No Time Lag Allowed in Crediting Electronic Mortgage Payment

When a consumer makes a mortgage payment online, should the mortgage servicer be required to credit the electronic payment on the day the consumer authorizes the payment?  Elena Fridman’s mortgage payment to NYCB Mortgage Company, LLC (NYCB), her mortgage servicer, was due on the first day of each month.  She had a 15 day grace period in which to pay the mortgage before incurring a late fee.  She authorized NYCB to electronically transfer funds from her Bank of America checking account to pay her December 2012 mortgage on Thursday, December 13, 2012, after the 8:00 pm EST cutoff time.  NYCB, following its policies, did not credit Fridman’s mortgage account until Tuesday, December 18, 2012.  NYCB charged Fridman an $88.54 late fee.  Fridman sued NYCB, alleging violation of the Truth in Lending Act (TILA), 15 USC §1639f(a).

Fridman argued that the TILA requires mortgage servicers to credit electronic payments on the day the consumer authorizes the payment.  NYCB argued that electronic payments should be credited when the mortgage servicer receives the funds from the consumer’s external bank account.  The district court agreed with NYCB and granted NYCB’s motion for summary judgment.

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