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PREPARATION CLAUSES IN KENTUCKY MORTGAGES

Kentucky mortgages have few unique requirements. One of those unique requirements is that a Kentucky mortgage must contain a preparation clause signed by an attorney.  The requirement for an attorney to sign the preparation clause cannot be satisfied by a bank employee, title company employee or other individual signing the preparation clause.  Signing a preparation clause by someone who is not an attorney could constitute the unauthorized practice of law and could open up the individual and the individual’s employer to potential prosecution for such violation.  If the document is accepted for recording, even with an improper signature on the preparation clause, the mortgage is still valid.  However, banks should review their procedures for preparing Kentucky mortgages to make sure that they are not engaging in the unauthorized practice of law.