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Loan Consummation is specifically the date that a consumer has assumed obligations under the contract premised on the loan and that bring so it is pivotal to know that the assumed obligation is towards the creditor. It is the instance where the borrower has signed the forms hence upholding incorporation of the obligations that he or she now owes to the creditor.
The above definition does seem elementary but in spite of that we need to discern between consummation and closing/settlement. Consummation encompasses a scenario where the obligation is owed to the creditor on the loan (by the consumer). On the other hand, if this obligation extends to a seller on a real estate transaction, by way of illustration, then consummation is not apropos here. Section 1026.2(a)(13) is a germane citation in this regard. Comment 2(a) (13)-1 of the aforementioned section prescribed that the moment in time when the consumer takes on the above discussed obligation is contingent upon the state’s legislation. It makes sense for the creditors and settlement agents to corroborate the relevant legislation from the legal system with the objective of determining at what moment in time consummation will occur.
Related Topics: Documents to be signed at closing
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