Loan Signing Agent Procedures Flashcards

A loan signing for a primary residence refinance is conducted on Tuesday, September 15th. The package includes a Notice of Right to Cancel (RTC). According to federal law, what is the last day the borrower can cancel the loan?

Answer: Friday, September 18th

The TILA-mandated three-day right of rescission begins on the next business day after the signing. Business days are defined as all calendar days except Sundays and federal holidays. With a signing on Tuesday, the three business days are Wednesday (day 1), Thursday (day 2), and Friday (day 3). The right to cancel expires at midnight on the third business day.

During a loan signing, the borrower notices their middle name is misspelled on the Deed of Trust. As the Loan Signing Agent, your appropriate course of action is to:

Answer: Immediately halt the signing and contact the contracting company (lender or title company) for instructions.

Loan Signing Agents are not authorized to make or approve any changes to loan documents. If a signer discovers an error, the LSA must immediately stop and contact the contracting company that provided the documents. That company will give specific instructions on how to proceed, which may involve having the borrower make the correction, halting the signing for a document redraw, or providing other guidance. Any unauthorized alteration could void the document.

Which of the following actions is definitively OUTSIDE the scope of a Loan Signing Agent's responsibilities?

Answer: Explaining to the borrower why their property tax impound amount is higher than they expected.

Explaining or interpreting fees, loan terms, or tax amounts constitutes the Unauthorized Practice of Law (UPL) and providing financial advice. A Loan Signing Agent can guide a borrower to locate information within the documents but cannot explain the meaning or justification for that information. The borrower must be directed to their loan officer or escrow officer for such explanations.

A Loan Signing Agent is at an appointment where the Closing Disclosure (CD) shows a cash-to-close amount that the borrower disputes, stating it's incorrect based on their conversation with the loan officer. What is the LSA's proper course of action?

Answer: Stop the signing and have the borrower contact their loan officer or the title company immediately to resolve the issue.

If a signer disagrees with critical financial figures on the Closing Disclosure, the LSA must halt the signing process. It is not the LSA's role to resolve such disputes or offer advice. The borrower must contact their loan officer or the escrow officer directly to get clarification and an official resolution. Proceeding with the signing while the borrower is in disagreement would be improper and could jeopardize the loan.

The 'Statement of Information,' also known as a 'Statement of Identity,' is a common document in a loan package. What is its primary purpose?

Answer: To distinguish the borrower from other individuals with similar names, helping the title company clear potential liens or judgments.

The Statement of Information collects personal data (such as past addresses, date of birth, and employment history) to help the title company perform its due diligence. This information allows the title company to differentiate the borrower from other people with the same or a similar name who might have liens, judgments, or other legal issues on their record, thus ensuring a clear and insurable title for the property.

After completing a signing appointment and dropping the package at the courier, the Loan Signing Agent realizes they forgot to have the borrowers sign the W-9 form. What is the most professional and appropriate next step?

Answer: Immediately contact the contracting company (signing service or title company), inform them of the error, and follow their instructions.

The most professional and ethical action is to be transparent and proactive. The LSA should immediately notify the contracting company of the mistake. This allows the company to manage the situation and provide the LSA with the correct procedure for remediation, which may include returning to the borrower. Hiding the error, bypassing the client (the contracting company), or forging a signature are all serious breaches of professional conduct.