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There Is No RIGHT Way to DO the WRONG Thing! 2009.pdfThere Is No RIGHT Way to DO the WRONG Thing! By Lisa A. Tyler National Escrow Administrator Fraud Insights Quiz Our monthly Fraud

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Page 1: There Is No RIGHT Way to DO the WRONG Thing! 2009.pdfThere Is No RIGHT Way to DO the WRONG Thing! By Lisa A. Tyler National Escrow Administrator Fraud Insights Quiz Our monthly Fraud

This month’s contributing author is Diana Williams, corporate escrow administrator. She has contributed two stories about notaries; “Never Buckle Under Pressure” and “There Is No RIGHT Way to DO the WRONG Thing!” Both stories involve mobile notary companies which appeared on the Company’s approved notary list. These individuals were willing to risk their relationship with our Company and their notary commission. Both notaries back-dated loan documents and one was even willing to notarize a document where the signers did not personally appear in front of her.

These were FNF approved mobile notary companies, which begs thequestion:Whatkindoftrainingandscreeningdotheseoutsidecompaniesmake their notaries go through? Heck, it makes one wonder if thesenotaries even knew what they did was wrong. Just because a companyorindividualisshownonourapprovedlistdoesn’trepresentwhatkindofscreeningprocessorexperience leveltheyhave.Reviewthe“NotaryDo’sandDon’ts” article for somebasic tips on performing notorial duties andselectingBancServasyourmobilenotaryprovider.

Asyouwill learn inthiseditionofFraud Insights, ifaCompanyapprovednotaryisselectedinsteadofBancServ,itistheemployee’sresponsibilitytomakesuretheapprovednotaryhasnotbeenremovedfromtheapprovedlist before scheduling each and every signing. Approved notaries areregularlyremovedfromthelistforexpirationofcommission;expirationoferrorsandomissionscoverageandforactsofmisconduct.

There Is No RIGHT Way to DO the WRONG Thing!

ByLisaA.TylerNational Escrow Administrator Fraud Insights Quiz

OurmonthlyFraud Insightsquizhasbeenahugesuccess!Thankstoallofyouwhohaveparticipated.RatherthanpublishtheanswersfromtheSeptember2009quiz,we’vepublishedthenamesoflastmonth’sgiftcardwinners:

• Erica Tutor from Lawyers Title Insurance Company inAmarillo,Texas

•Donna L. Lee from Ticor Title Company in Tampa,Fla.

• Eric Taylor from Chicago Title Company in Washington,DC

The Fraud Insights quizzes test your retention of theinformation learned in this and previous editions.Remember, all previous editions of Fraud Insights canbe accessed at the Company’s intranet under InternalPublications.

FNFassociatescanparticipateinthismonth’squizbytypingthelinkbelowintotheirWebbrowsertoviewandanswerthismonth’squizquestions:http://fraudquiz.fnf.com

AllquizentrieswillbeenteredtowinaStarbucks®giftcard.

Never Buckle Under PressureWhen a loan package was returned from a Companyapproved mobile notary, the escrow officer began toreviewittoensurethedocumentswereexecutedproperlywhen she noticed the documents were back-dated.She contacted the notary who admitted she buckledunder the pressure of themortgage broker and allowedthe documents to be back-dated by the borrower, inher presence, and notarized them as such. Sadly, theunacceptablenotaryconductdidn’tstopthere.

There Is No RIGHT Way to DO the WRONG Thing!Our lender customers expect the settlement agent toensure documents are delivered and executed by theborrower in accordance with Regulation Z. If we selectan outside notary to conduct the loan signing, thatliabilitydoesnotgoaway.Itisneveracceptabletoallowdocumentstobeback-dated.

