Happens To My Transaction After Funding?
the traditional real estate transaction, be it
a sale or refinance of the subject property, it
is the Escrow, the repository for all documents,
agreements and funds, that should direct the transaction,
pursuant to instructions from the parties to the
transaction, buyer, seller, lender, etc.
Title Company takes their instruction from the
Escrow Company at all times. The Escrow Company
opens the initial title order, receives the Preliminary
Report and advises the Title Company as to what
items on the report are acceptable and which the
parties wish removed. The Title Company will then
advise the Escrow as to what items it needs or
what steps might be taken to remove the objectionable
items. When all objectionable matters have been
cleared from the Title Report, and all other contingencies
in the transaction have been met, the Escrow Company
may contact the Lender and request funding. Sometimes
the Lender takes this task upon them and notifies
the Escrow Company, after funding. In any case,
the funds are then transmitted to the Title Company,
normally via wire transfer and are received by
the Title Companys bank. At the time the
funds are requested, the Escrow may authorize
recordation with the Title Company.
the Escrow Company has called to set-up
the recording, the Title Company confirms receipt
documents, funds and statements of information
and transmits the documents to the County Recorder
for recordation. At the same time, the Title Unit
forwards all demands, title fees and taxes due
to the Title Company Sub Escrow Department. Upon
confirmation of recording, the Sub Escrow Department
pays off the demands and taxes and collects the
title fees from proceeds, forwarding the remainder
to the Escrow Company.
Important things to remember
funding requirements with your client as early
as possible. This will allow both the Title
and Escrow Companies to timely assist your client
in clearing some of those last minute
your escrow company changes banks, be sure that
your Title Officer is notified. We have actually
had a couple of instances lately where funds
were wired to a bank no longer used by escrow.
It can be difficult and costly to retrieve these
fund, not to mention the PR damage it can do
to your client relationship.
of information MUST be sent to your title company
BEFORE funding of the loan. The sooner your
Title Officer gets this information, the less
likely you are to have a funding day disaster.
If your transaction involves a credit
line Deed of Trust, review the lenders
requirements for payoff. Most often, this type
of payoff will involve a letter that must be
obtained from your client. Lenders will not
freeze these accounts without receiving
this letter and Title Companies cannot pay off
accounts that are not frozen (Unfrozen
accounts can still be accessed by the borrower).
you have any questions or concerns about post
funding matters, contact your Title or Escrow
officer. When working with knowledgeable and
experienced professionals, and, with a little
patience, most catastrophes can be quickly resolved.
payoffs require that the Lender being paid off
received the entire payoff amount on or before
the first of the month. If your transaction
closes on a Friday, at the end of a given month,
your Title Company will compute and collect
the next months payment as part of the payoff.
The reason for this is that the receiving lender
generally has a cutoff time for
receiving payoff wires. Especially with those
transactions involving payoff of an East
Coast Lender, there is no guarantee that,
even though the wire may be sent out early onthe
following Monday, the lender will receive the
payoff funds before the cutoff time. As an alternative,
you may request that your Title Company hold
this additional months payment pending
verification of the payoff lenders acceptance
of the wire as full payoff of the loan. In this
circumstance, the Sub EscrowDepartment will
confirm acceptance of the payoff and, if accepted,
will forward the funds held to Escrow for disbursement.
IF THIS IS AN OPTION YOU WISH TO EXERCISE, LET
YOUR ESCROW COMPANY KNOW PRIOR TO FUNDING so
that they can then properly advise the Title
company prior to close. We hope that this information
will help you to understand some post closing
procedures and problems that may
occur after funding.
always, if you have any questions, please contact
your Escrow or Title Professional.