Posted by bagger on 2/13/12 2:55pm
Msg #411629

General question

If a borrower did not sign the first payment coupon, why does that hold up funding?

Reply by GOLDGIRL/CA on 2/13/12 3:04pm
Msg #411634

Lenders don't have to have reason why

Because lenders want every document in their loan pkg signed whether it applies to the borrower or not and whether it makes any sense or not, and they can hold up funding for any reason they feel like. Or they can just say they're holding up funding to put the pressure on getting even the most worthless doc signed ... just because they can. Now, if the first payment coupon did not have a signature line, that's a different story ....

Reply by Jack/AL on 2/13/12 3:23pm
Msg #411641

Re: Lenders don't have to have reason why

I wonder what would be the lender's response if the borrower now says, "never mind, for I've changed my mind (found a better lender with a lower interest rate) and wish to cancel," although the 3-day cancellation period has ended.

Reply by JanetK_CA on 2/13/12 4:06pm
Msg #411649

Re: Lenders don't have to have reason why

That reminds me of one item on a long list of notary instructions that I received last week. (Fortunately, there was some misinformation exchanged and I had to give this one back.)

This one had me scratching my head:

"Please do not presume that a document doesn't require a signature. If it's in the package it should be signed. Any missed signatures could result in a full or partial redraw in [sic] which we will request you to correct as soon as possible."

I can think of many ways this can be interpreted - or misinterpreted.

Reply by janCA on 2/13/12 4:21pm
Msg #411654

Re: Lenders don't have to have reason why

Well, Janet, as far as I'm concerned that's just laziness on the part of the lender and/or title. It's not our responsibility to determine whether or not a document is to be signed if it doesn't have a signature line. And that's exactly how I would have interpreted that sentence.

Reply by ReneeK_MI on 2/13/12 5:03pm
Msg #411657

General answer

If it was the First Payment coupon - my bet is it's not holding up funding. "Holding up funding" seems to be a catch-all phrase anymore for "Get this fixed NOW!".

If it's the First Payment Letter - that's totally different, and a picky lender might hold funding.

Reply by Saul Leibowitz on 2/13/12 5:25pm
Msg #411658

Re: General answer--2 parts

1. The right to rescind is extended day-by-day for every day that a transaction funds late, no matter who's fault it may be; and
2. It is important to get everything with a signature line signed and as to other forms, that may be covered in the instructions.

Hope this helps.

Reply by Linda_H/FL on 2/13/12 7:38pm
Msg #411666

Re: General answer--2 parts

"1. The right to rescind is extended day-by-day for every day that a transaction funds late, no matter who's fault it may be"

You have a citation for this? I, honestly, in 30 years, on both sides of the table, have never heard of this.

Reply by James Powell on 2/14/12 7:07am
Msg #411680

Re: General answer--2 parts

I guess it depends on the definition of "consummation"

Paragraph 23(a)(3).

1. Rescission period. The period within which the consumer may exercise the right to rescind runs for three business days from the last of three events:

• Consummation of the transaction.

• Delivery of all material disclosures.

• Delivery to the consumer of the required rescission notice.

However, it does not appear that disbursement is considered "consummation"

23(c) Delay of creditor's performance.

1. General rule. Until the rescission period has expired and the creditor is reasonably satisfied that the consumer has not rescinded, the creditor must not, either directly or through a third party:

• Disburse loan proceeds to the consumer.

• Begin performing services for the consumer.

• Deliver materials to the consumer.

Reply by ReneeK_MI on 2/14/12 9:12am
Msg #411686

FDIC defines it

"13) Consummation means the time that a consumer becomes contractually obligated on a credit transaction."

The loan is consummated when signed, and a delay in funding would not extend the rescission period. It can cause a whole lot of other headaches, but that's not one of them.