Making sense of the "Date Issued" on a Closing Disclosure
Since this keeps popping up, let's take care of this ...
Every Closing Disclosure must have a "Date Issued" which is simply the date on which the disclosure is delivered to the borrower. That could be electronically, by mail, or in person.
So the question today is what is the correct Date Issued? Let's go through a bunch of different scenarios and my interpretations of them:
1.Issued by Mail
The Date Issued is the date on which you placed it in the mail. Since we're working with a 24-hour business day with this Rule, I interpret this to be the same day even if placed in the mail after business hours. So if you drop it at the Post Office at 8:00 pm tonight, I still think the Date Issued should be June 8th.
2.Issued in Person
The Date Issued is the date on which you actually hand it to the person. So if we're short on time and the loan officer personally delivers the CD to someone's house, the Date Issued is that day. This can get tricky if we prepare a CD on Friday for the loan officer to deliver "over the weekend." Saturday? Sunday? Friday night? While this is problematic, the Rule isn't hard to understand - the correct date is the date on which it is hand delivered, and it's our responsibility to figure out how to get it right!
3.Delivered Electronically
The key here is whether the borrower has already consented to receive documents electronically in compliance with E-Sign. If they have already given this consent, then the Date Issued is the same day that we e-mail it (no matter when they open it).
On the other hand, if we're still waiting for the borrower to consent when we make an attempt to deliver the CD electronically, the CD is not considered delivered (to set the Date Issued) until the borrower consents. I would expect most systems to automatically update this. (If your system is giving you trouble, contact my colleague Paul Bates our resident systems expert, who you might know better for his starring role in the hit TV show Get Smart. "Missed it by that much!")
4.Delivered by Settlement Agent
The trick here is similar to having a loan officer deliver the disclosure; if you prepare a disclosure on Wednesday and ask the settlement agent to deliver this, then you have to predict when the attorney gives it to the borrower. If this is actually a problem for you, one solution might be to mail it in addition to (and shortly before) to giving a copy to the settlement agent. That way, you can just use the Date Issued that you sent by mail.
5.Re-Delivery of Copy for Closing *subject to debate
So often (although it varies), the Date Issued will match the closing date because minor revisions are often made to the initial Closing Disclosure and this revised copy is delivered for signature at closing. But what happens if you issue a perfect version of the initial CD and absolutely no changes are required? Do you update the Date Issued to match closing date when you deliver a copy of the CD to be signed at closing?
Well I suppose it's open to debate. One person would argue that technically you are delivering the CD again, so maybe a new Date Issued is required. But it's probably more reasonable to say that a new Date Issued is NOT required when a mere copy of an earlier CD is re-delivered later (likely for signature at closing). After all, the delivery that matters for regulation purposes is the first time.
I hope that helps. Admittedly this isn't a major risk in my book. The regulation isn't perfectly clear, there's an absence of borrower harm either way, the regulators haven't issued an interpretation, and at least, so far, we haven't seen investors taking a strong stance one way or the other.
In Other News:
Everybody see that the free website E-Regulations updated this week to add even more regulations? In my humble opinion, this is a much easier way to do research than combing through the Federal Register itself.
Hard to imagine that the area that inspired The Departed and The Town would evolve into what we now know as South Boston. If you are under the age of 30 or didn't grow up in Boston, here is an interesting article to help appreciate the change.
Good read by Jim Morrison in this week's B&T (subscription required), "Clinton Adviser Co-Authored Plan to Replace Fannie and Freddie", available here.
How do you hire good people (and avoid bad hires*)? Do you use a pre- employment behavioral assessment like Caliper? Do you insist on personally interviewing every significant hire? Being the "cultural filter" as Patrick Lencioni refers to in his book, Obsessions of an Extraordinary Executive. There are a number of approaches to scoring a candidate (I'm sure many of them that work). One simple framework I think makes sense is taken from Warren Buffet and is to grade a candidate on three things: (1) intelligence (or general competence at their job), (2) Integrity (would you trust them to work hard on a day when you weren't at the office?), and (3) Passion for this job (not passion about soccer or craft beers, but are they excited about this job, the difference they can make here?). Anyway, that's my two cents. Thoughts?
Supporting anecdotal data, the HBR reports that hiring one "toxic employee wipes out the gains for more than [hiring] two superstars." Read here.
"I'm a fighter. I believe in the eye-for-an-eye
business. I'm no cheek turner. I got no respect for a man who won't hit back. You kill my dog, you better hide your cat."
- Muhammad Ali
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