New CA thumbprint law

A new law recently enacted by Governor Jerry Brown will now require all California notaries to collect a thumbprint for any persons needing a notarization. This new law becomes effective on January 1, 2013. It also prohibits Notaries from performing a proof of execution by subscribing witness on any document that effects real property. The only other state at this time requiring a thumbprint is Illinois. But I am sure other states will soon follow. I strongly recommend obtaining thumbprints for all notarization's no matter what your state laws are at this time. The added security has proven to deter fraud and assist law enforcement in identifying suspects. Lisa Scanlon, CSA 941-447-7130 www.scanlonsigningservices.com

Mechanics liens being challenged

Two states (Rhode Island and Connecticut) recently invalidated mechanics liens against commercial properties because they were improperly notarized. An Acknowledgement was used instead of a Jurat. A Jurat requires the signer to give an oath or affirmation attesting to the truthfulness of the document. Notarizations are essential for mechanics lien statements across the United States but whether a mechanics lien does or does not need notarization varies from state to state. We must keep up with state laws and be aware of when an Acknowledgement is needed or a Jurat. Sincerely, Lisa Scanlon, CSA 941-447-7130 www.scanlonsigningservices.com

Federal Agency seeking comments on new mortgage proposals

The Consumer Financial Protection Bureau is seeking comments on a set of proposed rules designed to protect consumers from "robo-signing" and the foreclosures it caused. The federal agency states these new rules are a result of the foreclosure crisis and will effect how mortgage servicers do business. The proposals would create new rules under the Real Estate Settlement Procedures Act (RESPA) and the Truth and Lending Act (TILA) that requires extensive record keeping and mandates to offer consumers alternatives to foreclosure. Members of the public have until October 9th 2012 to comment on the rules. Lisa Scanlon, CSA 941-447-7130 www.scanlonsigningservices.com

FHA guidelines for Paying closing costs

These days many of the FHA Borrowers that I work with require Sellers to pay most of their Closing Costs, so I need to be on top of what the FHA Guideline On Seller Paid Closing Costs are. The FHA Guideline On Seller Paid Closing Costs are very specific, but could cause some last minute surprises if not explained correctly, and understood by the Borrower. FHA does not require that a Buyer put any of his or her own money towards Downpayment and/or Closing Cost. All of the money for Downpayment and Closing Costs can come from an acceptable gift source such as a: Family member Employer Non Profit State Bonded Program like CHFA in Connecticut FHA will not allow a Seller to contribute ANY money towards Downpayment, but they will allow the Seller to contribute up to 6% of the Sales Price towards the Buyers Closing Costs. This sounds good and it is, but I rarely see the Seller actually pay the Buyers Closing Costs. In reality what happens is the Seller raises the agreed upon Selling Price by the amount of the Closing Costs that they will be contributing. This means that even though the Buyer can receive up to 6% towards Closing Costs, they should not request any more than the actual amount of Closing Costs that the Seller will be allowed to pay at the Closing. If the Buyer asks for more money than the Seller will be allowed to contribute towards Closing Cost, the Seller gets to keep the difference, and the Buyer ends up paying more for the house than they needed to. This means that before a Buyer or their Realtor asks for Seller Paid Closing Costs, they need to talk to their Loan Originator, and have him or her give them a very close estimate of what the Total Closing Cost will actually be. In figuring the Estimated Closing Costs, the Loan Originator will need to take into account the Closing Cost that FHA will not allow the Seller to pay, and subtract them from the Total Closing Cost Estimate. The Closing Costs the will need to be deducted from the Total Closing Costs are any Closing Costs that are paid before the Closing. Those will include any fees paid to the Lender or other vendors prior to the Closing. Possible items that maybe required to be paid before of the Closing are: Appraisal Fee Application Fee Condo Questionnaire Homeowners Insurance There are other fees that could possibly be required to be paid before the Closing, but these are the most common ones. However, even though I have included Homeowners Insurance in the list above, there is away to include them into the costs that the Seller will contribute at the Closing. All Lenders will require that the Borrower obtain an insurance binder before the Closing, but they do not require that the premium be paid prior to the Closing as long as a check will be sent to the insurance company at the time of the Closing. However, some insurance companies will not issue the insurance binder without a payment, so what I advise my Borrowers to do in that case is to just pay them one month premium, and the other 11 months paid at the Closing. That way they can maximize the funds that that they can receive from the Seller, and reduce their out of pocket cost. I have heard of angry Buyers that did not find out until the Closing that they could not be reimbursed for the items that they paid before the Closing. That is not the type of surprise that anyone wants at the last minute. I make sure that my Borrowers understand this when I am Pre-Qualifying them, when I am doing the Mortgage Application with them, and after the loan is approved and they are now going to shop for Homeowners Insurance. I want them to take advantage of ALL the funds that the Seller has agreed to contribute, and I don't want an agree phone call from my Borrowers after the Closing. This is something that can not be explained enough, and should be reinforced at every appropriate opportunity. FHA Guideline On Seller Paid Closing Costs are very clear, and need to be followed, because FHA does not provide any flexibility when it comes to this issue. Lisa Scanlon, CSA

