Q1 The new regulation requiring us to post payments on day we receive them when the payments are made after our cutoff hours-does itcover ALL loan payments (comemrcial, ag, consumer,etc., only HPML or ALL residential mortgage loans?
Q2 Can we post the notice requirement in our lobby/drive up or must we send the existing customers a notice and on new loans included it inside the note?
Thanks,

1. All mortgage loans

2. It has to be in writing, so a lobby notice doesn't cut it.

Is effective date for posting of payments also Oct 1, 2009?

Yes.

Does #1 also include mobile home loans without a mortgage on the land (no dirt)
#2 - Can you give me the citation for the notice requirement please?

What about payments received in the night deposit. I'm assuming the date of receipt is the date the night drop is opened and the payment removed?

Paragraph 36(c)(2)
1. Payment requirements. The servicer may specify reasonable requirements for making payments in writing, such as ........

so, a payment made today after 2pm, will be receipted with tomorrows date and the payment will be credited on tomorrows business. will this work?

If you disclose this information to the borrower in writing.

Otherwise:

3. Implied guidelines for payments. In the absence of specified requirements for making payments, payments may be made at any location where the servicer conducts business; any time during the servicer’s normal business hours; and by cash, money order, draft, or other similar instrument in properly negotiable form, or by electronic fund transfer if the servicer and consumer have so agreed.

We have branch capture so there is no cut-off time. It's the time we close. However, Saturday we have a drive-thru that is open. Would they consider that normal business hours? For other items in Reg Z it would not as we are not open for virtually all business on that day. Can we still post those as received on Monday or do those need to be backdated??

Just heard back from our regulator (FDIC). We have the same situation as Queen Mum, so I asked if (1) we could create a policy for customers defining non-conforming payments and using a schedule similar to Reg CC for business days and (2) if we received a payment on a Saturday, would we have to effective date the payment to Saturday, since we don't process on Saturday.

ANSWER: Q1 - Yes the bank can create a policy for non-conforming payments but it can't be "payment made by unverified funds is non-conforming". (We are saying payment without coupon or other identifier is non-conforming. Any other ideas?). Reg CC is a different regulation than Reg Z. If you can accept a payment on Saturday, you can post a payment on Saturday, so you cannot use a Reg CC-like schedule.
Q2: OSC 3. Date of receipt. The "date of receipt" is the date that the payment instrument or other means of payment reaches the mortgage servicer. For example, payment by check is received when the mortgage servicer receives it, not when the funds are collected. If the consumer elects to have payment made by a third-party payor such as a financial institution, through a preauthorized payment or telephone bill-payment arrangement, payment is received when the mortgage servicer receives the third-party payor's check or other transfer medium, such as an electronic fund transfer.

Your original intuition appears correct. There is no discussion here regarding whether or not the bank receives payment on a "business day" or "banking day". It appears that you must credit customers for payments received on Saturdays before you know if you can collect on Monday. Once the bank is able to verify funds and identifies a situation where they cannot collect, then of course the bank has its normal recourse for payments not received/late payments. You should be able to retroactively eliminate the erroneous payment in your system and not credit the customer for having paid.

I guess, from the reaction I am getting from Operations, this is much more complicated to do than it sounds.

Hope this helps!

SkiDoo,

What I'm wondering is if we don't process on Saturdays, won't the payment still only process on Monday even if we backdate? If it does accept the date, will the interest be affected as of Saturday or Monday?? Confusing???

So it appears you must credit upon receipt of the check with no bearing as to whether you can process said check. Am I read this correctly?

Yes Truffle - that is my understandng.

Queen - I am not sure how the operating side of things works for you. I believe we will have physcially set those payments made on Saturday aside and then process them on Monday with an effective date of Saturday. This will cause our system to adjust the accrued interest and do the correct split (on a P&I) payment. There has also been some talk of posting the payment online, but I haven't gotten an answer on how that works yet.

I'm not sure if I am understanding your question correctly, but I hope this helps. If not, try me again - I am slow.

You did. I just wasn't sure how to word it. I'm so confused right now. I need to get with our Loan Ops and have them check to see how it will work. They may have to call our Processor. Oh What Fun!!!!!

I hear ya! My Ops Officer is ticked at me - like I made this [censored] up! Her biggest hang up was that we had to credit payment on uncollected funds - but I told her the regulators don't care if the bank loses a few bucks on a deal, they are there to protect the consumer. She still won't respond to my emails!

OK, just when I thought I had it all figured out - BAM!

All payments are run through our teller system. On Fridays the branches are open 30 minutes later than the main bank where loan ops is. Since we run branch capture those payments will be no problem as our business day ends when the doors are locked. Saturdays are my problem. At the end of Friday, our system is moved up to Monday. We can't just lay the transaction to the side and hold it to be run through on Monday or the customer doesn't get a receipt. And if they bring in cash that could be another problem with holding cash out and not putting it in the drawer. When a customer makes a payment it states a date and time received and then shows to which teller drawer and then another date for the business date. So all receipts on Saturday will print showing it was received for 9/28/09 business.

Will this suffice for the "in writing" to the customer or does it have to be more defined? Also, what about the people that just drop off a payment and drive off saying they don't need a receipt. They wouldn't get anything in writing at all.

Since these would have been run through the teller system on Saturday with a Monday date, in order to back-date will our loan ops have to wait for Monday night processing and then reverse the payment on Tuesday and back-date the payment to Saturday??

See how confusing this is getting????

Randy, I am looking for paragraph 36(c)(2) as you partially quoted above but what section of Reg Z are you in????

Commentary 226.36(c)(2) - Comment 3.

Thanks! My mind is so confused I wasn't thinking!

I am preparing payment processing procedures and will mail to existing mortgage customers and will give to new customers at closing. It will cover the cutoff times, that Saturday is not a posting day, when we will post payments received in the night drop and mailed payments must be sent to our P O Box (and anything else that might come up once it's reviewed and blessed). Hope that will look like we're trying to comply.

I suppose we would have to get these letters out before October 1st??? Geez, I hate these rules.

From what my regulator is telling me, you basically can't have cut off times, like Reg CC. If you are open for business and can physically receive a payment, you must post the payment effective the day it is received. So, if you are open for business (not processing) on Saturday, regardless of your Reg CC business days, you must post that Saturday payment as received on Saturday. If your processing system won't allow you to post it on Saturday, you would have to effective date the payment to Saturday, so the borrower would not incur any additional interest, late charges or other penalty.

My problems is the tellers taking the payments can't do the backdating. When they run the transaction on the Teller system the date is automatically set to the next Monday. So would our loan ops have to take that payment and after it is posted on Monday, reverse it off on Tuesday and effective date it back to Saturday??? And what do we do about the receipt that tells the customer the payment is effective 2 days in the future??

I wish I could help you with that. Have you talked to your core or teller processor? I understand what you are going through - I really do- and I haven't figured out how we are going to do it yet either, but I would hate for people to plan their policy based on Reg CC cut offs only to be written up. Maybe you should check with your regulator - but then again - if you get a different answer - we will all really be confused!!!