Posted by Carol Graff on 10/25/12 5:21pm
Msg #440370

ques. re "per diem interest disclosure on refinance

Always found this one a bit confusing. Is this for the loan paying off or for new loan?

Reply by Linda_H/FL on 10/25/12 5:25pm
Msg #440371

Both - per diem interest (or daily interest rate) is

provided for payoffs to calculate the accurate payoff amount from date of payoff statement to date anticipated that lender will receive payoff (at old interest rate)

Also, per diem interest is charged on new loan from date of disbursement to end of current month (at new interest rate)

Reply by Pat/IL on 10/25/12 5:34pm
Msg #440376

Good answer, Linda! n/m

Reply by JanetK_CA on 10/25/12 5:48pm
Msg #440382

Re: Both - per diem interest (or daily interest rate) is

Linda, I think she's talking about a CA form that addresses the fact that, per state law, a borrower can choose to not pay overlapping interest on two loans for more than one day (e.g. if funding is on a Friday and disbursement is on Monday) by checking one of two boxes. It IS very confusing the way it's usually worded and many times in our county (we're both in Orange) - and now several others around the state - none of the options are appropriate. This is because we have electronic recording and funding and disbursement can happen the same day.

The right answer depends on the lender and the day of the week the docs are signed. Most lenders assume that it's a two-day process and word the choices based on that, which makes a big difference. There are a couple of lenders who word it to allow for same day funding, though. I wish there were more!! The most maddening part is that some lenders have instructions that the borrowers MUST check a box.

Sometimes the best thing to do with this one is to have them call their LO. We frequently don't have enough info to know when they plan to fund and the per diem charges are often not filled in. And unless the HUD shows a disbursement date, we don't really know what the plans are or the implications of one choice over the other (e.g. a rate lock expiration). And most importantly, advising them is UPL.

To the original question, because there is no loan to pay off with a purchase, this really only applies to refi's.

Reply by Linda_H/FL on 10/25/12 5:57pm
Msg #440384

Ah..thanks Janet...I'm from the Stone Ages

Where there were 3-4 overlapping days of double interest paid...

Reply by Carol Graff on 10/25/12 6:02pm
Msg #440385

Re: Both - per diem interest (or daily interest rate) is

Yes, that's the form. Thank you Janet & Linda. It's maddening to explain this to borrowers and 99% of the time they must ck off a box. Linda, I'll scan one to you later.

Reply by Linda_H/FL on 10/25/12 6:06pm
Msg #440387

Thanks Carol.. n/m

Reply by JanetK_CA on 10/25/12 7:07pm
Msg #440397

Re: Both - per diem interest (or daily interest rate) is

I know... this one figuratively gives me heartburn on a regular basis.

Reply by FeliseSoCal on 10/25/12 9:01pm
Msg #440415

I always dodge this one! And the Itemization of Amt Financed

Ugh!! Every time I try to explain it they don't get it.

Reply by Linda_H/FL on 10/25/12 6:28pm
Msg #440391

Carol sent me one - this looks to me like it's a disclosure

by the new lender, not the one being paid off.

Reply by MW/VA on 10/25/12 7:52pm
Msg #440403

Of course CA has a form for this! LOL IMO this is

definitely one for the LO's. I know the OP is just asking for understanding, not the ability to explain it.

Reply by JanetK_CA on 10/25/12 10:10pm
Msg #440430

Re: Of course CA has a form for this! LOL IMO this is

The most frustrating thing about this one is that we're caught in the middle of a "Catch 22". Sometimes we're specifically directed to make sure the BOs check a box, but the LO is unreachable (and usually has no clue about this doc anyway) and even if we were allowed to explain it to the BOs, we don't have enough info to guide them properly. Sometimes it doesn't apply and it's a non-issue - depending on the day of the week - but other times it's a no-win situation. Gotta love it...

Reply by Carol Graff on 10/25/12 11:20pm
Msg #440451

Re: Of course CA has a form for this! LOL IMO this is

I definitely agree, Janet. Glad to see I'm not the only one who detests this form. Personally, I think someone tried to sue over that one day interest and someone dreamed up this new disclosure.

Reply by Joan Bergstrom on 10/26/12 1:31am
Msg #440461

Janet is right: the worst is the 4 check off boxes

This form is enough to make late emailed loan docs look not too bad! LOL

I was in a bank signing about 6 months ago and I had the loan officer (20 yrs) handling the loan document signing ( they were all going out to lunch after the signing) and I came to this document and I said" that I had done many signings but had trouble with this document and could she explain the options)?

She gave some "goobly-gook nonsense and we moved on with the rest of the loan. She had no idea what the options meant.

This document is almost impossible for the borrower(s) or anyone else to understand.
I wish it would just go away, far far away.....................

Reply by JanetK_CA on 10/27/12 2:15am
Msg #440682

Re: Janet is right: the worst is the 4 check off boxes

Actually, this is one where I'll give Provident props. Their version allows for same-day funding, recording, and disbursement. I've also seen a credit union or two that didn't require a box checked, they just disclosed the options. Also a breath of fresh air.

And I bet those attorneys who came up with the "one day after a business day" disbursing language thought they were being very clever.... Hmph!