Posted by Hugh Nations Signing Agents of Austin on 6/27/10 5:36pm
Msg #342702

As we're all aware...

...two copies of the RTC must go to each borrower or person who has a security interest in the property. I have just encountered something that I've never run across in thousands of closings.

On a tax loan, the company has separated into two documents the actual Notice of Cancellation from the acknowledgment of receipt of the Notice of Right To Cancel. The acknowledgment is signed and goes back to the lender; the borrower keeps the Notice of Cancellation, which he sends in if he elects to cancel. Has anyone else seen them separated thusly?

The lender also provided only one copy in the packet, for a couple, so the packet was short three copies of the RTC. Also, each borrower is supposed to get a copy of the TIL, and only one was provided. And finally, the TILA requires that the borrower/security interest holder hand-write the date on the RTC. The date was pre-printed on the acknowledgment of receipt of RTC, which is the only thing for the borrower(s) to sign in the packet.

Reply by Notarysigner on 6/27/10 6:03pm
Msg #342703

No I haven't see one but I sure would like to see what it looks like. On another note, I have quite often seen the date pre-printed on the acknowledgment of receipt of the RTC; assuming you mean the date signed and also the date three days out.

Reply by LKT/CA on 6/27/10 6:22pm
Msg #342706

Tax loan? Someone is borrowing money to pay taxes? I've had blank RTCs with instructions for me to fill in the correct dates and have borrower(s) initial. Mostly though, the dates are already printed. Never had RTC split - both acknowledgment and cancellation on same page.

I did a signing recently where there were instructions for the borrower to keep the signed/notarized packet for pickup by courier. That was a new one for me.

I'm glad I take along a lightweight copier as the borrower did not have copies of their two forms of ID. The lightweight printer has been well-worth it. It also comes in handy in other signings (loan and non-loan signings) when the borrower didn't have a copier but was feeling uneasy giving up their only copy of <fill in the blank> to return with the package. I put client at ease by making copies of <fill in the blank> for them on the spot at no charge.

Reply by LKT/CA on 6/27/10 6:31pm
Msg #342707

Should have read......

<<<....when the borrower didn't have a copier but was feeling uneasy giving up their only copy of <fill in the blank> to return with the package.>>>

Should read: .....when the borrower didn't have a copier, didn't get the requested copies made before the appointment and was feeling uneasy giving up their only copy of <fill in the blank> to return with the package.

Reply by PAW on 6/27/10 7:34pm
Msg #342717

Yes, I remember seeing them a couple times over the years. I don't remember the circumstances (lender, title company or maybe an annuity settlement).

A couple of points. First, no signature or "acknowledgment" is required that shows the receipt of the RTC. The US code only states that "a creditor shall deliver two copies of the notice of the right to rescind to each consumer entitled to rescind." The signature showing receipt is a lender requirement. Second, the Truth In Lending Act does not require 'each' person to receive a copy of the TIL, only that specific disclosures be provided. This is typically done using the TIL and Itemization of Amount Financed disclosure documents. Again, lenders often have the borrowers sign the RTC and TIL to acknowledge a receipt of the documents.

The RTC and TIL that we see in most packages, are commonly accepted forms. However, the US code does not specify the syntax or format of the "disclosure", only that the disclosures must be made in accordance with the TILA.

Reply by GOLDGIRL/CA on 6/27/10 9:39pm
Msg #342729

It apperars that somewhere down the road when TILA/Reg Z came into being, somebody created a "typical" RTC form, which all the document software people picked up so that now it's pretty much the accepted form, because as PAW stated, the U.S. code does not require borrowers to sign or acknowledge receipt of two copies of the notice of the right to rescind.

But to show you how manic all this has become, I have recently seen two forms from TCs that require notarized signatures that the borrower received two RTCs. This is in addition to their sig on the actual RTC forms.

Thing I can't figure out is why MOST lenders still do not provide the correct number of copies - leaving it up to us to make copies? Why is it our responsibility? Makes no sense. This is probably why lenders occasionally send 10-16 copies of the RTC, so they're covered.

And where in TILA is it written that the borrower is to handwrite in all the RTC dates???

Reply by Hugh Nations Signing Agents of Austin on 6/27/10 9:58pm
Msg #342730

***the Truth In Lending Act does not require 'each' person to receive a copy of the TIL, only that specific disclosures be provided.***

Haven't yet pulled up the statute (will get to that some time this evening), but was basing the comment on the following:

"Rescission Procedures

Following are highlights of the proper procedures to follow on loans where the right of rescission applies.

Each borrower and consumer who has an interest in the security property must receive 2 copies of the Notice of Right to Cancel and 1 copy of the final TIL Disclosure.

Each borrower and consumer who has an interest in the security property must hand-write the date of receipt on the final TIL Disclosure and Notice of Right to Cancel."

Reply by GOLDGIRL/CA on 6/27/10 11:31pm
Msg #342737

Hugh, you said:

<<And finally, the TILA requires that the borrower/security interest holder hand-write the date on the RTC.>> which I misinterpreted as meaning borrowers had to fill in ALL the dates on the RTC, not just the signing date and the date they received their copies. Sorry.

