I reviewed a loan that I am sure we made a mistake on, but the dept. doesn't agree.

We closed the first and the HELOC on the same day - part of the HELOC went to help payoff the original first so that the borrower's would not have to keep paying PMI. The equity dept. started charging interest on the HELOC back to the date of when the borrowers signed rather than after the deed was recorded and the loan was funded. The difference in days is significant - 8.

One reason I say this is wrong is because Calif. Civil Code §2948.5 says you can't start charging the borrower interest until either one day prior to recording if there's an escrow or on the date funds are available for withdrawal if there is no escrow.

Agree or am I off base somehow?

Ask the department how they justify charging interest on funds not disbursed.

I agree with you

I agree with you - boy the auditors will have a field day on this one...

Wow - I'd calculate that refund and take care of it now!

From the In Brief section of the American Banker on 12/23:

"The CA Department of Corporations Friday said it filed a lawsuit against Long Beach Mortgage Co., a unit of WaMu, seeking $9 million in civil penalties.

'The state said it discovered during a 1999 examination that Long Beach had overcharged borrowers by initiating interest rate charges more than one day before the loans closed, violating a state law that says lenders may begin charging interest only within 24 hours of closing."

Will we see your bank name here next, Anonymous?

Where can I find a copy of Calif. Civil Code §2948.5 online?

You can find it right here.

Go to:

http://www.leginfo.ca.gov/calaw.html

Mark the Civil Code and search. That will bring up a table of contents. Select the range and you will get a text file. It will probably include some sections before and after, but usually only be a few pages.