Borrower Completes Loan Application
The mortgage broker coordinates with the borrower/buyer to complete and submit any loan applications needed.
Borrower Receives Proceeds (if any)
If the loan allows for "Cash Out" and there is money left over after paying off existing loans and all other parties involved in the escrow. Remaining balance is delivered to the borrower. Usually by check. This amount may also be Wire Transferred if prior arrangements are made.
Buyer Takes Possession
Buyer receives the keys as arranged by the real estate agents prior to closing.
Close Escrow and Distribute Funds
Remaining funds are disbursed to pay some or all of the following parties: Title Insurance, Commissions, Fire Insurance, Termite Inspection, Termite Repair, Home Inspection, Home Warranty, Escrow, State or County Taxes, and County Recording Fees. (Final Closing statements are mailed to Buyer, Seller, Borrower, Lender, Agents and Agent Brokers.)
Escrow Notifies the Lenders Funding department that escrow is ready to record as soon as funds are available. Lender funds the loan and Wire transfers the money to Escrow.
The Escrow company selected (usually by the Seller or the Sellers agent, but is negotiable) is contacted and initial information about the transaction is provided to open the escrow. The initial deposit check (sale only is forwarded to the Escrow company as well as signed copies of the Purchase agreement (sale only).
Order Title Search
The property information is forwarded to the Title Insurer selected (Usually by one of the Agents, but is negotiable). The Title Insurer researches the county records for clear title and liens against the property and provides a preliminary title report to Escrow.
Other Parties Paid
Some or all of the following parties: Title Insurance, Commissions, Fire Insurance, Termite Inspection, Termite Repair, Home Inspection, Home Warranty, Escrow, State or County Taxes, and County Recording Fees.
Payoff Existing Loans
Loans to be paid off (and that have provided demands promising to clear any lien against title to the property upon receipt of the specified amount) are paid at the same time as recording of the new deed and note.
Prepare Escrow Instructions
Escrow instructions specifying the details of the transaction and authorizing the actions required by escrow are written and delivered to all parties and their agents.
Prepare Loan Docs
Lender prepares the Note, specifying the rate and terms and promise to pay, and the Deed, which gives title to the lender, and all of the necessary legal disclosures that must be signed and received by the borrower.
Provide Final Deposit
Any remaining funds needed to balance the escrow need to be submitted to Escrow. These need to be "Clear Funds" before the transaction can record. The quickest and best way to provide clear funds is with a "Wire Transfer". Cashiers checks and personal checks must be clear both the sending and receiving bank prior to recording. This can take several days.
Provide Loan Documents
Lender sends an electronic copy of the Loan Documents to Escrow, or a third party signing agent. Two copies are printed out. One for the Buyer/Borrower to keep, and one to complete and return to the lender.
Receive Payoff Demands
Lenders to be paid off must provide an amount to be paid (by a specified date) to completely pay off their loan, and release their interest in the property. Usually they will include a "per diem" or per day amount to pay for each day after the specified date. (The amount will include interest and any penalties or early termination fees.)
Record Deed and Note
The Deed and promissory Note are recorded at the county recorders office. This officially completes the transfer of ownership.
Request Payoff Demands
For each loan/account identified to be paid off through this transaction, a request is made to provide a final amount to be paid to completely payoff the indebtedness and release interest in the property. The more detail provided about the loan, the easier it is to track down the correct lender contact to notify.
Review File for Completion
Verify that all required documents have been signed/completed/received/submitted to be able to complete this transaction successfully. This includes Escrow instructions, payoff demands, Deeds, Notes, Termite inspections and clearance, property insurance, lenders instructions, and deposits
Review Preliminary Report
The preliminary title report includes information on existing liens against the property and current title holder. Verify the names of the sellers match, and that all liens are scheduled to be paid off or transferred to the buyer.
Sign Escrow Amendments
Sign final amendments to the escrow instructions. These usually include an amendment accepting the lenders final Interest Rate and loan terms, accepting the Preliminary title report, accepting any termite report and work performed, and that everyone is ready to complete the transaction.
Sign Escrow Instructions
Both parties sign the escrow instructions, which authorize and request the escrow holder to perform the tasks outlined in the flow chart.
Sign Loan Documents
A signing service notarizes the deed, note and any other required documents submitted by the lender. The signing service also makes sure that all necessary signatures and acknowledgments are completed. This process usually takes 40 minutes to an hour and is done at the escrow office unless other arrangements are made.
Submit Loan Documents
The escrow officer reviews the signed loan documents for completion, copying and packaging the appropriate sections to be submitted to the Lender, Mortgage broker, and Title Insurer.
Transfer Documents to Title
The documents to be recorded are forwarded to the Title Insurer. They will review them and schedule them to be recorded at the County Recorders office when escrow is ready.