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Source of Title Blog

A Suspicious Acknowledgment
by Robert Franco | 2009/04/13 |

In Ohio, documents used require both an acknowledgment by a notary and two witnesses.  There were a lot of cases where the witnesses weren't actually present when the documents were executed.  Often times, a notary signing agent would go to the borrowers' homes and the documents were returned to the office where someone there would add the witnesses signatures.  It didn't take long for the bankruptcy trustees to catch on and they were able to set aside mortgages that were not properly executed.

In response, the Ohio legislature changed the law - now, only the notary is required, no witnesses are needed.  This was probably the result of real estate, mortgage and title industry lobbying efforts.  But, I wonder now if even this lax standard is being properly followed.  I came across a document that set off warning bells.

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The document is a "Regulatory Agreement" that was executed in connection with a $7.3 million mortgage.  There were two parties required to sign the agreement and each signature needed to be notarized.  The signatures were both on page four, and page five contained both acknowledgment clauses.  The first signature was notarized on page five and the second clause was left blank. Another page, a copy of page five, was attached with the second signature notarized in the second clause and the first was left blank.

Both acknowledgement clauses were properly completed, signed and stamped with the notary's seal. But, it really made me wonder why both parties were able to sign the same page, yet the notaries used two different pages for their acknowledgements. 

I could understand if both parties were in different locations and they each signed a separate page, properly notarized.  However, in this case, it appears that both parties were able to sign the same physical page, which leads me to believe that the same acknowledgement page could have been used.  So why wasn't it?

Perhaps there was a good reason for this, but the obvious conclusion is that one of the notaries wasn't actually present when the document was executed.  That, of course, is just speculation.  On their face, each acknowledgement clause is properly executed, but the manner in which it was done raises some doubt that both notaries were actually present when the parties signed.

A bankruptcy trustee would certainly notice this anomaly and could try to use it to have the document invalidated for failure to comply with the execution requirements.  The trustee would simply ask the debtor if he signed in the presence of the notary.

Certainly, the change in the law - eliminating the requirement for witnesses - has made it much easier to get documents executed.  Still, there is a potential for abuse.  And, without the witnesses, it may actually be easier to get away with it.  If there were still a requirement for witnesses, there would be two more people to testify that the parties, the notaries, and the witnesses were all present when the document was executed.

As I said, there may not be anything wrong with this document.  But, the circumstances do raise some suspicion that the acknowledgement was improper.

Robert A. Franco


Categories: Attorneys, Ethics, Notaries Public, Title Industry

732 words | 6114 views | 2 comments | log in or register to post a comment

Huh? Why are signature pages and notarization blocks on separate pages?

"...if both parties were in different locations and they each signed a separate page ... the manner in which it was done raises some doubt that both notaries were actually present when the parties signed."

Backroom drafting observations:  Often the drafter of the document hasn't a clue whether all parties will sign in the same place at the same time.  In an attempt  to "get it right the first time" on the part of the signers / witnesses / notaries, the document will be drafted using the assumption that none of the parties will be in the same place at the same time ... and possibly the same state.  It's a sign-and-pass-along document. A document executed in Connecticut, Florida and California is a perfect example.  I KNOW what the Conn. notarization block should look like, but California is an ever-changing, PIA notarization block state.  Solution:  All parties sign on the same signature page; however, the notarization blocks are on separate pages (particularly if our Conn. signer suddenly needs his secretary to forward the document to St. Croix for signing and notarization). Florida, we prepare, but if the notary doesn't believe it is acceptable; the notary attaches his/her own form. In the case of California, we "surrender" and include instructions to "have the California notary prepare and attach the acknowledgment block".  In a perfect world, we get multi-party documents signed in different locations with correct witness requirements and notarizations (or a few extra witnesses [better too many than not enough]).  We used to try using the sign here /notarization block for that signer, sign here/ notarization block for that signer. Result:  a lot of crossed out, messed up signature pages, notarization blocks, and "see attached".  Warped humor:  It's amazing how often the notary completed the wrong notarization block; i.e., started to edit the block at the bottom of the page before realizing there was a prepared, correct block on the same page half way up.

Your document could have been signed on the same page at different times that day within the same county and notary #1 photocopied the notarization block page for notary #2 before completing his/her portion (thinking if #2 messes this up, I don't want to have to re-do MY notarization); hence the same notarization page copied.  Or, in the case of some Really Large corporations I used to deal with. The bosses were on different floors ... and each used their own personal secretary/notary with their own individual notarization block page.  (I always wondered if some of the lower floor Vice Presidents were even allowed, or afraid, to travel up to the Top floor, never mind use the President's notary.  The document was allowed to travel the top floor, but not the other signers. No joke: I got a tour of "the floor" by THE Private Secretary one day when all parties were out.)

Like you, I make a note when I see these abnormalities.  My favorite case to date: Deutsche Bank National Trust Company as Trustee v Marie E. Gue (Bridgeport, CT).  In short, as time passes, the CT Validating Act can remedy some mistakes; such as a lack of witnesses or an improper notarization block.  It doesn't valid or cure fraud; i.e., someone signing the document as a witness when s/he hasn't actually witnesssed the signature of the maker of the document.

by Bobbi Shorthouse, Notary Public | 2009/04/14 | log in or register to post a reply

This is not uncommon

First of all, you don't indicate whether the venue and dates are the same on both notarizations. Even if they are, you can't tell whether both signatures (and the accompanying acknowledgments) were done at the same time. It's not unusual for documents to be signed by both parties at different times; I see that often in my work as a notary. It may just be that  Notary B decided to add a second acknowledgment page rather than make it appear that there were two notaries in the room. I wouldn't have done it this way, but there's nothing wrong with it - the notary has control of the notarial block.

The only way to know for sure would be to to subpoena the notary journals (if it's in a state that requires the notary to keep one), or subpoena the notaries.



by Michael Coticchio | 2009/04/20 | log in or register to post a reply
Source of Title Blog

Robert A. FrancoThe focus of this blog will be on sharing my thoughts and concerns related to the small title agents and abstractors. The industry has changed dramatically over the past ten years and I believe that we are just seeing the beginning. As the evolution continues, what will become of the many small independent title professionals who have long been the cornerstone of the industry?

Robert A. Franco



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