The Question:

In many legal documents, there is a section for you to sign where you declare that the document is correct to the best of your knowledge. If something small or relatively unimportant is incorrect in the document, would you sign it?

Some Context:

I'm completing a loan application where both I and my wife are joint applicants. Included in the document is a table showing our current debts, which is mostly our mortgage. The table also has a mark on each row indicating if the debt belongs to the primary applicant (me) or the "other" applicant (my wife) and then a "total", which is the sum of all the debts. For some reason, the table lists the mortgage for me, and then again for my wife, so the total is about 2x what it should be (a large sum). I informed the loan officer that this was incorrect and did not reflect the actual debt that we carry. They indicated that they cannot change it because the table is auto-populated using data pulled from our credit report and the mortgage is listed twice because both of our names are on the mortgage. Instead they countered that many people sign this and that it isn't all that important because I'm just disclosing my debt. So I offered to not sign that portion since it was so unimportant. They obviously would not allow that.

I understand that the purpose of this section was to say "hey, here's all my debts, I'm not stretching myself too thin." So if my reported debt is high and the bank is willing to give me a loan anyway, then this section of the document shouldn't matter to me. However, I don't feel comfortable signing a legal document saying "this is all correct" when I know it isn't correct. Am I being unrealistic?

  • 4
    Can you make initialed corrections in pen?
    – cpast
    Jul 31 '18 at 1:32
  • It was a digital copy and when I asked to print it, initial corrections, and bring in the altered copy, they refused. I kept pushing and they agreed to speak with their legal department. I don't know what legal said, but after that conversation, they agreed for me to visit a local branch of the bank to sign an altered version there. I knew initialed corrections in pen were common, so are they being unreasonable or should I have just let it go?
    – Joe Mac
    Jul 31 '18 at 1:39
  • 1
    This is a dishonest practice on the part of the loan officer which is really not acceptable. A lot of people did it prior to the financial crisis and then got in big trouble afterwards. It is probably worth complaining to the person's manager or even the bank VP or President. As an alternative, ask if you can attach a letter of explanation. It is very important.
    – ohwilleke
    Jul 31 '18 at 1:42
  • @ohwilleke: This seems like a different situation. There is an obvious motivation for a loan officer to make it look like the applicant has less debt than he really does, so that the bank can approve the loan and then sell it to an investor who thinks it is less risky and thus pays more. But in this case the applicants appear to have more debt than they really do, and I can't think of any dishonest motive for wanting to do that. Jul 31 '18 at 4:27
  • 1
    I should clarify that the loan officer was interpreting the document differently than me and thought I was being ridiculous or nit-picking. They use this document frequently so it made sense to him when he saw duplicates entrees. It would even make sense to me except that they sum the debt and put the total at the bottom of the column. That pretty strongly implies that the total amount is the total debt (i.e. there should not be duplicate entries). A sum at the bottom of a column is pointless if there are duplicates in the column.
    – Joe Mac
    Jul 31 '18 at 5:50

If something small or relatively unimportant is incorrect in the document, would you sign it?

if my reported debt is high and the bank is willing to give me a loan anyway, then this section of the document shouldn't matter to me.

I would not consider it unimportant. The item at issue relates to debts you have (or admit), and it is part of a document whereby you seek to incur further debt.

The fact that an inaccuracy of that sort seems immaterial to you does not guarantee that it will be inconsequential. For instance, the inaccurate duplication might be pigeonholing you as a high-risk exposure, allowing the bank to impose on you harsher restrictions now or in the future (especially in the event that you fall behind on the payments).

Moreover, knowingly consenting to that inaccuracy could complicate your requests to correct errors (if any) in subsequent credit reports. The rating agency could refute your request by saying "This loan document with your signature on it reflects that you owe this high amount", and the loan officer will not be there to help you. There could be additional ramifications, but these are two I can think of right now.

The loan officer's pretext that the inaccuracy stems from auto-populated fields means nothing if that explanation is not clearly stated by the bank in the document you are signing. The document constitutes (or is an important part of) an explicit contract between you and the bank. Others' carelessness about contracts they sign won't help you if things turn ugly later on.

  • And who says you wouldn't have got a better interest rate with half the debt?
    – gnasher729
    Sep 6 '19 at 12:32
  • @gnasher729 I'm not following (?) the sense of your question. But generally speaking, greater levels of debt results in higher interest rates, which is a form of harsher restrictions I mentioned in the 2nd paragraph. Hence the importance for the OP to ensure that the document accurately reflects his debt, not the double thereof. Sep 6 '19 at 13:30

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