Conducting a Loan Signing Flashcards

On a refinance transaction, which document gives the borrower the right to cancel within three business days?

Answer: Notice of Right to Cancel (NORTC)

The Notice of Right to Cancel (under TILA/Regulation Z) gives borrowers on refinance transactions three business days to rescind.

Why is it important for the NSA to verify that the borrower's name on the ID matches the name on the loan documents?

Answer: To ensure the correct person is signing the legally binding documents

Verifying ID against document names ensures the right party is executing the loan, preventing fraud and ensuring legal validity.

When should the NSA present the Promissory Note to the borrower?

Answer: After all other documents have been signed

Many NSA best practices suggest presenting the Note near the end, but it must be signed; sequencing may follow the lender's or title company's instructions.

The Deed of Trust (or Mortgage) in a loan package primarily serves to:

Answer: Pledge the property as collateral for the loan

The Deed of Trust pledges the property as security for the loan, giving the lender a lien if the borrower defaults.

An NSA notices a blank space where a date should be filled in on a document. What is the correct action?

Answer: Contact the hiring party to determine the correct date

NSAs should not fill in dates without authorization; they must contact the hiring party for the correct information.

Which form, introduced under the TRID rule, replaced the HUD-1 for most residential mortgage closings?

Answer: Closing Disclosure (CD)

The Closing Disclosure (CD), required under the TRID rule, replaced the HUD-1 for most residential mortgage transactions after October 2015.

If a borrower is visually impaired and cannot read the documents, the NSA should:

Answer: Read each document aloud and confirm the borrower understands before signing

NSAs may read documents aloud to assist borrowers with disabilities, but must still ensure the borrower signs their own documents.