I always advise borrowers that if they decide to use their RTC to fax it to their L/O AND the settlement agent additionally, and confirm by phone. This is in addition to whatever info is written on the RTC doc. I TELL them "if you do wish to cancel, please follow the procedure outlined here (instructions on RTC doc) AND CALL your L/O AND THIS SETTLEMENT AGENT (show them the agent listed on HUD - that's who's getting the funds/disbursing) to advise them, and confirm they will NOT disburse the funds."
Having been on the receiving end of RTC's for many years, I found that most of the time the borrower would fax it in to the settlement agent - likely that's due to most closings being done 'in office' and they instructed borrowers to do that. In turn, settlement agent would fax to me. NEVER in a million years would a Settlement Agent disburse on a cancelled loan (knowing it was cancelled). Every now and again a borrower would call me themselves, to confirm receipt. The mailed RTC would follow.
The settlement agent being the one with the funds - it's crucial that they be made aware BEFORE they disburse funds. In the scenario in this thread, where the borrower claimed to have mailed it but can't provide proof and the loan was disbursed - it's hard for me to imagine that she didn't pick up the phone and call someone. This scenario is the reason I advise people to CALL EVERYONE INCLUDING SETTLEMENT AGENT and make sure funds are not released inadvertantly.
Once the loan is funded, as her's was - there is no way to UNfund it, since the payoff to prior lien mtg is GONE, paid, done. You can't get that money BACK. Those are often wired. Unless she has some means of proving she communicated her desire to cancel SOMEHOW, to SOMEONE ...
In 14 years I never even heard of a situation where anyone, anywhere ignored a borrower's cancellation - if it was so much as whispered, it was honored, that is NOT a situation any lender or settlement agent would put themselves in. It would be an open/shut lawsuit. |
