Posts tagged ‘Business Day’

Is Tomorrow A Business Day?

Image result for veterans dayToday I am going to get down in the weeds a little. So, grab some extra coffee before you find out about the joys of how to define a “business day” for purposes of the Truth In Lending Act and RESPA.

There are of course, a plethora of timed notice requirements in the byzantine world of mortgage finance such as the three-day right of rescission and the receipt of TRID disclosures within 3 business days of receiving an application and at least 3 business days before a closing. A business day is generally all calendar days except Sundays and federal legal holidays specified in 5 U.S.C.A §6103.

Federal law recognizes 11 days as National holidays (5 U.S.C.A §6103). 4 of those holidays specify specific dates on which they are to be celebrated (New Year’s Day, Independence Day, Veteran’s Day, and Christmas). So what do we do in those cases where a holiday celebrated on a specific date is celebrated on a day other than the day on which it falls? As luck would have it, the official interpretation to the definition of business day tells us exactly how to handle this. “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). In cases where the more precise rule applies, the observed holiday (in the example, July 3) is a business day.” 12 C.F.R. § Pt. 1026, Supp. I, Part 1, §1026.2(a)(5)

Since we’re on the subject, what should you do if your member’s credit card payment are due on the 10th of each month? The answer is more complicated than you might think. If your credit union is closed tomorrow because it celebrates Veteran’s Day on the 10th, then it must accept payment as timely if the payment is received on the next business day which could be as late as Monday.

Here’s where it gets even trickier: Even though your credit union knows well in advance what days it will not be open for business, you are still obligated to disclose the 10th as the date the payments are due on your periodic statements. Take a look at the official commentary; See 12 C.F.R. §1026.7 (b)(11)(9) for further explanation.

Incidentally, throughout this blog I am providing links from the CFPB’s eRegulations. This is the easiest way of easily sifting through the regulations and their accompanying commentary.

On that note, yours truly is taking a floater tomorrow. I’m actually headed down to God’s Country (aka Long Island) to see how the family is doing and to take a train ride into the city. Maybe we will run into each other.

 

November 9, 2017 at 9:57 am Leave a comment

Did You Receive A Mortgage Application?

Saturday, October 3, 2015 was the day the TRID regulations kicked in. The new integrated disclosure requirements apply to all applications received on or after that date. For many of you, nothing I’m going to say in today’s blog is surprising. But I’m going to guess there are some of you who never quite got around to reviewing the regulations as much as you wanted to. So in the coming weeks I am going to periodically review some of the basic concepts behind the regulations and provide you with some guidance as to where to look for answers as you go through the TRID process for the first time.

By the way, the CFPB has done a great job providing implementation material and all of you should be familiar with their site. In implementing the regulation, it’s the CFPB’s hope that combining and simplifying  the initial disclosures  will lead to a better informed home buyer. The Loan Estimate is replacing the erstwhile GFE and Early Truth in Lending disclosure.

One of the most important changes made by the CFPB was to redefine what an application is so that creditors have less flexibility in determining when disclosures have to be provided. In the old days, like last Friday, an application was received when you had “the borrower’s name, the borrower’s monthly income, the borrower’s social security number to obtain a credit report, the property address, an estimate of the value of the property, the mortgage loan amount sought, and any other information deemed necessary by the loan originator.” An application could be either in writing or electronically submitted, including a written record of an oral application.

As of Saturday, an application is received anytime you receive the name, the borrower’s monthly income, the borrower’s social security number to obtain a credit report, the property address, an estimate of the value of the property, and the mortgage loan amount sought. As a result, an application is now received regardless of whether or not you have traditionally  required additional information for an application to be complete. Again, this makes perfect sense if your goal is to get information in the hands of consumers as quickly as possible.

But lets’ say your credit union has never started the mortgage process without obtaining eight pieces of information. The CFPB gives you some flexibility if you know how to take advantage of it. First, you are allowed to request more than the six pieces of information that trigger the early disclosure requirements so long as you provide the Loan Estimate when you get the six pieces of information regardless of how much information you will use in underwriting the loan.

Sequence is also important. You could receive 14 pieces of information from a member; but, if that information does not include the 6 magic factoids then an application has not yet been received and your credit union does not yet have to provide an Early Disclosure.

The elimination of the “any other information” catchall makes the second part of the definition more important. Remember that an application includes a written record of an oral application. This means that your originator having a casual conversation with a potential first time home buyer just curious about the housing market may have taken an application and not even know it. This is a great example of why you need to have updated procedures in place.

Now, let’s say you have received an application.  A creditor is responsible for delivering the Loan Estimate or placing it in the mail no later than the third business day after receiving the application. (1026.19(e)(1)(iii)). Were you open on Saturday? For purposes of complying with this rule, a “business day” means a day on which the creditor’s offices are open to the public for carrying out substantially all of its business functions. See § 1026.2(a)(6). In other words, if you are not open for business on the weekends, the clock doesn’t start to run. It also  means, as explained by the commentary, that if an application is received on Monday, the creditor satisfies this requirement by either hand delivering the disclosures on or before Thursday, or placing them in the mail on or before Thursday, assuming each weekday is a business day.

You can use email so long as the member has consented to receive the disclosure electronically and you receive an acknowledgement that the email was received.

Employment Numbers Disappoint…Big Time

The employment numbers Friday were like the Yankees performance over the last seven games of the season: lousy. Once again the Fed finds itself in the unenviable position of deciding if the economy is ready for an interest rate rise or too weak to withstand the shock. On Friday, the DOL reported Total nonfarm payroll employment increased by 142,000 in September, and the unemployment rate was unchanged at 5.1 percent. Are the numbers scary enough for the Fed to push back an increase? My guess is no but it makes next month’s numbers that much more important.

 

 

 

 

October 5, 2015 at 10:41 am Leave a comment


Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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