Sunday, May 4, 2008

The Closing Script

There's been a lot of discussion about the proposed HUD closing script. The NNA thinks that the script constitutes UPL (unauthorized practice of law). But I've yet to see a legitimate reason explaining how reading a script word for word can be considered practicing law. The NNA also claims that the signing agent industry is being threatened by this proposal. Again, how is reading a script a threat to our existence?

That said, I think walking into a closing and reading a script, including a line by line, fee by fee comparison of the HUD and GFE (Good Faith Estimate) is impersonal, unprofessional, and probably will cause borrowers to tune out much like most of us do when a telemarketer calls and starts reading a script. Some have even suggested that we read the script over the phone BEFORE the closing. Can you imagine what the companies that hire us for their closings would think of that practice? The script can be download here:

I've commented on this in other places, so I'm just going to include some of those comments here:

I think it gets silly when you start reading every line of the HUD/GFE comparison word for word, especially where the figures are identical.

Going over this by phone? Well, maybe your in-house closers can do that, but as an independent signing agent, I know that many of the companies that hire us would feel that this is outside of our scope of duties. I don't think loan officers would appreciate us going over loan terms with their borrowers before we're even at the table. I can imagine the conversation if the terms I tell them over the phone aren't what they were expecting and they call the l.o. and tell them I called them and told them their terms before our appointment (and maybe before the l.o. had a chance to make the call that he/she was going to make to discuss the change). I can kiss that company goodbye. No way would I ever do this over the phone.

it's not the information in the script that I have a problem with. It's vital information and something that I think must be covered with the borrower. It's telling me I have to read it word or word like a sixth grader reading out loud for the class. Anyone that's ever given a speech or made a presentation (and that’s what this is, a presentation) knows you don't write out your presentation word for word. You end up sounding cold and robotic. Don’t give me a script. Give me an outline or a bullet point summary.

"The following is a summary of many important details involving the mortgage loan 123 Main St, Anywhere, U.S.A. Let's compare these important details with the Good Faith Estimate, loan documents, and other disclosures, shall we?" Come on, who talks like that? I don't. So, if instead of that gobbledygook, I say "Here are your loan terms," have I failed the borrower? Am I a bad closer? Instead of saying "read this word for bloody word," allow me to be human. I can cover everything that needs to be covered without having to sound like an infomercial spokesperson.


Brenda Stone said...


I read the script for the first time. Initially, I felt like you. But then a counter-point came to mind.

This may be the ticket to keep notaries out of the line of fire. (That is, out of the line of fire who want to see signing appointments shifted back inside of the brick/mortar title company or inside the attorney's office.)

I think this will empower the notary to have and provide the answers without stepping outside of their boundaries or not saying enough thereby becoming obsolete due to those who would have the notary licensed. With the script there is only one way to say it and here it is.

Yes, it is tedious. However, I think just like we (who wanted to be the "best" at what we do/did) all developed our own scripts this is an adaption that leaves no stone unturned and nothing left to the creative imagination of some of the uninformed notaries who have made this script necessary.

Again, tedious? Yes. But possibly the means to save the signing agent.

Alex Y. said...

For the most part, I don't disagree with you. For me it's not about the substance of the script as much as it's about the format. I'd much rather see something like this:

Interest rate _______
Loan Amount _________
Payoff ________
Cash out __________
Three Day Recession __Yes___
Cash to borrower ________

Borrower has had these figures disclosed to them and agrees with these terms, etc, etc

Instead of pulling out a piece of paper and reading "Good evening Mr. and Mrs. Borrower. The following is a summary of many important details la la la la la..."

People like us who care about being the best already have a presentation that does this. Turning us into script readers dehumanizes the closing. There's an emotional element to this for the borrower. It's not just the terms and numbers, it's about how they feel during the whole process.

People who don't care about anything but showing the borrower where to sign, well this script won't change them a bit. They'll still find a way to just shove it in front of the borrower and tell them to sign.

Adding more forms always seems to be the mortgage industries solution to a problem. How many more places do we need to show the terms? It doesn't clarify anything, it just makes thing more overwhelming. I've been told that a Canadian loan package is about 10 -15 pages (I don't know this for certain as I've never seen one, but I've heard this multiple times). Yet, they don't have the crisis we do. Just the opposite, their mortgage industry is booming.

Anonymous said...

Interesting, I'd like to learn more about the Canadian industry ... but back to this topic, I'm pasting my opinion as posted elsewhere, since at this point I only have one opinion =):

I love the general ideas presented with the Closing Script, and for the most part am excited about the potential for the consequential improvements specific to the topic of mobile closings. This might prove to be the tool needed that separates those of us who serve as ‘mobile closers’ or independent, ‘courtesy’ closers – and those who serve strictly as notary publics (the ‘point & sign’ camp). I absolutely believe that separation needs to be made, as the differences between the two carries significant impact on the consumer.

