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Payment Date Change Disclosure
Question: This may sound stupid, but I have seen a document used by a company that informs the borrower that the payment date of their note has been changed in order coincide with their disbursement of funds. To me this is a change in the terms and therefore requires a loan modification agreement. The document which is called the first payment letter has the general 1st payment letter text and is signed then the other half of the document states that if there are any changes in the payment date we will notify them. What do you think? Is this a change in terms if we have to adjust the payment date?
Answer: Whether a new agreement must be executed is really a question of state law and what your original loan documents said. New disclosures for Truth in Lending and RESPA wouldn't be triggered unless the change affected one of the disclosed terms other than odd days interest. Under those regulations, this would be treated as a modification.
Copyright © 2005 Compliance Action. Originally appeared in Compliance Action, Vol. 10, No. 15, 12/05
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