Use a Buyer’s Full Name on all Documents – Consistency is Key
Over the last several months we have had numerous closings where the Contract and the Mortgage Application do not have the identical names. This creates real issues as we approach closing. This circumstance is even more concerning where Seller documents are generated by a Servicing Company from an out of state Law Firm; typical of REO property.
Two examples:
- The purchase contract written without a Buyer/Borrower’s middle initial. Buyer/Borrower applies for a mortgage with his middle initial. We complete all our documents, including preparing the CD for the REO Servicer, consistent with the way the lender is producing documents for closing. Servicer demands that we remove Borrower’s middle initial as the middle initial is not showing on the contract. We immediately make that change. REO Servicer advises that they require two days to approve any change. Client does not close that day because REO Servicer doesn’t care. Buyer misses long weekend to move. We close Tuesday.
- Same scenario except the Buyer/Borrower applies for the mortgage with a “Jr.” after his name. No “Jr.” on the contract. REO Seller will only close as per the contract – no “Jr.” Lender agrees to change all documents to remove the “Jr.” after Borrower’s name but Borrower is unhappy because Dad has the same name and has many judgements, bad credit, etc. The Buyer/Borrower is upset.
When completing contracts, but especially for REO property, please ensure that buyer is aware that his/her deed will be offered only consistent with the contract. Similarly, when taking a Mortgage Application, please ensure that the Borrower’s name on the application exactly matches his/her name on the contract. My advice is to always utilize Buyer’s/Borrower’s full name (including middle name or middle initial, and including “Jr.” or “III”). The more exact the name the less likelihood of Buyer/Borrower being confused with others.
Consistency will make my job (and my paralegals’ job) easier, will facilitate timely closing, and will result in your and my clients having a positive real estate experience. And that will bring us all more referrals!
