Ch 32: Closing the Transaction Flashcards
What happens at title closing?
The buyer completes his or her financing arrangements (referred to as closing the loan). The buyers deposit the down payment and closing costs into escrow.
The seller transfers the title. The sellers pay off any mortgage or other outstanding liens on the property.
Both the buyer and seller pay the necessary taxes, fees and other charges.
If the buyers want to move in early or the sellers want to stay after closing, what advice should the agent give them?
The agent should recommend that the parties consult an attorney to draw up a written, temporary rental agreement that specifies what will happen if any of problem situations manifest.
What can a lender require a borrower to do with regard to taxes and insurance and why would the lender make this requirement?
Lenders can require the borrower to maintain an escrow account for property taxes and insurance, so that the lender is sure money will be available for the payments.
Who is responsible for reporting the real estate sale to the IRS?
The responsibility for filling out and submitting the form generally falls to the person who conducted the closing.
What type of transactions must comply with TRID?
Any closed end-loan secured by real property, including unimproved property.
How do mortgage lenders define a business day?
A business day is a day on which the creditor’s offices are open to the public for carrying out substantially all of its business functions.
What are prepaids?
Prepaids are items paid for in advance, such as homeowner’s insurance and property taxes.
In what section of the loan application would you find if the lender intends to service the loan or transfer servicing to another entity?
Servicing
When must the Closing Disclosure be delivered to the buyers?
At least three days prior to closing
Why is the last line on page 3 of the Closing Disclosure important?
The last line on page 3 is important because it shows how much cash the borrower needs to bring to closing and how much cash the seller will receive at closing.
What information is provided in the Security Interest section of the Closing Disclosure?
The address of the property securing the loan
How does Regulation Z define consummation?
It is defined as the time that a consumer becomes contractually obligated on a credit transaction.
How does a suit to quiet title work?
Borrowers might have to file a suit to quiet title, whereby a judge will remove the fault in the title so that the loan process can move forward.
What is the term given to indicate that a title has a problem of marketability?
Any problem found with either the physical layout of the property or in the title search results creates a cloud
What type of deed is commonly used for transfers within a family and in divorce settlements?
Quitclaim deed