Notary Do’s and Don’tsTwo of the very basic don’ts were committed in thisedition’s two stories. Although the notary statutes varyfromone state to another there are still someuniversalnotarydo’sanddon’tswhichmustbefollowed.

volume4issue10October2009

www.fnf.com [email protected]

Fraud Insights is published by Fidelity National Financial

We want your story ideas, photos and suggestionsphone: 949.622.4425e-mail: [email protected]

Editor: Lisa A. TylerNational Escrow Administrator

Inside This Issue

Page 2: There Is No RIGHT Way to DO the WRONG Thing! 2009.pdfThere Is No RIGHT Way to DO the WRONG Thing! By Lisa A. Tyler National Escrow Administrator Fraud Insights Quiz Our monthly Fraud

Never Buckle Under Pressure

volume4issue10October2009

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 acceptablepractice.SharronK.BurgumfromTicorTitle InsuranceCompanyinPortland,Ore. certainlyunderstands this.Sharronscheduledasigningthroughoneofourapprovednotarycompanies,FlexClosingCorp. The signingwas scheduled for the evening ofWednesday,August26,2009, the lastday thedocumentscouldbesigned inorderforthefundingtooccuronthelastdayofthemonth.

Thedocumentsweree-mailedtothenotarytoolateforhertomakethescheduled6:30pmappointment. She immediately called theborrowerstoinformthemsheneededtimetoprintthedocumentsandtheappointmentwasrescheduledfor8:00pm.Onherwaytothesigningtheborrowerscalledtosayitwastoolate,theywantedto re-schedule their signing for the next morning. The notary’scompanyinformedSharron.

Whenthemortgagebrokerfoundouttheborrowersdidnotsign,hewasfurious.Hemadearrangementstoattendthesigninginthemorning.Atthesigninghepressuredtheborrowersandthenotaryto date the documents as if theywere signed the previous day.After thedocumentswere all signedandnotarizedheoffered tohanddeliverthedocumentstoSharron.

Upon receipt of the loan documents Sharron began to reviewthem to ensure they were executed properly, that’s when shenoticedthedate.Sharroncontactedthenotarywhoadmittedshebuckledunderthepressureofthemortgagebrokerandallowedthedocumentstobeback-datedbytheborrowerinherpresenceandnotarizedthemassuch.

Sharronimmediatelyreportedtheincidenttohermanager,JeanneAyala. Jeanne contacted the National Escrow Administrationdepartmentandaplanwas formed.Sharronworked to setupanewsigningappointmentwithadifferentnotaryandtheNationalEscrowAdministrationcontactedthemobilenotarycompany,FlexClosingCorp.

Jeanne confronted the mortgage broker and informed him theborrowers would have to re-sign the loan documents. She alsoexplainedtohimtheCompanychosetonolongerworkwithhim.Inthemeantimethelockexpired,andthebrokerhadtore-locktheloanattheirexpense.Itturnedouttobeanexpensivelesson.

The samemobile notary company selected a different notary tomeet with the borrowers to sign a new set of loan documents.At the subsequent signinga fewmoreerrorsoccurred.Thedateinserted,whichrepresentedtheexpirationoftherescissionperiod,wasincorrect.Itreflectedanexpirationdateoffourdaysout,not

three,andthehusbandfailedtosigntheNoticeofRighttoCancel.Additionally, theErrorsandOmissions formwasnotexecutedbyeitherborrower.ThenotaryattemptedtocontacttheborrowerstohavetheNoticeofRighttoCancelcorrectedandinitialed(withthelender’sconsent)andexecutetheErrorsandOmissionsformwhichalsoneededtobenotarized.

Thewifetoldthenotaryherhusbandhadleftforahuntingtrip.Thenotaryexplainedtheformswouldhavetobeinitialedandsignedortheirloanwouldnotbeabletofundontime.Thewifeaskedthenotarytoe-mailtheformstoherandshewoulddriveitouttoherhusband.

Thenotarye-mailedtheformstothewife.Thewifee-mailedtheexecutedandinitialedNoticeofRighttoCancelbacktothenotary.ItappearedtheNoticewasforgedbythewifesincethesignaturedidnotmatchanyoftheotherdocumentssignedbythehusbandwhileappearingextremelysimilartothewife’ssignature.Theotherform,which had to be signed AND notarized,was not returned.Wasthenotaryplanningonviolatingthecardinalsinofnotarizationbynotwitnessing thesigningof thedocument?Even if the formwasreturnedthenotarywouldnotbeabletolegitimatelynotarizeitsincethesignersdidnotpersonallyappearinfrontofherasitrelated to this particular form.The rules of notarizationapply toeachandeveryformindividually.

