Is there anything in the regulations that you may not back date loan documents? I am trying to prove a point to a Loan Officer.

No "official" comments in the Reg that I know of. Search the term back dating and you should find dozens of previous discussions.

I consider back dating the same as falsifying a legal document.

I don't know why this keeps coming up. How is backdating anything legal or ethical?

Thank you both my sentiments exactly

ok, I'll bite. Why the hedoubletoothpicks does an LO want to back date a loan? I can think of absolutely NO circumstance under which this could be deemed 'necessary'. And I hardily ditto David and Dan that it's certainly not legal. Everyone is lying about when this was signed, notarized, effective, etc., ad nauseum.

I've heard of the scenario where it is a renewal loan and the (customer could not make it to the bank for XX days) /or/ (bank did not do their analysis on time). The bank and customer wanted to show continuity so the documents were signed as if it were the day they should have been signed so the renewal appeared seemless with the maturity.

Just a different way of saying we are falsifying these records to hide a delinquency.

At Compass Bank, they have just put a policy in place that when a loan is renewed, the effective date of the renewal must be backdated to the expiration date of the original loan. That's so the bank will not have a "gap" in their collateral position.

Wow! Illegal activity required by the bank.

There is a difference between effective dating a document and having the customer sign as if they signed the document on a date long past. I have seen effective dated documents all my career. It is when the bank makes the customer sign as if the document was executed on the effective date that really causes the problem.

Randy is right. Effective dating documents are commonplace in the commercial/ag world, even with loan documents prepared by legal counsel. Example: Note is signed and dated on January 4, 2010 but effective 12-31-09, which is the maturity date of the loan. Back-dating to the maturity date of loan (or to last payment date or to last interest paid to date) means not having to collect interest to the date signed and not have an "gap" between the maturity date and new note date.

need guidance for rubber stamp date on closing documents. The borrower signs all documents and the attorney "date staps" after closing. Mu concern is the Adverse Action. I feel it should be handwritten and not stamped - we would have beyond reseasonable doubt it is signed on the exact date, no claim should proper default and borrower claims they did not receive the document timely,

your thoughts?

Effective dating is also important for liens in the commercial world. Gaps are definitely bad. Best case is having things done before or on effective date but in the real world that is often not the case.

I don't see where a handwritten date is any better than a stamped or system generated date. I can write any date I want by hand. A system generated document might not even be mailed on the date it is generated. A good process is your best defense. If you are really concerned send using a method that provides a record of mailing. That would be unusual and expensive, but would resolve your concern.

I wonder if I can back date or effective date all my loan applications to 12/31/09 so I can continue to use the old GFE and HUD.

What a great idea!

I agree with jl!!!!

Just keep in mind that what is acceptable in commercial transactions is not in consumer transactions. The two worlds are just not comparable.

Depends on the officer doesn't it? I've seen many consumer loans documented just like a commercial loan except for, perhaps, the purpose of the loan is different.

(I just cracked myself up again)

Can someone explain to me what you mean by effective dating and how to do that? One example of what is happening at my bank is that someone gave a loan to loan review for preview on 2/4/10 and the note and all the documents are dated 2/3/10. It seems to me that all of the documents need to be corrected. Any other suggestions?

My loan review person is getting very upset with the loan officers about doing this and is wanting me to send out a warning to the loan department.

I assume these are renewals. As long as the borrowers sign and date on the day that they acutally sign the documents, the question on the validity of backdating effective dates should be left to your legal counsel.

This is a new loan not a renewal.

How can you backdate new loans?? Are they disbursing funds without signed notes? If so, you have more troubles than just worrying about dates on notes.

The discussions about backdating and effective dates refer to renewals, when a commercial loan matures and the renewal is not signed prior to maturity (not ideal but it does happen, when the lender is waiting for financials, etc.).

A new loan needs to be signed prior to or on the effective date/date of note. You would (I certainly hope not) advance funds until the documents are signed by all parties.

And, in my experience, the only time I have seen this happen one new loans is when there was some sort of embezzlement going on involving the loan officers.