  •  Each individual must be given two copies of the completed Notice of Right to Cancel.
  • The Notice of Right to Cancel must be completely filled out including the borrower's copies.


Paying special attention to these details will avoid potential problems in the future." 

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I got those instructions years ago.  Maybe I was an impressionable signing agent back then, but I have been following those instructions ever since.  And that is not the only company that has instructed signing agents to leave 2 signed copies of the Right to Cancel with the borrower.

 

Posted by Leon Austin, Colorado Springs Mobile Notary (Mobile Notary Services) over 11 years ago

Where did you get this information?

It is the responsibility of the Signing Agent to fill out the NRTC for each person listed on the security instruments. In fact each person on the loan must receive 2 copies of the filled out, dated and signed Notice of Right to Cancel documents. Even though you may have provided the lender with completed and signed copies, occasions may arise in which borrowers request to rescind years later because they claim the NRTC given to them was incomplete or not filled in with all the signatures and dates.

Posted by Joan Bergstrom, Mobile Notary, Riverside CA (Joan Bergstrom Mobile Notary) over 11 years ago

Joan,

I have received those same notices and requests from multiple title, mortgage and signing companies.  I have questioned why this is required and no one was able to provide a legitimate answer.  It appears this began when a high volume of consumers started having problems with their adjustable rate loans and complaints of fraud escalated.

I haven't seen that request in recent loan packages that I have received. 

Posted by Pamela Knight (Urban Knight Enterprises, Inc.) over 11 years ago

We are notary/loan-signers and I don't think we should get involved with what a lender requires as far as how many RTC documents are signed.

I have signed several loans over the years that had 8 or more RTC in a loan package (and the same amount in the borrower(s) package because I have printed their copies)  I just get them all signed and send them back.

I have worked for a few companies that require signed copies of the RTC for  the borrower(s) copies and I get them signed as required.

I don't think it is our responsibility to get 2 RTC signed for  the borrower(s) copies unless specifically requested by the lender.

What does everyone else think?

Posted by Joan Bergstrom, Mobile Notary, Riverside CA (Joan Bergstrom Mobile Notary) over 11 years ago

Hi Joan,

I agree with you and work within the parameters of what is required by the HUD/RESPA standards.  I make necessary date modifications to the rtcs and inform the borrowers of the request the company.  However, I do not enforce them to sign their copies as well, that is strictly optional on their part. 

My experience in attending closings with attorneys has been quite interesting.  I have been informed that having people signed more than what is not required by law is breaking the law.  For example, when it is requested that the borrower signs multiple copies of their mortgage deed, it is deemed as unwarranted and the borrower can refuse to sign them.  By law, (per advise of attorneys) the borrower is only required to sign one original mortgage deed. 

So in essence, if Company X wants any additional copies of a particular document signed I always attempt to have them or the loan officer call the borrower prior to or during the closing to explain there reasonings for the request. Usually when I request that of them, I am often told it is not warranted and don't worry about getting those additional docs signed.   

   

Posted by Pamela Knight (Urban Knight Enterprises, Inc.) over 11 years ago

"I have signed several loans over the years that had 8 or more RTC in a loan package (and the same amount in the borrower(s) package because I have printed their copies)"

This sounds like a totally different subject. 

The only thing I'm saying is that I give the borrowers 2 copies of the RTC to keep for their borrowers copies.  And they sign those 2 copies. 

What is so complicated about that?

 

 

Posted by Leon Austin, Colorado Springs Mobile Notary (Mobile Notary Services) over 11 years ago

There is no reason to have a borrower sign their copies of the RTC unless the company who hires us  requires it, then I get them signed.

There isn't a Federal law that says the borrowers copies must be signed. 

 My statement on getting 8 copies signed is just complying with what a particular lender wanted me to do in a particular loan package.

 

Posted by Joan Bergstrom, Mobile Notary, Riverside CA (Joan Bergstrom Mobile Notary) over 11 years ago

I just follow instructions that were given to me a long time ago:

"Don't Leave Without Leaving Signed Notice of Right to Cancels in Borrower Copies!"

Whether it's a federal law or not, doesn't concern me.  I follow instructions.

If it's something that is illegal, I won't do it.  But the company must have had a reason for making this part of the instructions.

If you don't want to do it, then that is up to you.

 

 

Posted by Leon Austin, Colorado Springs Mobile Notary (Mobile Notary Services) over 11 years ago

You were following the instructions from one  particular company and applied it to all your future signings.

 

That is your prerogative and getting the borrower(s) copies signed is certainly not going to get a Notary/Loan-Signer any problems, but the vast majority of companies (99%) do not require the signing of the borrower(s) copies.

Posted by Joan Bergstrom, Mobile Notary, Riverside CA (Joan Bergstrom Mobile Notary) over 11 years ago

I have posted the instructions that I received years ago. They are compelling enough for me to follow for all closings. 

And if I did a closing last week in which the lender wanted the borrowers to sign their copies of the RTC, then it seems like following those instructions, for whatever reason, is still a good practice.  'Better safe than sorry.'

Good luck.

 

Posted by Leon Austin, Colorado Springs Mobile Notary (Mobile Notary Services) over 11 years ago

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