With lenders backed up and stymied by regulations, we often end up in “rush situations” around closing time. Our borrowers are often caught off guard when they are asked by escrow to rush to sign a pile of loan documents on a moment’s notice to foster an on-time closing.
To avoid “surprises,” we now send out the below “What to Expect” email in regard to signing and closing. It helps tremendously with respect to our borrowers’ understanding of the process. We recommend saving it and sharing it often.
Drawing Loan Documents/Signing/Wiring Funds/Closing Loan/What to Expect:
- LENDER 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 after all conditions are signed off.
- ESCROW PREPARES LOAN DOCUMENTS OR “SIGNING PACKAGE”: Once loan documents are drawn, the lender then 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.
- 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.
- 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.
- 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.
- LENDER REVIEWS FUNDING PACKAGE AND FUNDS LOAN: When the lender receives the Funding Package, they will thoroughly review it to ensure ALL of their funding conditions are met. This can take from one to three days depending on how backed up the lender is. The only exception to this “Funding Package review process” is with Citi Mortgage, as they “table fund”. This means that they commit to a funding date once they draw loan documents no matter what. Once a lender agrees to “Fund a Loan,” they wire all loan proceeds to escrow.
- 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.
- 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.
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167