The buyer’s lender obtains the new loan for the buyer. The Buyer’s lender is responsible for:
- Taking loan application, pulling the buyers credit and verifying all funds necessary for the loan
- The loan officer usually gives the loan to his processor to gather all information needed for the file
- The Lender orders the appraisal
- The processor then puts the loan together in a file called “the package” to submit to the underwriter(s) or they submit electronically to the underwriter or underwriting program
- The underwriter reviews the file and make sure that it conforms to the guidelines of the bank or mortgage company
- After the file is underwritten, it is given conditions, either prior to document conditions or prior to funding conditions
- The lender must get these prior to document conditions to the underwriter to be signed off so that loan documents may be drawn up
- Once the loan documents are drawn up, escrow picks them up and prepares them to be signed by the buyer
- The buyer needs to have the documents signed and notarized along with anything else that escrow may need signed for their file or for the lender
- Escrow sends the loan documents back to the lender/funder so that they may review them and make sure that all of the prior to funding conditions are met
- They then fund the loan
- Escrow releases the documents to be recorded at the County Recorders office
- Once we receive confirmation of recording that is when we acknowledge that the escrow is closed
- Escrow is the neutral third party in the transaction that holds onto legal documents and to the monies of the transaction on behalf of the buyers and sellers.
- Many escrow companies do type up their own escrow instructions called Supplemental Instructions, since the Residential Purchase Agreement act as Escrow instructions as well. The Escrow will send out separate Escrow instructions to both the buyer and seller. The Escrow will order the HomeOwners Association documents and send them to the buyer as well.
- The Escrow will follow up on any cloud on title noted on the Preliminary 1′ltle report and order any demands necessary, such as the Demand for Payoff for any loans on the property, demand for any taxes such as property taxes, and for any judgments that may appear on title. They will also draw up the Grant Deed in order to convey the property from the seller to the buyer and put the correct Buyer Vesting on the deed. They can also draw up any Power of Attorney that may be needed for a transaction. They can also draw up any Quit Claim deeds or Inter-Spousal Deeds that may be needed for any specific transaction.
- Escrow works with the lender as well, as they do an accommodation signing of the loan documents for the lender. The lender will send over the loan documents with Lenders Instructions that give Escrow the information regarding the loan, such as when the documents expire, what the rate is, what conditions they are looking for to be returned with the loan documents. Then Escrow has a Notary meet with the buyer and has the loan documents signed along with any thing else that escrow may need for their file. They will order the insurance for the new buyer at this time because they will need the loss payee information that is on the loan documents. They will process the documents once they have been signed and send them back to the loan funder with any conditions for loan that have been requested.
- Escrow will also do an Estimated Cost sheet for the Buyer to let the Buyer know how much money they will need to bring in to close the escrow. They also do an Estimated Net sheet for the seller to let them know how much the seller will be receiving out of the escrow. It is good to have the agent review these estimates as they can see if any items are missing such as credits.
- Once escrow is ready to close and the loan documents have been reviewed by the lender, the lender will Contact escrow with an amount that escrow should look for in their account which is called the funding figure. This is the amount of the wire that has been sent to fund the loan. Once the wire amount had been received by escrow then escrow will inform the Title Company to release the Deeds to be recorded. Once we have received confirmation that the deeds have been recorded, this is when out rile is closed.
- Escrow will balance out the file with all the credits and debits to each party and pay all bills of the escrow and issue checks for the escrow, including the commission checks.
- Escrow does play a very important role in the transaction as they do touch all parties of the transaction, if not directly then indirectly. They are in contact with the buyers and sellers, making sure all the paperwork for the escrow comes back to comply with the terms of the contract.