Understanding the 7-15 Calendar Day Delay in Mortgage Payment Disbursement

Managing mortgage payments is an integral part of homeownership, and ensuring a smooth process for all parties involved is one of our top priorities. However, you may notice that there is a 7-15 calendar day delay between when we collect your mortgage payments and when the funds are disbursed. This might cause some questions, so we want to provide full transparency as to why this happens and how we can work together to mitigate its impact. 

Why Does the 7-15-Day Delay Happen? 

There are a few key reasons for the delay, and a lot of it comes down to how the modern banking and payment systems operate. 

Reliance on ACH Vendors 

We are not a bank, which means we rely on Automated Clearing House (ACH) vendors to handle the processing of your mortgage payments. ACH vendors are third-party platforms that facilitate electronic transfers of funds. However, unlike traditional banks, ACH vendors adhere to their own processing timelines and rules when handling money transfers. 

These rules add an extra layer of temporary hold time for transfers, which results in a longer processing period before the funds can be made available or disbursed. Essentially, while ACH vendors are reliable and secure, their processing timelines are not instantaneous. 

Differences Between ACH Vendors and Banks 

Traditional banking institutions often have more streamlined procedures for fund availability and transfer speed. ACH vendors, while cost-effective and widely used, have processing timelines that might extend beyond a typical business day, especially when you factor in weekends or holidays. Unfortunately, this difference has a direct impact on when we can disburse funds related to your mortgage payments. 

Non-Bank Mortgage Lenders Face Unique Challenges 

Because we are not a traditional bank, we don’t have direct control over the transfer and fund clearance process. Instead, we must work within the frameworks and timelines set by our ACH vendors. This can sometimes present challenges in ensuring that funds are disbursed as quickly as we would like, particularly when dealing with complex mortgage payment cycles involving additional parties (such as underlying lien holders or lenders or wrap borrowers). 

What Does This Mean for You as a Mortgage Client? 

This 7-15-calendar day delay means that while your payment is collected promptly, it may take a little more time before the funds are fully transferred and disbursed to the relevant accounts, such as any underlying liens or lenders associated with your mortgage. 

While this delay does not necessarily mean negative outcomes, it’s something we believe our clients deserve to understand fully so they can plan and adjust accordingly. 

Steps We’re Taking to Improve the Process 

We are committed to mitigating the impact of this delay as much as possible and making the mortgage payment process more seamless for you. Here are some steps we’re taking to address this issue: 

• Clear Communication 

We’re enhancing the way we communicate with our clients about the delay, including providing upfront explanations like this blog and ensuring you’re equipped with the information necessary to plan your mortgage payments effectively. 

• Payment Timing Adjustments 

For clients who are concerned about the delay impacting disbursements to underlying liens or lenders, we recommend considering moving your ACH pull date to an earlier time in the month. This adjustment ensures payments have enough time to clear and disburse within the required timelines. 

• Proactive Planning 

We suggest considering being a month ahead on your underlying lien or overall mortgage payment. While this may feel like a significant adjustment at first, it creates a helpful buffer that can eliminate any potential stress caused by slight delays or unforeseen circumstances. 

• Ongoing System Improvements 

We are actively working on our internal processes and payment procedures to explore more efficient ways to handle transfers and reduce processing delays without compromising the security and integrity of your funds. 

How You Can Help 

To ensure a smoother process and help us minimize potential delays, here’s what you can do as a mortgage client: 

1. Make Payments on Time 

Timely payments allow us to initiate the transfer process as early as possible, giving your funds the necessary time to clear through ACH processing. 

2. Consider Adjusting Your Payment Date 

If the delay presents a significant concern, moving your ACH pull date earlier in the month can provide more breathing room for the funds to process and disburse before deadlines. 

3. Plan Ahead With a Buffer 

If feasible, being one month ahead on your payments can provide peace of mind and mitigate any potential complications caused by delays. 

Moving Forward Together 

We understand that managing mortgage payments, especially with delays, can sometimes feel challenging. At the same time, we’re here to support you every step of the way. By providing clarity and working together on proactive solutions, we can ensure that the process runs smoothly and continues to meet your needs. 

If you have additional questions or concerns about the 7-15-calendar day delay or would like to explore potential payment adjustments, please don’t hesitate to reach out to our customer service team. 

Thank you for choosing to work with us and trusting us with your mortgage needs. Together, we’ll ensure that your payments are managed in a way that supports your financial goals and keeps your experience stress-free.