If you service consumer-purpose, closed-end loans secured by a borrower’s primary residence, there are certain payment processing requirements that you must abide by. For instance, payments must be credited as of the date the payment was received. A delay is only permitted if it does not result in a charge (e.g. late fee, additional interest, etc.) or the reporting of negative information to a credit reporting agency. Regulation Z does allow you to prescribe reasonable instructions for applicable loan payments. If a consumer follows those instructions, it is considered a “conforming payment” but, if they don’t, it is a “non-conforming payment”. The crediting of non-conforming payments may also be delayed.
Kevin explains more in the video.
Published
2024/08/14
