Category Archives: Seal Stories – A Notary Experience

Reverse Mortgage and Potential Elder Financial Abuse

A reverse mortgage is a loan against the equity an elder has built up in their home.   The loan is “reversed” because instead of making payments to the lender as in a traditional mortgage, the bank advances sums to the elder against the future sale of the property.  These loans allow homeowners age 62 and older to convert a portion of their home equity into loan proceeds that can be used to supplement their retirement spending.

The advances can take the form of a lump sum, a credit line, or monthly cash advances or a combination of all three.

The amount of money the elder may borrow depends on:

  • their age
  • current interest rate
  • amount of fees charged
  • and the Maximum Claim Amount (MCA), which is currently $679,650 (eff. 1/1/18) or the appraised value of the home, whichever is less.

The Reverse Mortgage becomes due when:

  • the elder dies*
  • permanently leaves the home
  • fails to maintain the property
  • fails to pay their property taxes
  • fails to pay their homeowner’s insurance.
    *If the surviving widow or widower is not on the deed, they may lose the home if they are unable to repay the debt when the Deed holder passes or leaves the home.

The vast majority of reverse mortgages are federally-insured Home Equity Conversion Mortgages (HECMs) that are backed by the Federal Housing Administration.
To ensure that the elder is informed before making the decision to take out a reverse mortgage, one of requirements of the reverse mortgage is that the homeowner receives counseling from a HUD approved counseling agency.  The reverse mortgage counselors explain how reverse mortgages work, including payment options, costs, tax implications, benefits and drawbacks.  The counseling appointment can be in person or over the phone.

While a reverse mortgage can be helpful and provide financial relief for some seniors, there is potential for elder financial abuse and exploitation.
Reverse mortgage abuse is perpetuated by financial abuse predators that seek to take advantage of elders by manipulating and misleading them into acting against their own best interests.

Often the financial abuse predators are brokers, insurance agents, tax planners, family members or caregivers.
Sometimes the financial abuse predator is selling a financial product, like an annuity, or home improvements which the elder is persuaded to pay for with a reverse mortgage.
Sometimes, it’s a family member or caregiver that is attempting to swindle the proceeds from the elder.

I once met with an elderly client for a reverse mortgage closing.  When I arrived, his caregiver met me at the door and as I introduced myself, she prompted him as he entered the room to cooperate and not give me a hard time.  Suspicious, I asked him if he knew why I was there.  He responded that I was there to “check up on him”, as if he thought I was there from Social Services.  When I asked him if he had applied for a reverse mortgage, he had no idea what I was talking about.  Turns out, his caregiver had requested it on his behalf after receiving a post card advertisement and his reverse mortgage, had it been successfully closed, would have resulted in an initial $60,000 advance.
To the caregiver’s disappointment, I adjourned the closing.  I promptly alerted the lender to the situation and I called the county’s Adult Protection Services to report the incident.

While elder abuse can take several forms: physical, psychological/emotional, neglect and financial, in Alameda County, more than 70% of reports of abuse are for alleged financial abuse.

©2018 Totally Notary All Rights Reserved

 

 

Notary Challenges—How to notarize a sleeping signer

Most mobile notarizations are prompted by a signer that is unable to come to the notary due to ambulatory limitations.  They may be ill and bedridden or just frail and elderly.  They may still live at home or be a patient in a residential care home or the hospital.  These notarizations can be problematic.  Thorough screening when scheduling is important to prevent wasted travel.  Most of the time, it’s a family member that makes the call to the notary to schedule.  Some questions to ask:

  • What document will be notarized?  Is it an Advanced Healthcare Directive?  This is important because if the patient is in a skilled nursing facility an ombudsman will need to be present when the signer executes the document.
  • Does the signer have valid photo ID?  Many of the elderly let their driver license lapse once they stop driving and do not replace it with a DMV Senior Citizen ID card.  If they do not have valid ID, two credible witnesses (unrelated to the document) would be necessary to identify the signer.
  • Do they have the physical ability to sign legibly?  Weakness and injury can affect the signer’s ability to sign in a recognizable fashion.  Sometimes the signer can only make a mark.  If that is the case, two witnesses (unrelated to the document) would need to be available to watch the signer execute the mark.
  • Do they have an awareness and willingness to sign the document?
    If the signer lacks the capacity to understand what they are signing, the notarization cannot proceed.
  • Are they taking medications that might impair their ability to understand what they are signing?  Are they taking narcotics or sedatives?  If they are, it is important that they do not take the medications prior to the notary meeting.

Despite the best made plans and attempts to pre-screen the signer, things don’t always go as planned.

I was scheduled by the spouse to meet with her bedridden husband, a resident of a residential care home, to notarize a General Durable Power of Attorney.  Despite careful screening, the first words out of her mouth after the introduction were, “They gave him something and he’s sleeping.  I’ll need to wake him up.”

Needless to say, the signing was ajourned.

