[quote=fsbo]Just signed my re-fin loan doc, and caught the following in “Notice To Closing Agent & Borrower – Prepaid Interest Collected At Funding”
“California law provides that a Borrower shall not be required to pay interest on home loan for a period in excess of one day prior to disbursing of escrow fund…”
“If disbursement of loan proceeds occurs on a Monday…, there will be an additional two-day per diem interest charge..”
“It may be possible to avoid this additional per diem interest charge by disbursing the loan proceeds on a day immediately following a business day”.
Your initials would be required to indicate that you do not request or approve any request made on your behalf that escrow disbursement occurs on a Monday or a day immediately following a holiday.
You should be able to find this notice in your copy of loan docs. Wish our loan expert would share his insight with us…[/quote]
I got the same notice and I think it makes sense.
Disbursement on monday, probably means that the on the previous Friday, which means you get to pay interest for saturday and sunday on both loans during those days…Same thing happens if disbursement happens on the day after a banking holiday…In my case, my disbursement was NOT on a monday or day after holiday.
Anyway, my original question was not really about the mistakes/overcharges, but on how big the overlap would be on new/old loans.
In my case, in addition to taking 2 days, there were clearly an errors on the escrow co’s because I ended up paying extra interest
(1) Charged 1 day’s worth of interest 3 times (2 times were legitimate, 1 time was an overcharge), plus
(2) a 1 day overcharge on the old loan (after it was already paid)
#1 is interesting. On this day, both the old and new loan charges interest, which is legitimate. However, the interest payment for this day on the new loan is already included on the next month’s mortgage payment (to be made in october), but the escrow company also had it paid at the time of closing…
Probably just an accident (or maybe not)….Anyway, my previous refi I didn’t look very carefully, but looking at the docs, it seems like another escrow company did the same thing.
I guess, how many people would go though and argue over $100-200 when they just finished a $417k loan….(I’m sure there some self-derogatory joke I could make about being cheap penny pinching asian bastard this point, but I’ll refrain)…
Just wondering if we go through other people’s refi’s at, if there would be more mistakes found in general….
The other thing why I’m suspicious is that my money was wired to the escrow company 4 days prior to the date, so again I don’t understand why it would take so long to disburse the funds to the old loan (even 2 days). It’s not that I wired the funds the day before closing…. (Didn’t matter to me, since the funds wasn’t earning interest anyway…But the escrow company I’m sure was happy they got to hold onto my funds for an extra 4 days)…
Any yes, this all reminds me of the “fun” of RE purchases……
