It is extremely important to be certain that all of your documents are signed by individuals that have qualified authority - it is also equally as important to keep databases current and managed properly to ensure that every signature on your documents are legitimately authentic. Watch industry expert Myron Finley of Nationwide Title Clearing explain the pitfalls of a badly managed signing authority database in this National Mortgage News Ask the Experts video.
Each individual signer’s name should be linked to the appropriate signing authority document to prevent anything from being signed until that link is validated, to ensure that each signature is fully authorized. The linking of signer name and loan number to signing authority should be implemented with electronic controls that are accurately managed. Even with a solid computerized solution in place, you should also have trained specialists looking at each signature to catch any errors.
Signing errors can have dire consequences. The federal government requires that mortgage assignments "are executed with appropriate legal authority". This has focused industry-wide attention on the authority required to execute a document. It is imperative that your company safeguards itself regarding all signing practices by adhering to the following guidelines:
- Make certain your documents are signed by someone who possesses the proper authority.
- Use automation to link each individual signer's name to the authorizing signing authority document.
- Ensure that only signers appearing on relevant active corporate resolutions are signing.
- Execute documents only if the loan to which it relates is listed on the Power of Attorney.
- Only sign documents that utilize fully authorized electronic controls.
- Safeguard yourself by using an electronic system that is managed by specialists.
