To some degree I would agree with you. There was a time in the not too distant past when the entire closing was left in the hands of the attorney. He was notified of the closing far enough in advance to allow him to perform a title search, and generate a title insurance commitment. The loan package was overnighted to him 24 to 48  hours in advance, allowing him sufficient time to review it and complete the HUD 1 form. The borrowers arrived at his office at a convenient time to execute the documents, and he recorded the deed and/or mortgage within 24 hours.

Under the current situation additional players have been added to the mix including the title company and possibly a signing service. The title companies are notoriously late with the completion of the documents, and by the time they land on the attorney's desk it may be only a matter of an hour or two before the scheduled closing. One of my colleagues told me that he had an experience several years ago in which the doc package was rolling through his printer during the closing.

A number of states are enacting legislation or common law (or have already done so) to restore the process to the attorneys in order to allow greater protection for the client borrower.

I would agree that there are more time constraints in transactions in which there is no right to rescind. In those instances it is incumbent on the attorney to make it clear to the lender that he needs to see the doc package sufficiently in advance to complete his review. Whether the lender complies is another matter. To date I have not had too much of a problem with that.

However, where the three day right to rescind is applicable there is sufficient time to review the doc package and advise the client in time for him to exercise his rescission rights..

It has been my experience that the lenders are a little more flexible on the "take it or leave it" issue when they want to save the deal. I have had a number of borrowers either refuse to sign the documents or exercise their right to rescind. Several days later we were at the conference table again signing amended loan documents.

I had this happen to me almost three years ago when I last refied my house. The lender tried to slide in an additional quarter point of interest in on the note at the last minute without telling me in advance. I refused to sign. During the 45 minute drive home I had no less than 4 calls from the lender waiting for me wanting to "work things out". The following week we were back at the closing table, and I got the interest rate I wanted.

The problem seems to be that borrowers are no longer bothering to seek legal advice on the matter.  Instead they are relying upon what the lenders are telling them, and are acquiescing in the take it or leave it pressure. Connecticut recently had the State Banking Commission take action against a major lender for delivering a loan product at the last minute that differed from that which the borrower expected.

It would seem that in the matter of the above referenced article it would have been a simple matter of reviewing the note, application and mortgage which would have disclosed the problem. Interest rates, adjustment change dates, default problems and collection costs are usually fairly easy to locate in these documents.

to post a reply: login - or - register