What happens if a lender’s written instructions make you or your agency non-compliant?
We thought now would be a good time to remind you that it never hurts to spend a bit of extra time and attention on lender instructions—especially where there are penalty provisions.
As settlement agents, we are responsible to comply with written instructions, but sometimes lender instructions include items with which we cannot comply or which fall outside of the scope of our duties. This is especially true when it comes to provisions defining the penalty for non-compliance payable by WFG to the lender. If you receive lender instructions that include penalty provisions, please reach out to your local WFG Underwriting Counsel before you sign to make sure the language is appropriately changed and accepted by the lender before proceeding.
Some additional items that warrant extra scrutiny include the following situations:
1. Lender instructions which require compliance with the laws of a different state.
2. Lender instructions which claim to make the escrow holder responsible for the accuracy and content of lender documents.
3. Lender instructions which claim to make the escrow holder responsible for the actions of the notary, especially when signing services are utilized.
4. Lender instructions which claim to make the escrow holder in a refinance transaction responsible for determining whether the transaction has been rescinded or not.
5. Indemnity language that claims to make the escrow holder personally liable and responsible for items that are outside the scope of escrow duties.
We can’t emphasize this enough: always thoroughly read lender instructions! When in doubt, take a partner, or reach out to your local WFG Underwriting Counsel for assistance. http://wfgunderwriting.com/