When The Great Meltdown first started, I was baffled and really refused to believe the loud consumer complaint that they “…didn’t know” [insert some pertinent part of their mortgage loan]. I have since come to realize that for many people, it really was quite believable that they truly did not know the terms they were agreeing to.

There is no reliable, clear distinction between the two vastly different services provided (a ‘mobile closer’ and a notary public ‘point & sign’) – a problem for another day’s discussion – but as we know, a considerable amount of mortgage loans are closed using those services. The past several years have seen a massive swelling of the ranks of this industry – no doubt due to the vast marketing efforts of the NNA.

It is the NNA that claims to create a ‘signing agent’ out of a notary public in 6-8 hours, arms them with a “No Can Do” book that bolsters the whole paradigm of “I am just a notary, I can only point to the signature line and ask you to sign, please don’t ask me any questions.” It is the NNA that is now stating the Closing Script will present an absolute UPL situation and effectively do away with signing agents.

It is my own opinion that the NNA, with their many large industry partners and supporters, has played a significant contributing part to the The Great Meltdown. The vast army of Point & Sign notary publics that marched into the consumer’s homes with mortgage loans did not do so by any choice of the consumer, and it was completely enabling to those in the lending & title industries who were behaving … less than benevolently to the consumers.

As the saying goes – a little bit of knowledge can be a very dangerous thing. I believe these Point & Sign people were used by some of the lending industry in ways they are largely not even aware of. They provided some arm’s length, and a convenient fall guy, under the guise of being able to earn a considerable income for very little work – their primary job was to be a notary public, identify people, get ink on paper and keep their mouth shut. That really tilled up the soil and created some fertile ground for easing consumers right over the proverbial barrel, in their own living rooms.

I love the Closing Script (needs some data tweaking, perhaps), and I am of the opinion that if a person is NOT fully capable of presenting it – including the GFE/Hud line-by-line comparisons – and if a person is NOT able to provide the consumer with explanations of the terms without practicing law, then they should NOT be providing mortgage courtesy-closing services. I can see the need to have this script read VERBATIM – as that is the only way to eliminate the potential for spin. It standardizes the closing process, and eventually that standardization will become familiar to consumers. That will take years – but the familiarization will further hamper the Spin factor.

I know we're both the same ‘type’ of mobile closer, and I can’t disagree that the Script is hokey enough that it makes us feel less polished than we prefer to present ourselves as. But that’s small potatoes compared to the need it fills and the improvements it will bring. Presenting the same information in ‘chart’ form, minus the specific verbiage – well, that’s what the source documents were doing all along, right? The Hud, the GFE, the TIL, the Note … all those documents have always been there, they’ve always provided the data being presented in the Closing Script – the problem was the Spin, and/or the lack of EXPLAINING (oohhh bad word, per the NNA, notary publics are prohibited by law from “explaining”!).

I ask this question – who benefits, when the ‘closer’ can’t speak?

The way the UPL Monster is talked about, it almost cuts into the Freedom of Speech! I don’t find the line before entering UPL territory to be so difficult to see, but I also do not view it as so all-encompassing of my rights as a trained, experienced and skilled courtesy closer to give consumers the clearly disclosed mortgage closing that is THEIR right, that does not and SHOULD not demand arbitrary legal representation, and I know this – no borrower that I ever closed for is one now saying “…we didn’t know.”

Alex Y. said...

Always the optimist you are. I hope you're right and the script saves us all and feeds the hungry and brings world peace. In my opinion, it's another example of a well intended idea that sounded great in a conference room but will fail miserably when applied in the real world (think e-closings).

Anonymous said...

I'm not seeing the comparison of the Script to e-Signings, Alex - that's like apples to peanut butter.

I know there must be an agenda behind the NNA's proclamation that it is UPL to "explain a document", sending the Army Ants into a frenzy and asking for them to 'defend their livelihood' against RESPA - but I have yet to figure it out. Could it be that the answer lies in the reform's demand that the Script be read AND questions about "terms and conditions" be answered? Could it be the NNA isn't training the Army anything ABOUT terms and conditions, and that those are listed in the "No Can Do" bible?

Is the "Point & Sign" pseudo-closing going to fall by the wayside?

Is it possible that a mobile closer will absolutely NEED greater knowledge and skill to perform this service?

Is it possible that those who find $40 'easy money to make' will become a moot problem for both the consumer, and the skilled mobile closer?

Alex Y. said...

The NNA stance is a head scratcher to me. I may not be thrilled about the script and I may not see it as the savior that some do, but it's certainly not a threat to the signing agent. There's a dollar angle here somewhere.

Apples & peanut butter, Mmmmmmmm.