Educating borrowers and Realtors throughout the entire purchase process is essential to foster a smooth transaction and to prevent unnecessary surprises.
The below is an email we send every time we order loan documents. It does wonders for our borrowers, and it is information everyone involved in the purchase process should understand.
This is just a brief explanation of how the closing process works so you are not caught off guard if Escrow calls you to sign loan documents on a moment’s notice. Please pay careful attention to #8, as we often fall into “Rush Situations.”
1) LENDER/DOC DRAWER DRAWS LOAN DOCUMENTS: As soon as we get all of your Loan Conditions signed off by the underwriter, we will order loan documents. It can take from 1 to 3 days to get loan documents drawn by the lender/doc drawer after all conditions are signed off.
2) ESCROW PREPARES LOAN DOCUMENTS OR “SIGNING PACKAGE”: Once loan documents are drawn, the lender emails them to the Escrow officer who prepares the “Signing Package”. This is a very involved process that requires her to prepare all necessary documents, and to figure out interest, property taxes, hazard insurance, all fees, commissions, remaining down payment funds, etc.
3) BORROWER SIGNS LOAN DOCUMENTS: Once the “Signing Package” is prepared, the Escrow officer is ready to have you sign all of the loan documents. This too will take some time, as there are so many forms to sign in today’s lending environment. You will probably sign at the Title/Escrow Company. If going to the Title Company is too inconvenient, we can arrange to have a mobile notary go to you, but this often delays the closing date.
4) BORROWER WIRES FUNDS TO ESCROW: Escrow will typically have you wire your remaining funds to escrow after you sign. The escrow officer will give you the exact amount of remaining funds or “cash to close” that needs to be wired.
5) ESCROW PREPARES “FUNDING PACKAGE” to SEND BACK TO LENDER: After you sign all of your loan documents, the Escrow officer will prepare a “Funding Package” to overnight back to the lender.
6) FUNDER REVIEWS FUNDING PACKAGE AND FUNDS LOAN: When the Funder receives the Funding Package, she will thoroughly review it to ensure ALL funding conditions are met. This can take from one to three days depending on how backed up the lender is. Once a lender agrees to “Fund a Loan”, the funder wires all loan proceeds to escrow.
7) ESCROW RECORDS DAY AFTER LENDER FUNDS: When escrow receives the wire, they “release” the deed of trust (the mortgage) and the grant deed (putting your name on title) to record at the County Recorder’s Office the next day. “Recording” means that you are on public record as the “owner of the house”. You get your keys once Escrow gets confirmation that the recording is done. This is usually about mid-day.
8) WHAT TO EXPECT IN “RUSH SITUATIONS”: Rushing the process is common, as lenders get backed up and buyers and realtors want to close on time, so timing often becomes critical. In these situations, you will sometimes be asked to drop everything and sign documents with relatively little notice. This is b/c lenders often cannot tell us exactly when loan documents will be emailed to Escrow, and we are not able to contact you until the documents are actually emailed. The key in these situations is to try to sign the loan documents early enough in the day to allow Escrow to have time to get the Funding Package into a Fed Ex or overnight drop-off before the cut-off time. This often means signing no later than 4 PM or so.
Please call or email as much as you’d like if you have any question at all about this process.
Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646
