Ca Department of Business Oversight Issues Release on Acceptable Evidence of Disbursement Date
Tuesday, June 20, 2017
The Department of Business Oversight recently issued updated information regarding acceptable evidence of compliance with the law prohibiting lenders from charging interest to borrowers more than one day prior to the disbursement of loan proceeds from escrow (the per diem law). The DBO received requests from licensees under the California Residential Mortgage Lending Act to identify what constitutes acceptable verification of a licensee's compliance with the law after the adoption of the TILA-RESPA Integrated Disclosure rule.
The Commissioner's release stated that any of the following are acceptable evidence to show compliance with the per diem statute:
- Written or electronic records reflecting communications between the licensee and the settlement agent verifying the disbursement date of loan proceeds and identifying the name of the settlement agent providing the information and the electronic or business address used to contact the settlement agent; or
- Contemporaneous written or electronic records memorializing oral communications between the licensee and the settlement agent verifying the disbursement date of loan proceeds and identifying the name and telephone number of the settlement agent providing the information.
In response to frequently asked questions, the release states that the disbursement date on an ALTA Settlement Statement is acceptable evidence of the disbursement date if: 1) a settlement agent prepares the statement; 2) the statement identifies the date that it was prepared; 3) the preparation date is not before the disbursement date, and; 4) the statement identifies the settlement who prepared it.
In addition, non-ALTA forms are acceptable if the settlement or closing statement prepared by a settlement agent does the following: 1) identifies the settlement agent as the preparer; 2) identifies the date the statement was prepared; and 3) identifies the actual date of disbursement.
However, using the Closing Disclosure may be insufficient absent corroborating evidence because the disbursement date on the Closing Disclosure is an estimated date and may not be accurate.