Financial Disclosures in Loan Transactions

Aside from the financial disclosures which the law requires creditors to make regarding hidden charges for loans and mortgage transactions, the law also requires notarization of loan documents. A notary is an officer commissioned by the state to be a witness to transactions such as loans and wills.

A notary is a third person to a transaction between a creditor and a borrower. Some notaries public are also lawyers but in financial transactions involving real estate, notaries are independent witnesses to the transactions. This means that notaries do not legally represent the creditor or the borrower. Notaries represent the state.

What exactly do notaries do? What is their role and function?

Notaries look over the documents presented by the creditor. There is a checklist of required documents supporting the transaction such as promissory notes, a good faith estimate, insurance policies, and the loan or mortgage deeds. Notaries check that all documents are signed in their presence to ensure that the signatures are genuine.

More importantly, the notaries will ask the borrowers if they have read the documents. They will ask if the creditor has explained to them the contents of the documents. If the borrowers are represented by a private lawyer, the notary will ask if the documents have been explained by their lawyer.

The notary will ask the borrowers if they understood what was explained to them. If they affirm that they understood the contents of the document, then the notary will assist the borrowers in signing the documents. In this way, the notary can determine the genuineness of the signature of the borrowers. The notaries may ask for proof of identity of both the creditor and the borrowers if they are not personally known to the notaries. In this way, the notaries can be sure that the transaction was duly executed between the parties without fraud, duress, undue influence or pressure.

If the borrowers do not understand the transaction or if they have questions and doubts, the notaries will have to advise them to find a lawyer or talk to the creditor so that they may be clarified as to any point of doubt or confusion. The notary cannot explain the documents or its contents to the borrowers as this is not part of the notaries’ job.

The notary’s job is to be an impartial and disinterested witness to the transaction. The notaries cannot represent either party nor give them legal advice, though a Notary can explain the legal impact of the documents being signed by the borrower.

In the future, if litigation arises from the transaction, the notary will be called upon to give a testimony as to the genuineness of the documents and of the signatures of the parties. Notaries may be called upon to testify as to the identities of the parties. Notaries may also be called upon to testify as to the actions of the borrower and to the presence of informed consent.

Notaries need to be competent, experienced and efficient. For help in obtaining the services of a notary in the Brooklyn, Queens or New York City areas please send an Email or call us at 718-701-0095. Our notary is a duly licensed Attorney and Notary Public in the state of New York. She travels to jails, businesses, homes, nursing homes and hospitals. Notary and Signing Agent Services Offered: loan closings, trusts, power of Attorney, wills, sales transactions, acknowledgments, affidavits, bank forms and other legal documents.

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