The Top 10 Most Common Loan Signing Errors: A Signing Agent’s Perspective
The intricate process of loan signing often requires a sharp eye and meticulous attention to detail. As a signing agent, it’s essential to ensure that every signature, date, and initial is correctly placed to facilitate a smooth loan process for all parties involved. Unfortunately, errors can and do occur. To help signing agents and their clients anticipate and avoid these common pitfalls, here is a list of the top 10 most common loan signing errors.
- Missed Signatures or Initials: One of the most common mistakes is simply overlooking a required signature or initial. This seemingly minor oversight can delay the loan process. A thorough review of every page is crucial, ensuring that every required field has been completed.
- Incorrect Dates: Dates are often critical in loan documents, particularly when it comes to legal enforceability. Incorrectly dated documents might result in ambiguity, potentially leading to legal complications down the line. Always ensure that all date fields are filled out correctly, matching the date of the signing.
- Not Following Borrower Instructions: Some borrowers may have specific instructions, such as using a middle initial or a full middle name. Failure to follow these can lead to discrepancies between the loan documents and other legal documents, potentially invalidating the loan agreement.
- Using the Wrong Notary Acknowledgment: Different states and even different loan types might require specific notary acknowledgment verbiage. Using the wrong acknowledgment can make the notarization invalid, requiring the borrower to sign again.
- Incomplete Notary Journals: A notary’s journal is a legal record of the notarial acts they’ve performed. Forgetting to log an entry, or not providing complete details, can expose the notary to liability and cause problems for the borrower.
- Mismatched Names: It’s essential to ensure that the name on the loan document matches the borrower’s identification precisely. Variations, even minor ones like ‘Mike’ instead of ‘Michael,’ can be problematic. Additionally, if a borrower has recently changed their name (e.g., due to marriage), it’s crucial to ensure that the ID and loan documents are congruent.
- Not Verifying Correct Identification: One of a notary’s primary responsibilities is to verify the identity of the signers. Accepting an expired ID or failing to ensure the photo and physical appearance match can jeopardize the validity of the notarization.
- Failing to Notice and Address Corrections: Occasionally, there may be mistakes or typos in the original loan documents. Signing agents should be vigilant in spotting these errors and ensuring they are corrected before the borrower signs.
- Not Retaining Copies: While privacy and data security are of the utmost importance, there are situations where a signing agent may need to retain copies of signed documents (while respecting relevant data privacy laws). This can be essential for resolving any discrepancies or issues that might arise later.
- Ignoring Potential Red Flags: Signing agents should be alert to potential red flags, such as signers appearing under duress or uncertain about what they’re signing. In such cases, it’s the agent’s duty to pause and address the issue, ensuring awareness for the party at whole.
BlueNotary‘s own Katie Tremulis interviews the Founder of EmClosings as to what she most often sees and hears from Title Companies, Lenders, and Buyers in regards to getting the job done and the real life consequences of their mistakes. The below video is an expansion of the above list of common loan signing mistakes.