Disclosures need to be signed when we submit a borrower’s loan to our underwriter. Disclosures include the loan application, the interest rate, the closing costs, and other forms to comply with our industry’s many regulations. These forms are not binding in any way, they can be signed anywhere, and we do not need originals. Faxed or emailed copies are fine.
Closing Disclosure or CD After a loan is formally approved by an underwriter, borrowers will be sent an additional disclosure known as the CD that must be acknowledged or signed electronically before lenders can draw loan documents (in most cases). The CD is similar to the initial disclosures and it is sent to ensure closing costs have not changed significantly. It is also not binding, and borrowers are not allowed to sign loan documents until three business days have passed from the signing of the CD.
Loan Documents will be emailed to the escrow/title company by our documents drawer after the loan is formally approved and after ALL conditions are met. The escrow officer receives the lender’s loan documents and prepares them for signing. This is a lengthy process that requires working out all the numbers including interest, property taxes, hazard insurance, lender fees, remaining down payment funds, etc. Once the “signing package” is ready, the buyers will go to the escrow office or title company to sign all of the loan documents. This too is a lengthy process because there are so many forms to sign. Buyers typically wire their remaining funds or “cash to close” on the day they sign.
The Funding Package consists of the signed loan documents and all other necessary documents prepared by the escrow officer after the borrowers have signed. The funding package needs to go back to our funding department (typically via overnight mail) so our funder can review everything to ensure the file is complete and ready to fund. Lenders “fund” loans by wiring money or loan proceeds to escrow once they are satisfied that all final funding conditions have been satisfied.
The Recording of the deed of trust (or mortgage) and the grant deed (which transfers title to the new owners) typically takes place at the County Recorder’s Office the day after a loan funds, as mentioned above. This is when buyers formally become owners of their new home. Their names are on “public record” as the legal owners of the property they just bought.
The Closing Process of Receiving and Preparing Loan Documents (by Escrow), Signing Loan Documents (by Buyers), Funding the Loan (by Lender), and Recording (by Escrow) takes three days at best, and sometimes over a week.