Elizabeth Webb, 36 years old
Essentially the docs are all signed and dated for one day prior to the dates on the docs. It is not a situation where documents were "backdated" Any insight is appreciated. Is dating loan documents a compliance issue? It's really more of a legal issue that causes compliance issues. Documents are improperly dated legal issue that can create "ripple" effects for compliance. If this loan was subject to RofR, for instance, the rescission notice has the wrong beginning and end date. If you needed 7 days between delivering MDIA disclosures and closing, the time gap wasn't observed. Whether documents are backdated or postdated, it's still wrong.
There are any number of contexts where this comes up — some legitimate and others not exactly aboveboard — but the logistics of negotiating and signing contracts are such that the issue is unavoidable. For those with an hour to kill thinking about the issues, Jeffrey Kwall and Stuart Duhl wrote an excellent article on backdating that was published in Business Lawyer in Setting aside such issues, avoiding unwanted side effects of backdating contracts can be tricky, especially when the purported effective date of an agreement is several months before the date it was actually signed, as can be seen in FH Partners, LLC v. Complete Home Concepts, Inc. FH Partners involves the ownership of a promissory note that was made to a bank in connection with a loan. FH Partners made a demand on the debtor for payment of the loan and eventually sued the debtor and guarantors. The law does not support the blanket conclusion that a retroactive effective date in a contract is only enforceable when the evidence demonstrates that the parties had agreed to the material terms of their contract as of the retroactive date. However, where a contract is ambiguous with respect to its effective date, the absence of an explanation for a retroactive effective date, and evidence that the parties had not agreed to the material terms of their contract as of the purported retroactive effective date, are relevant considerations dating loan documents resolving the ambiguity.
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.
More about dating loan documents:
You have found a home you want, been approved for the loan you dating loan documents, and have now entered the final phase of loan processing. You may be ready to start unpacking and decorating, but before you can call the house your own, you must complete one last step: closing on your mortgage. During closing, the property title passes from the seller to the buyer. A closing agent—usually an attorney or official from a title or mortgage company, and not to be confused with your real estate agent—oversees this process, which typically takes place at a title company, escrow office, or your home. The mortgage closing process varies from state to state. Your closing agent will explain the specifics of your settlement process, and who needs to be there. This agent acts as a mediator between the selling and the buying party, and ensures that all documents are signed and recorded. Finally, he or she will oversee that all funds, including closing fees and escrow payments, are paid and properly disbursed. Once your loan has been approved, the home closing begins so you need to be ready.
Lawyers who were trained in commonwealth jurisdictions may have an ingrained concept that backdating a document is generally improper, if not illegal. This is reflected in the Linklaters article Execution of Documents: Five Common Questions Answeredwhich offers the following advice for in-house lawyers:. Unfortunately, the article offers scant authority, and a search on Google reveals little else on the subject from the commonwealth world. In the US, however, there seems to be have been much more consideration of the issue at least according to my Google search results. Despite recent controversies surrounding the backdating of executive stock optionsthe general attitude in the US is that backdating is not wrong or rightper se. Rather, it is the use of the backdated documents by the parties or their counsel that may violate the law. In the law of contracts, it is elementary that ordinarily a contract speaks from the day of its date, regardless of when it was executed and delivered. It is of common occurrence in connection with deeds, leases and other contracts that, while they are not in effect at all and have no legal existence until delivered, yet, in respect to the date of delivery, they, in point of commencement, relate back or commence in the future. Such relation back or forward contravenes no principle of law and is determined by the dating loan documents of the parties as deduced from the instrument itself. As a practical matter, the proper date to put on an agreement is something that corporate counsel is likely to have to make a judgment call on quite often.
Nearly every notary public will find themselves in a position where they are asked to backdate a document. Backdating is the act of writing an earlier date on a document. Unfortunately, this is an all-too-common practice in a variety of different fields and industries. Clients whom need documents notarized by a given date may have forgotten or otherwise failed to meet the deadline. Rather than bearing the consequences of missing the signing date, the client may ask a notary public to include a prior date on the document. Backdating a document may seem harmless enough, but under no circumstances should a notary public include a date other than the current date of the signing. Backdating is both unethical and, more importantly, illegal. Including a prior date on the document can come back to haunt notaries later down the road.