Funding Process Explained; Why Wet/Table Funding Isn’t Favorable

We have had a string of buyers relocating to California from the East Coast lately, and they are confused about the closing process out here.

For most purchases in California, the loan is not immediately ready to fund after a borrower signs their loan documents. The “funding package” (signed loan documents and escrow conditions) needs to go back to the lender so a designated “funder” can review the package to make sure everything is signed properly and all conditions are adequately satisfied. The “funder” will only wire funds to escrow once she is certain she has a complete file and gets the green light from the escrow company.

This funding review process is lengthy and can take from 1 to 4 days, depending on the lender and file specifications. This is important to understand because so many people think loans can fund immediately after signing.

The reverse of this is when lenders “wet fund” or “table fund”. Wet/table funding means that a lender is expected to have funds available at the time of signing, i.e., on the table, or while the ink is still wet. Some states outside of California require this by law, and it is common practice with lenders on the East Coast. Some consumers think it is favorable, as they no longer must worry about closing after signing.

We think otherwise, however, because it has been our experience that wet or table funding lenders take far too much time to go from submission to doc-drawing. If you are effectively funding at signing, the file must be perfect by the time loan documents go out – so there is no flexibility to move conditions “prior to funding”. Hence, we can close faster with dry funding lenders.

Jay Voorhees at (925) 855-4491
Real Estate Broker, CA Bureau of Real Estate, BRE# 01524255, NMLS# 335646