The best laid plans of mice and notaries often go awry, despite best intentions.

©2017 Totally Notary All Rights Reserved

To Fingerprint or Not To Fingerprint…

I’ve executed over 17, 000 notarizations since I became a notary in 2012 and I established a policy from the beginning to obtain a thumbprint for every notarization, regardless the nature of the document.  It’s a great fraud deterrent and positively identifies the signer.  From my perspective, it provides protection for both the signer and the notary.
I have had only one individual refuse to submit a thumbprint.

In CA, if the document affects the transfer of real property or is a Power of Attorney document, the notary is required to obtain a thumbprint.
It isn’t required for other documents, but is recommended by the National Notary Association:

“It is a strong deterrent to forgery, as it represents absolute proof of the signer’s identity and proves the signer was present before the Notary.”

In 1996, CA passed the following law, California Government Code 8206 (a)(2)(G):
“If the document to be notarized is a deed, quitclaim deed, deed of trust, or other document affecting real property, or a power of attorney document, the notary public shall require the party signing the document to place his or her right thumbprint in the journal. If the right thumbprint is not available, then the notary shall have the party use his or her left thumb, or any available finger and shall so indicate in the journal. If the party signing the document is physically unable to provide a thumbprint or fingerprint, the notary shall so indicate in the journal and shall also provide an explanation of that physical condition. This paragraph shall not apply to a trustee’s deed resulting from a decree of foreclosure or a nonjudicial foreclosure pursuant to Section 2924 of the Civil Code, nor to a deed of reconveyance”

In the case of my reluctant thumbprint client, the document in question was not a deed or POA.  After I diligently recorded his full name, address, driver license number and date of birth in my journal, he expressed he was uncomfortable with giving his thumbprint, citing concerns of identity theft.

The client had complied with all the laws that govern notarization and his refusal to give a thumprint was not legal cause to refuse him service.  If his document had required it, however, I would have been unable to proceed.

Because I feel it demonstrates due diligence on my part and provides positive proof of the signer’s identity, which is a powerful fraud deterrent, I will continue to request thumbprints when I perform notarizations.  I’m confident that the majority of my clients will comply.

 ©2015 Totally Notary All Rights Reserved

Help! I’ve lost my notarized document. Does the notary have a copy?

Most documents that need notarization are important and many should be stored securely after they have been executed.

I once received a call from a man in an absolute panic.  He was in the middle of a messy domestic dispute and his former girlfriend had left with his power of attorney document.  He was desperately calling every notary in the area that might have notarized it the previous summer. He was hoping the notary had retained a copy.  Unfortunately for him, notaries do not retain copies of the documents they execute.  We do maintain detailed records related to the notarization, but that wouldn’t have been much help in this case.

According to financial experts, important documents like wills, trusts and powers of attorney should be stored in a secure location, like a safe-deposit box.  A copy should be given to the attorney or executor of the estate and an extra copy should be kept at home for ease of reference.

For more information on how long to keep specific documents or where to store them, click here.

©2015 Totally Notary All Rights Reserved

Surprise! It’s a party and you’re the guest of honor

As a mobile notary, I often travel to the homes of clients to notarize their real estate documents or estate planning trusts.

This particular day, I was returning to a trust client’s home for a quick grant deed notarization.  I had met with the client the previous week, but the document had been missing a critical page. The estate planning firm had emailed the page to the client and it was now ready for notarization.

Imagine my surprise when I arrived and realized that the client had invited a friend and his wife to join us who needed three grant deeds notarized as well!

I was happy to assist them and fortunately I didn’t have any time constraints.  I notarized my client’s deed and then reviewed his friend’s documents.
Rather than have an attorney draft his grant deeds, the friend had used one of his own existing deeds as a template and created the documents in Microsoft Word.
Unknowingly, he had made a few errors when preparing the notarial acknowledgments:

In California, a notarial acknowledgment has the following format:

State of California
County of  _______________ (where the notarization is taking place)

On  _______(date) before me, ___________(notary’s name), Notary Public, personally appeared ____________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.  I certify under Penalty of Perjury under the laws of the State of California that the foregoing paragraph is true and correct.
Witness My Hand and Official Seal

  • First, he had pre-populated the county fields based on where the properties were located, not where the notarization was occurring.
  • Second, he also eliminated the gender specific and singular pronoun options in the verbiage which didn’t apply in his situation.  In California, the Certificate of Acknowledgment form must have prescribed verbiage which includes gender and pronoun options.  The notary is responsible for making the determinations and crossing out those options that do not apply.
  • Lastly, there were two spelling errors in the notarial verbiage.

As the documents had been created in Word, the friend was able to have someone at his home email them over to him so he could edit them and reprint.

The quick notarization I had anticipated finally concluded an hour later.  The clients were happy with the service and I’m confident that their documents will be recorded successfully.

©2014 Totally Notary All Rights Reserved