Posted by cyndi_ca on 4/10/07 9:22am
Msg #184435
A question for PAW
We have discussed the date of docs before and something had come to mind, curiosity really. Did a FL purchase last night, there was no RTC as it was an investment property. Docs were dated for 4-11, signed 4-9. What if there was a RTC period. How does the lender handle that when the RTC is 4-12? Any comments on that. And as always, I appreciate your responses and your generosity.
Cyndi
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Reply by PAW on 4/10/07 10:01am
Msg #184443
The date on documents (which are of no concern to the _notary_), is not the date they are created or come into existence. The date is typically the -effective- date. It is quite permissible to sign documents before they become effective, thus agreeing to the commitment. However, they cannot be recorded prior to becoming effective. So a loan becomes effective on 4/11, which also means that the daily interest doesn't start to accrue until 4/11. It also means the mortgage becomes effective on 4/11. The mortgage cannot be recorded until it is in effect, so it must record on or after 4/11. With investment property, since there is no RTC, some lenders will future date the transaction to allow for all the paperwork to be finalized, signed and approved.
Depending on the lender, the RTC if there is one, can be handled in different ways. Chase and Citi both have RTC's that show the "transaction" date on them and the expiration is three business days after that. So, in this case, the RTC could show the "transaction" date of 4/11 with an expiration date of 4/14. It is more common to see this with HELOCs than with standard equity loans, since the "transaction" date is often the date the account is established, which may be sometime in the future.
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Reply by cyndi_ca on 4/10/07 10:43am
Msg #184450
Thank you PAW, I do know that there is no RTC for purchase and investment prop. Just wondering what the Lender does on a property with an RTC and the dates in question in my example. Very interesting that lenders sometimes do this. Especially if there is a problem, this would allow for plenty of time for any errors to be corrected without delay. Thanks again. This helped with my curiosity.
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