Nearly 2% of all homes at risk. Wonderful Wayne County is up over 40% with 41,000 filings. What county am I in you ask? Um, that would be Wayne County. Happy, happy, joy, joy.
The Detroit News has been filled with bad news after bad news for metro homeowners.
Lax oversight spurs foreclosures - Michigan employs only 12 examiners to monitor 2,800 mortgage companies (six until this year) compared to 42 bank examiners Michigan employs to keep an eye on 136 banks (yet, brokers have complained that HR 3915 puts undue regulations and scrutiny on them). There are an estimated 30,000 loan officers in Michigan, with absolutely no requirement for training, licensing or monitoring. And Michigan is one of 12 states that requires no background check whatsoever. With no licensing of loan officers, the state has little means to monitor mortgage originators, and those who defraud borrowers or lenders are rarely caught.
Mortgage fraud gets attention too late - Laure Berman of the Detroit News talks about the mortgage boom, where everybody was happy, and politicians and law enforcers closed their eyes. As she states, "words like 'regulation' and 'licensing' had become as fashionable as 'taxes' in Michigan, and in that vacuum, opportunities for cons abounded." But now that southeastern Michigan is a haven for foreclosures, fraud, and mortgage irregularities, everybody is looking now (yes, everyone IS looking).
Michigan sixth in October foreclosures - one filing for every 334 households, behind only Nevada, California, Florida, Ohio and Georgia. And in Wayne County, that number is one for every 131 households. Yikes.
Foreclosure forum to be held in Detroit - Michigan Attorney General Mike Cox has set up a forum, to be held Dec. 13 at Cobo Center, that will bring 18 lenders together to field questions and talk about strategies to avoid foreclosure. 30,000 homeowners were chosen (all are at least one to three months behind in their mortgage payments) and will be invited to the forum.
An interesting question was posed today about what is considered a conflict of interest when notarizing a signature. The following is an excerpt from Michigan's Notary Public Act (In Michigan, you can not notarize for family members. I'm told that some states do allow this as long as there is no conflict of interest):
A notary public shall not perform any notarial act in connection with a transaction if the notary public has a conflict of interest. As used in this subsection, "conflict of interest" means either or both of the following:
- The notary public has a direct financial or beneficial interest, other than the notary public fee, in the transaction.
- The notary public is named, individually, as a grantor, grantee, mortgagor, mortgagee, trustor, trustee, beneficiary, vendor, vendee, lessor, or lessee or as a party in some other capacity to the transaction.
- A notary public shall not perform a notarial act for a spouse, lineal ancestor, lineal descendant, or sibling including in-laws, steps, or half-relatives.
What the statute DOESN'T cover is a situation where a legal conflict may not exist, but may still have the appearance of impropriety. Even the slightest appearance of a conflict (notarizing for a friend, boyfriend/girlfriend, co-worker) could draw a notary into an undesirable situation. Brenda Stone of TexNotary has a wonderful way with words. Here are her (unofficial) rules when notarizing for friends/family:
- If you have even the slightest blush of concern about conflict of interest, don't do it.
- If you have to ask a notary board--you are already conflicted, it's not worth it, don't do it.
- If there are two sides to "the story", don't do it.
- If the sight or mention of your name will tick someone off who MAY see the document later, don't do it.
- If you have to bend the rules even ever-so slightly, don't do it.
- If the person is always in some kind of dysfunctional mess, don't do it.
- If they often get crossways with others, don't do it.
- Getting a notary is cheap. Pay a few bucks now to save yourself a ton of worry later. Just remember, Murphy's Notary Law States: No notary's good deed goes unpunished. EVER.
I love this career. I find it extremely rewarding. But there are times when notaries are drawn into very unpleasant situations. Last night was one of those situations. I was called to travel to a hospital to notarize a signature on a power of attorney for a man that I was told was gravely ill and had only hours to live. I was told that the individual was able to sign and that he was conscious and aware. After arriving, I was then informed that he was not physically able to sign. What to do next? In Michigan, a notary public can sign the name of a person whose physical limitations prevent them from signing or making a mark. Per 55.293, section 33 of the Michigan Notary Public Act, a notary public must be directed orally, verbally, physically, or through electronic or mechanical means provided by the individual to sign that person's name. The person must be in the physical presence of the notary public. Beneath the signature, the notary public inscribes the following: “Signature affixed pursuant to section 33 of the Michigan notary public act.”
Unfortunately, once I was taken to the room it was very clear that the individual was not aware or alert, and could in no way direct me to sign on their behalf. As difficult as it was, my only reasonable action was to decline.
As a notary public, this kind of situation is not uncommon. I would encourage everyone to know what their state allows in the event that an individual is physically unable to sign on their own behalf.
Metro Detroit homeowners pay higher interest rates, have more subprime loans, and have the highest foreclosure rate of any other area in the country. 55% of loans in 2006 were subprime, and Metro Detroiters pay double the national average. And in Wayne County, two out of three loans were subprime.
This is one of the first things a notary should learn, but it still seems to cause confusion. Even the Secretary of State has problems getting it right (see the comment on the Certified True Copy post). So it seems a good time for a basic refresher. A notarial act requires one of two types of wording, either a jurat or an acknowledgement.
A jurat is required when a signer is swearing to the content of the document. A notary attests that the signer personally appeared before them, was given an oath or affirmation by the notary swearing to the truthfulness of the document, and signed the document in the notary's presence. An example of this kind of wording is "Subscribed and sworn to by ______ before me on the _____ day of ___."
An acknowledgment is used to confirm the identity of the document signer and acknowledge that they signed the document. They are not swearing to the truthfulness or validity of any statement. An example is "Acknowledged by ______ before me on the ____ day of ____." Per the Michigan Secretary of State, a signer is not required to sign the document in the presence of a notary. They must, however, personally appear in front of the notary to confirm their signature.
Although it is important to know the difference, it is not up to the notary to determine the correct wording.
Notaries are sometimes requested by individuals to certify a copy of a document as a true copy of the original (As I was yesterday). Some states do allow a notary to perform this function (see below), but not Michigan. A Michigan notary can only acknowledge the signature of the person making the original or certified true copy statement on the document. Per the Michigan Secretary of State, in this situation an individual can print or type: "this is a true copy of my _____ " (list type of document) directly on the document. The notary would then notarize the signature. Otherwise, only the issuer of the document (ex: Secretary of State for a driver's license, a university for school records, etc.) can certify a true copy of an original.
The U.S. State Department compiled a list in 2005 (found on Wikipedia) indicating which states are allowed to certify copies and under what circumstances.
The Wayne County Register of Deeds made national headlines last year. Not the good kind. Title companies complained that Wayne County had a gap of up to six months between when a document was filed at the county office and when it was available to someone searching land records by computer. Although the office denied the length of the backlog alleged in the federal lawsuit filed by seven land title companies, Bernard Youngblood of the Register of Deeds office announced that the backlog has been eliminated. The county claims that documents are now registered within minutes, and mailed documents are registered the next day.
Despite the fact that most states have set limits on prepayment penalties (1% for three year in Michigan), you've probably seen the occasional loan that has a penalty above and beyond this limit. I've asked several knowledgeable people in the industry how this can occur, but I've never received a clear answer. Until now. In an article published in the Detroit Free Press on 07/22/07, Real Estate expert Ilyce Glink explains that federally chartered lenders are permitted to circumvent state limits. This applies to "any lender that has established its charter as a federal savings bank or under federal law." For more information, you can visit Ilyce's website:
http://www.thinkglink.com/Prepayment_Penalties_Persist.htm