But it does seem to be the trend lately. Provident has always required the borrower fill in everything on the RTC; recently I saw instructions on another lender pkg that dates on the RTC must be in the borrowers' handwriting .... Once again, makes no sense to me.... except that I suppose some borrowers are using the RTC to get out of loans, saying they weren't given copies (which, by law, they don't even need in order to cancel) or that the dates were wrong. So, I suppose if the borrower wrote them in and the dates were wrong, the lender could blame them. But of course, no borrower knows how to fill in the RTC, so the notary is telling them how, so the borrower would blame the notary. Totally screwed up.

Reply by JanetK_CA on 6/28/10 3:48am
Msg #342741

"I suppose some borrowers are using the RTC to get out of loans, saying they weren't given copies (which, by law, they don't even need in order to cancel) or that the dates were wrong. "

Correctamundo - at least according to one attorney I know. Rational or otherwise, they are trying all kinds of things to get out of their loans. If nothing else, I guess it might buy them some time, but I don't know if that is even true.

Reply by Bob_Chicago on 6/28/10 8:20am
Msg #342746

"the Truth In Lending Act does not require 'each' person to

receive a copy of the TIL"
I know better than to argue a point like this w the P Meister, but , at least as a practical matter, in a transaction subject to recission the TIL disclosures need to be delivered
A typical RTC provides that the RTC date is the 3 biz days following the later of :
Date of Xtion , or date of delivery of TIL disclosueres, or date of delivery of RTC. Therefore, you need to deliver the TIL disclosures in order to start the RTC clock ticking.
As an aside, has anyone raised the issure of the effect on RTC computation if the USPS
stops delivering or acceptin mail on Saturdey.Although the RTC rules are not drawn that way, they seem to have been designed so that a bwr wishing to recind, can mail the recission notice and have it postmarked on the last day for recisson. . Except in rare cases of wierd holiday dates. it counts a a recisson day, if mail is delivered.

Reply by PAW on 6/28/10 8:50am
Msg #342747

Re: "the Truth In Lending Act does not require 'each' person to

>>> As an aside, has anyone raised the issure of the effect on RTC computation if the USPS
stops delivering or acceptin mail on Saturdey.Although the RTC rules are not drawn that way, they seem to have been designed so that a bwr wishing to recind, can mail the recission notice and have it postmarked on the last day for recisson. . Except in rare cases of wierd holiday dates. it counts a a recisson day, if mail is delivered. <<<

The days of rescission have nothing to do with the Postal Service. (Though it may have been based on that way back when.) The rescission period is based on Sundays and Federal Holidays. Nothing else.

For those who aren't sure, 'observed' holidays ARE counted as work days. Case in point, July 4, 2010 falls on a Sunday. Independence Day is being "observed" on Monday, July 5. However, 7/5 is included as a day of rescission. Therefore, any loans signed on Thursday, July 1st, will have a rescission expiration at midnight, July 5th. Loans signed on Friday, July 2nd will have a rescission expiration at midnight, July 6th. And loans signed on Saturday, July 3rd or Sunday, July 4th, will have a rescission expiration at midnight, July 7th.

The following clarification of holidays that fall on specific calendar dates has been provided by the Federal Reserve Board:

Supplement I to Part 226-Official Staff Interpretations

Introduction

1. Official status. This commentary is the vehicle by which the staff of the Division of Consumer and Community Affairs of the Federal Reserve Board issues official staff interpretations of Regulation Z, as revised effective April 1, 1981. Good faith compliance with this commentary affords protection from liability under 130(f) of the Truth in Lending Act. Section 130(f) (15 U.S.C. 1640) protects creditors from civil liability for any act done or omitted in good faith in conformity with any interpretation issued by a duly authorized official or employee of the Federal Reserve System.

Section 226.2-Definitions and Rules of Construction
2(a)(6) Business day.
2. Rescission rule. A more precise rule for what is a business day (all calendar days except Sundays and the federal legal holidays listed in 5 U.S.C. 6103(a)) applies when the right of rescission or mortgages subject to §226.32 are involved. (See also comment 31(c)(1)-1.) Four federal legal holidays are identified in 5 U.S.C. 6103(a) by a specific date: New Year's Day, January 1; Independence Day, July 4; Veterans Day, November 11; and Christmas Day, December 25. When one of these holidays (July 4, for example) falls on a Saturday, federal offices and other entities might observe the holiday on the preceding Friday (July 3). The observed holiday (in the example, July 3) is a business day for purposes of rescission or the delivery of disclosures for certain high-cost mortgages covered by §226.32.

Reply by Bob_Chicago on 6/28/10 9:28am
Msg #342748

I appreciate that it is a stretch to put the words "logical"

and "Federal Reguations" in the same paragraph, and never using one word , when 46 will work just as well, but it seems to make sense
that sending a notice of recission would have been tied into postmarking a letter on a certain day, (Like filing income tax form) as U S mail was ,in the not too distant past, they way that most written communications were delivered.
I would not be surprised to see this issue addressed by RESPA rules if the USPS decides to end Saturday Mail.

Reply by JanetK_CA on 6/28/10 6:33pm
Msg #342846

Thanks, PAW! Very important RTC / holiday info!! n/m