Loan Closing

A mortgage loan application generally does not reach the closing department unless an underwriter authorizes the closing by clearing outstanding conditions and 'signing off' on the loan to close. What does this mean? Well, all those who were holding a collective breath can relax a bit because the loan approval process was a success. This means that they will all soon be seated at a closing table reveling in what has been a successful transaction; But; there is a reason to slow down here just a bit. The closing department must coordinate with the borrower(s) and/or borrower's attorney in order to schedule a closing date

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Closing a mortgage loan really consists of one important step between the underwriting department and the closing table. The lender's closing department is the place where a loan application undergoes final checks for items pertinent to the closing. The closer must ascertain the presence of a hazard insurance policy with adequate enough coverage, a new survey if necessary - and if not necessary - a survey inspection and/or survey reading, a satisfactory title report complete with adequate mortgage insurance coverage, endorsements, and most importantly, the true owner(s) of record as reflected in the title report has to be consistent with the purchase contract, application docs and everything in the loan file relevant to property ownership.

I must point out here that reports providing title, appraisal and credit data must be made part of the file while still in processing so that they are underwritten, but the closer still has a responsibility to make sure nothing has changed that may have a negative impact on the loan; in such a case it would be returned to underwriting for a decision to proceed or not, depending on the particular situation. Absent any such problems, when the lender's closer determines that everything is in order, he/she schedules a closing date & time agreeable to all parties involved in the closing (buyer, seller, their attorneys, the title closer and the lender) and a closing finally takes place.

The contents of traditional mortgage closing rooms - or offices if you like - are a twelve foot long table complete with eight to ten chairs surrounding it, several receptacles filled with various paper clip items and ink pens; there may be a calculator or two; and at least one telephone. The telephone in a mortgage closing room is as important as the table and chairs and may be more important because documents can be signed in just about any spot in the building, including the floor; but that title closer must have a phone in order to make sure that all outstanding liens against the subject property are either paid up to date or will be paid to the lien holder's 'satisfaction', who in turn will issue appropriate documents as proof that the debts are satisfied.

Since the title company - hired by the borrower's attorney to insure a client's good title to the property - will insure a purchaser's ownership rights as well as a mortgagee's (the lender) legal claim (the mortgage), the title closer has the unenviable task of verifying, confirming and certifying all documents, figures and instruments relating to an ongoing mortgage closing in order to present a clean "bill" to the parties before the closing is declared complete.

Every title closer I have known throughout my thirty year career carried a valid notary stamp and freshly inked pad. It is their stock in trade. When a title closer receives checks satisfying items on the title bill, chances are that the numbers have all been crunched, the lender's stack of documents are in order, the seller (in the case of a real estate transaction) is relatively happy (there may have been price adjustments), the borrower is nervously happy (what a debt to be repaid), and the lawyer(s) have left their clients with instructions to "contact my office" if you have any problems or concerns.

When a mortgage loan application ends with handshakes and well-wishes among parties to the transaction, it is considered to have been a success by all those who had a part in the process. The mortgage loan officer successfully originated, the processor successfully processed, the underwriter successfully underwrote, the lender's closer successfully navigated the loan to a closing table, and the principals were successful in accomplishing what they set out to accomplish. Is it an easy process? absolutely not! Is it worth the extra time to get it right? What's your opinion?

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