When recording occurs the day after funding, should the interest of the loan on that business day of funding be paid for by the seller ?

Asked by Eechu1, 95691 Tue Dec 14, 2010

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Claudia Muller’s answer
Claudia Mull…, Mortgage Broker Or Lender, Fremont, CA
Wed Jul 25, 2012
Without reading all the other answers:

California Good Funds Law states (loosely) that the funds must be verified to be 'good'24 hours before proceeds can be dispersed.
The buyer, then, is required to have the funds at escrow 24 hours before recording. Because you have those funds released to you, you are responsible for the interest being paid on it from the day it is given to you.
You have the right to wait until Monday to fund the loan and record on Tuesday.
Some counties do allow funding and recording on the same day. Check with your county to see if that can occur.
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John Juarez, Agent, Fremont, CA
Mon Nov 4, 2013

It appears that you have a complex situation with lots of moving parts. There is also lots to your story that we do not know. I think an attorney is who you need to speak to.
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jennylgriffin, Home Owner, Albany County, NY
Mon Nov 4, 2013
what happens if a loan modified due to hardship is not recorded and now foreclosure proceedings have occurred , and its after death of my husband who is on loan?
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Tanya Aguile…, Agent, West Sacramento, CA
Tue Sep 20, 2011
The day the loan is funded is the day the buyer starts paying interest on the loan. That's why its always good to make sure recording is on the same day. For example if the loan is funded on Friday and the recording does not happen until Monday the buyers are paying the interest for the loan even though they do not have access to their new home yet. Also try to close at the end of the month due to you will pay less interest for the rest of the month and your 1st payment will be not the following month but the month after since you pay your mortage in the rears not up front.
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Ute Ferdig -…, Agent, New Castle, DE
Wed Dec 15, 2010
The buyer pays for the interest from the day funding occurred regardless of when recording occurred. I can only see the seller being responsible for the interest if the seller caused a delay which is typically not the case and even then it would not be automatic. It would require a written agreement between buyer and seller. Escrow cannot just change the closing statement. Absent an agreement in writing, the interest for the buyer's loan is never the responsibility of the seller as the seller is not a party to the loan agreement you have with the bank. Thus, unless there is an agreement between you, the borrower, and the seller, there is no obligation by the seller.
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Ruth and Per…, Agent, Los Gatos, CA
Tue Dec 14, 2010
Good point Eechu1

The Proceeds from the sale is transferred to the seller on the day of recording, so would it be fair to ask
To pay for interest?

Good luck.
Web Reference:  http://www.ruthandperry.com
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John Juarez, Agent, Fremont, CA
Tue Dec 14, 2010
Once the title/escrow company has good funds on deposit from the buyer (you) and lender to close the purchase of the home the title is released for recording the next day by the county recorder. The money does not go to the seller until after the recording has been done. The seller does not have his (your) money so why should the seller pay your loan interest? Yes everything is said to be negotiable but some things are rarely negotiated because they are what they are.
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Nelvas, , Fremont, CA
Tue Dec 14, 2010

It all depends on the term of the contract. If the buyer is receiving "seller's credit" (credit from the seller towards the buyer's closing cost) and if there is enough to cover the buyer's pro-rated items, such as mortgage interest then it is a possibility.

If you should have any further questions, I can be reached at nsamiee@diversifiedmg.com

Nelva - http://www.diversifiedmg.com
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Carolyn Gjer…, Agent, Davis, CA
Tue Dec 14, 2010
Any fee that is associated with the sale of a property can be negotiated as to who will be the responsible party. Typically though unless a separate credit for closing costs has been negotiated the buyer pays the interest on the loan until title transfers. If the recording happened the day after funding because of something the seller did than you may have an easier time getting them to pay for that interest but often it is out of the seller's control when the deed records and title is transferred. An escrow officer may have some other ideas on how to reduce the time between funding and recording and I recommend speaking with a local title company.
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Anna M Brocco, Agent, Williston Park, NY
Tue Dec 14, 2010
What is your agent and or attorney advising--generally the seller is not obligated to pay the interest incurred.
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Steve Hovaki…, , Burbank, CA
Tue Dec 14, 2010
Everything is negotiable; however it is not seller’s responsibility to pay any buyer’s loan fee/interest,

Good Luck
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