Sharron took the matter into her own hands and had theremaining twodocumentsexecutedandnotarizedproperly.Shewasabletofundanddisburseherfile.ThankgoodnessSharronwasalertandcarefullyreviewedthe loandocuments.Thisstorycouldhavehadamuchworseandcostlyending.Notonlywasthemortgagebrokeradvisedwechose tono longerworkwithhim,but the approved notary company, FlexClosingCorp.,was alsoremovedfromtheCompanylistofapprovednotaries.

It was Sharron’s diligence that proved why the first and mostimportantoptionofDocumentExecutionGuidelinesistohavethedocumentexecutedinthepresenceofoneofouremployees.FNFsettlement agents knowback-dating documents is unacceptableandSharrondidnotturnablindeyetothisunacceptablepracticein her file. For her efforts she is being rewarded $1,000 and aletterofrecognitiononbehalfoftheCompany.

Page 3: There Is No RIGHT Way to DO the WRONG Thing! 2009.pdfThere Is No RIGHT Way to DO the WRONG Thing! By Lisa A. Tyler National Escrow Administrator Fraud Insights Quiz Our monthly Fraud

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.

JillMason,EscrowOfficerwithourChicagoTitleOfficeinSalinas,Calif. was very clear with the loan processor from the verybeginning.Back-datingtheloandocumentswasagainstthelaw.Readthee-mailchainbelowforallthedetails.

Loan Processor:Did theborrower signdocs today?Otherwisewewouldhave tofind a notary that is willing to back-date. We have to fund byFridaytomakethelock.

Jill Mason:Notaries do NOT back-date. If he signs today it can fund andrecordonMonday,thelastdayofthemonth.

Loan Processor:Wehaveanotarycompany thatwilldo that.Wecannotextendthe lock because it will costmy broker toomuchmoney. Iwillsendyouthenotary’scompanyinfosoon.PleasehavethesedocssentouttodaysowecanfundonFriday.

Jill Mason:Youareinluck,thatsigningcompanyisaFNFapprovednotary.Iwillnotaskanyonetoback-datenorwillIbeapartofback-datingasitisagainstthelaw.

Loan Processor (to the signing company):Pleasefindattachedarequestforanewsigning.Wewouldneedanotarythatiswillingtoback-datetoyesterdaysincewehavetofundonFridayduetolockexpiration.Iunderstandyoushouldbeabletoassistuswiththat.PleaseletmeknowifyouhaveanyoneandI’llgetescrowtosendyouthedocs.

Owner of signing company:Oknoproblem.Wewillgetsetupnow.Thanksforthesigning.

Scheduler of signing company: Justanupdate–Ihavenotarieswillingtogetthesigningdonetodaybutnooneiswillingtoback-datebecausetheydon’twantto lose their notary commission. I will continue to try and findsomeonetoback-date.

Loan processor:Thankyou,pleasekeepmeposted.

Scheduler of signing company:I have a notary willing to back-date but he is asking for anadditional$30.00andhewillneeddocumentsASAP.Letmeknow.

Loan processor:That’sfine.Pleaseproceed.Nicework!

Scheduler of signing company:Pleasesend thedocuments tohimASAP.

Loan Processor (to Jill Mason):Pleasesendthedocstothenotaryassoonasyoucan.

Jill Mason:Okay,willdo!

Jill Mason:Please be advised we cannotaccept the loan documents signedand dated for August 24, 2009as we have knowledge they havebeen back-dated. I’ve contactedthe borrowers who will be in myoffice todayat3:15 to re-sign thedocuments with a date of today.Should you have any questions,please contact my manager,CarolynWylie.

As unbelievable as the aboveconversationseems, itwasprintedverbatim from a chain of e-mails.National Escrow Administrationreported the incident to thefunding lender’s fraud departmentfor further investigation. Theydid not feel back-dating the loandocuments was acceptable either.Back-dating the loan documentsviolates Regulation Z of RESPAwhichclearlystateseachborrowermustbegivenathreedayrighttorescindtheir loanbeforeanyloanfundsaredisbursed.Iftheborrowerisnotgiventhreedaystherescissionperiodlastsforthreeyears.