Huge FHA Announcement

Starting June 11, 2012 FHA will lower its Upfront Mortgage Insurance Premium (UFMIP) for certain FHA borrowers with a drop to just .01%. The past rate of PMI on FHA loans made the streamline almost impossible due to the lack of benefit to the homeowner. Borrowers will now be able to get into a streamline FHA loan that they were previously unable to get. To qualify borrower must: *be current on your existing FHA mortgage. *your current FHA mortgage must have been endorsed by 5-31-09 Also employment and income verification is not needed and no credit report or appraisal is required. These changes took effect on 6-11-12. Sincerely, Lisa Scanlon, CSA 941-447-7130 www.scanlonsigningservices.com

New RESPA rules may simplify mortgage documents

The Consumer Finance Protection Bureau has proposed revisions to the financial disclosure forms that are included in loan packages in order to simplify the process. The redesigned Good Faith Estimate and Closing Disclosure forms attempt to make it easier for the borrowers to understand there loan terms. The two forms required currently in all loan packages are the Truth and Lending Disclosure Statement (TIL) and the Real Estate Settlement Procedures Act (RESPA), currently contain simmular information but often times are confusing for the borrowers. By using plain language and reducing redundancy, these forms should make the loan process and signing much easier to understand. The CFPB is seeking public comments regarding these proposed revisions until November 6, 2012. Sincerely, Lisa Scanlon, CSA 941-447-7130 www.scanlonsigningservices.com

The National Mortgage Settlement

The recent $25 billion National Mortgage Settlement is likely to have a significant impact on the entire mortgage industry as well as law firms, document processing companies and notaries. For companies, the terms target the kinds of policies and practices that created the "robo-signing" assembly lines. For notaries and there supervisors, the settlement terms focus on the need to comply with state notary laws and obtain adequate training to carry out there duties. In October 2010, a coalition of state attorneys general and federal agencies launched an investigation of the financial industry following revelations the "robo-signing" affidavits were being used in foreclosure proceedings around the country. In february, five major banks reached an agreement with state and federal officials not only to pay $25 billion in relief to homeowners who were improperly foreclosed on but also to change the way they deal with mortgage documents. The terms of the settlement require banks to provide state-specific training for all empolyees who regularly prepare or execute forecloser-related documents. The banks also are required to keep records of all forclosure-related notarizations performed on there behalf. Banks who violate the reform terms can face stiff penalties (up to $5 million for repeat offenders) In the end this means we must not ignore notarial laws. Signers must personally appear before the notary with proper identification and all notarizations must adhere to state laws. Lisa Scanlon, CSA www.scanlonsigningservices.com 941-447-7130

Feds push for E-Records

One of the biggest challenges to the widespread use of electronic notarizations is the slow pace of government agencies adopting digital recordkeeping technologies.But that may soon change as the federal goverment speeds up its plan to use e-records to replace the mountains of papers. The Obama Administration recently issued a memo directing federal agencies to start using electronic technologies to replace paper options. They must submit a plan outlining there efforts to adopt digital recordkeeping technologies. As more agencies embrace electronic recording and documents, the closer we are to electronic notarizations.

More counties utilizing electronic recording.

The number of counties capable of recording documents electronically is growing across the Unitied States. In the past five years these numbers have tripled. Electronically recording documents helps speed up the recording process and is more accurate and secure. This also brings us closer to the growth and adoption of electronic notarization. The benefits of E-Recording include an improvement in data quality, a reduction in turn around time for processing documents, and a significant savings when compared to the manual process. It is beneficial to companies that process a high volume of documentation, such as title companies, banks, law firms and helps pave the way for eNotarization.