Unit 14-closing

Question 1

For contract to close

Answer 1

You need agreements met and funding secured

Question 2

Buyer pre closing procedures

Answer 2

Buyers Inspect:

Title evidence 
Seller deed
Removal of liens and encumbrances
Survey
Inspection results 
Leases on premises 
Final walk through

Question 3

Abstract of title

Answer 3

In letter it explains all easements, encumbrances, liens, conditions, restrictions

Question 4

Payoff statement

Answer 4

Calculated to exact amount to payoff existing mortgage

Question 5

The bring down

Answer 5

After closing, 2nd search of title

Question 6

Prior to closing -agent

Answer 6

• Communication with loan officer
• Timeline for title search- closing lawer
• Apprisal
• inspections
• insure all dates are met

Question 7

Seller before closing

Answer 7

• Payment
• Buyer financing
• Compliance with buyers requirements

Question 8

Lender before closing

Answer 8

Pest control 
Reserve account-escrow
Survey
Inspection report 
Title insurance

Question 9

1099-s

Answer 9

Closing must be reported to government

Don’t have to report as income

Seller does it

Question 10

Closing syn

Answer 10

Settlement and transfer
Passing the papers
Closing in escrow

Question 11

Types of closing

Answer 11

Face to face

Escrow closing

Question 12

Escrow closing

Answer 12

Not face to face

Third party coordinates closing for buyer and seller

Question 13

RESPA

Answer 13

• No kickbacks or referral fees (8)
• Need to give options in services(title insurance)-3x the amount fine (9)
• no excessive escrow account(10) 2month payment 1/6 of amount
• has to estimate Good faith estimate along with HUD-1 form

10k fine and 1 year in jail

Federal law
Real estate settlement procedure act

On residential property

First lien mortgage

2nd lien for home equity loan when FHA or FDIC

NOT APPLIED TO:

Business 
Over 25 acre
Construction
Vacant land
Seller finance 
Temp financing 
Agriculture 

Buyers assumption, unless it charges by more than $50

Question 14

GFE

Answer 14

Good faith estimate

3 days after the application is submitted and 3 days before closing

Estimate of what I have to pay at closing

3 types
No tolerance
10% tolerance
Unlimited tolerance

Last page is worksheet to compare information

Question 15

Steamline

Answer 15

RESPA

parts of ABA/CBA ( Affiliated/controlled business arrangements)

Allows you to recommend services

One stop shopping( takes care of multiple things)

Question 16

Uniform settle statement(HUD-1)

Answer 16

Closing statement

Exact cost
Requirement from RESPA

Allowed to see this one day before closing(only buyer can see it at this time. Not seller)

Lender needs to keep HUD-1 for 2 years

Question 17

RESPA summary

Answer 17

CLO regulation- computer loan origination 
CBA/ABA disclosure 
Settle cost booklet
GFE
HUD-1
No kickbacks

Question 18

Debit and credit

Answer 18

Debit amount to be paid

Credit is amount already paid or promised

Question 19

Accrued items

Answer 19

Can be prorated
Will be paid in future

Taxes-accrued
Insurance- pre paid

Question 20

Proration

Answer 20

Divvying up what is owed

Question 21

Closing

Answer 21

When a contract is executed. The gilatine has fallen

Question 22

MDIA - Mortgage disclosure act

Answer 22

Requires loan cost to be disclosed to customers. A GFE is required within three days of application lender must wait seven days after that to close the loan if changes are made another three day wait

Question 23

Mortgage servicing transfer statements

Answer 23

Minimum of 15 day notice if the lender Intends to sell loan.