ThismobilesigningcompanywasLoan-Closers.comandtheyhavebeenremovedasanapprovednotaryforFNF,which isashamesinceitwasanentirecompany.Therewereseveralothernotariesforthatcompanywhowouldnotconductthesigningbecauseofthe request toback-date thedocuments.Onenotary ruined theentireaccountforalltheirnotaries.

Jill’sethicswereclearfromtheverybeginning.Sheinformedtheloan processor from the start she would not participate in theback-datingofdocuments.TheloanprocessorcalledherbluffandintheenditwasJill’shigheststandardofconductwhichprevailed.For her efforts she has been rewarded $1,000 and a letter ofrecognitiononbehalfoftheCompany.

There Is No RIGHT Way to DO the WRONG Thing!

www.fnf.com

Page 4: There Is No RIGHT Way to DO the WRONG Thing! 2009.pdfThere Is No RIGHT Way to DO the WRONG Thing! By Lisa A. Tyler National Escrow Administrator Fraud Insights Quiz Our monthly Fraud

www.fnf.com

For client distribution, please attach business card.

Two of the very basic don’ts were committed in this edition’s two stories. Although the notary statutes vary from one state to another there are still some universal notary do’s and don’ts which must be followed.

Do’s• Requirethesignertoappearbeforeyou• Placethesignerunderoathforajurat• Positivelyidentifythesigner• CarefullyreviewI.D.provided• Keepajournal• Protectyoursealandjournal• Knowandfollowyourstate-specificlaws

Don’t• Notarizeanythingyoudidn’twitness• Notarizeanyoneyoucan’tproperlyidentify• Notarizeanyonewhoappearstobeunderduress, undertheinfluenceorincoherent• Falsifyanotaryacknowledgmentinanyway• Notarizeadocumentthatisincomplete• Notarizeadocumentbeforeitissigned• Pre-signandsealblankjuratsandacknowledgments• Loanoutyournotarysealorjournal

TheCompanyhasitsownwhollyownedmobilenotarycompany,BancServ.BancServhasacomprehensivequalitycontrolprocesswhichincludesascreeningprocess,testandratingsystem.Theyhandle,onaverage,about5,000signingspermonth.

The informationsheetorapplicationasksthenotarytoprovidesomepersonalinformationaboutthemselvesandtheirexperiencelevel as a notary. Applicants are tested on their state-specificnotary rules, signing procedures and are even asked ethicalquestionswhichmeasuretheirlevelofhonesty.

The signing procedures section also asks candidates questionsrelatedtotheNoticeofRighttoCanceltoensuretheyunderstandthe importance of ensuring the form is completed and signedproperly. Lastly, they gather evidence proving the notary isproperlycommissionedandlicensedasrequired.

Once employed as a contract notary, BancServ continues tomonitor the notary’s performance. They solicit and gatherinformationregardingtheirtruelevelofexperienceandfeedbackontheirperformance.Ifanotarymakesamistake,BancServisactiveinresolvingtheissue.Ifanacknowledgementisreportedas missing or incorrect, BancServ asks to see a copy of thedocument in question. They carefully review the document inorder to ensure the solutionmeets the statutory requirementsandthenotaryhasanopportunitytolearnfromtheirmistake.

This checks and balances system has enabled BancServ tointerceptunreasonablerequests,suchasrequests forexecutedacknowledgements to attach to documents never included in

Notary Do’s and Don’ts

the initial document package. The results of their constantmonitoring are tracked by using a rating system for eachnotary. A notary’s rating is dependent on his/her level ofexperience and overall customer satisfaction. The databaseincludesover7,500notariesnationwide.

Lastly, BancServ customers are protected by a $15 millionErrors&OmissionPolicyanda$15millionCrimePolicy.Nooneelsecansaythat.Plus,theyarewholly-ownedbyourparentCompany, FNF.The itemsoutlinedemphasize the reason theCompanyprefersallemployeesuseBancServfortheirmobilenotaryneeds.