VA Loans
Fixed rate loans guaranteed by the U.S. Dept. Of Veteran Affairs. They are designed to make housing more affordable for eligible U.S. veterans.
- VA loans are available to veterans, reservists, active-duty personnel and surviving spouses of veterans with 100% entitlement.
- Eligible veterans may be able to purchase home with no down payment, no cash reserve, no application fee and lower closing costs than other financing options.
Escrow Instructions
Describe escrow’s role and responsibility during the transaction to the borrower.
Packaging tip: Escrow gets back original instructions. Lender gets copy.
Escrow Amendment
If there are any changes made to Escrow instructions, they are made via escrow amendments. Let’s say loan amt./purchase price changed since original escrow instructions went out; Escrow amendments would change what was originally signed.
Packaging Tip: Escrow Amendments - Escrow gets original copy, lender gets copy
Closing Statement
Closing statement is the document that brings together all of escrow, title and lender’s fees and puts them on one document for the borrower to see and approve. Being that escrow is the third neutral party, they create the closing statement.
Purchase Contract
The contract between the buyer/seller on the terms of the sale.
Packaging tip: Escrow keeps original for records, lender gets a copy
Receipts
Home buyers are required to put down a monetary deposit to open escrow. It shows the seller that the buyer is serious about buying the home. Escrow will show proof of this deposit via a receipt (aka proof of deposit).
Packaging tip: Since deposit starts w/ down payment, lender wants a copy, escrow keeps original.
Payoff (purchase)
The payoff in a purchase transaction is the same as payoff for a refinance. It shows how much someone owes on a current mortgage. However the reason why it is ordered is different on a purchase.
In a purchase, the payoff is ordered to show what the seller owes on the house that they are selling. Therefore the buyer never sees the payoff; it is acknowledged by the seller approving that they want escrow to pay off their balance owed.
Termite Report
Report that tells homeowner and lender if there are any termites found on the property.
-If there are; a termite clearance is needed to show that the problem areas have been fixed/addressed.
Escrow is required to have termite report on file.
Lender’s instructions
Lender’s instructions, Aka Closing instructions,
are typed out instructions to the escrow and title companies from the lender on exactly how the lender wants their loan closed. The borrower and escrow officer usually sign the instructions acknowledging them.
Packaging tip: Lender gets original back. Instruction copy goes to escrow company as well as title company
1003 Loan Application
In mortgage industry, a loan application is called ten-oh-three. Called by the form #.
Packaging tip: Borrower signs which means lender gets original. Escrow gets a copy.
Notice of Right to Cancel
In a refinance transaction on a primary residence, borrower gets 3 business days (not including Sundays + Holidays) from the day they sign loan documents to cancel the loan if they want. This law cannot be waived.
Packaging tip: Lender cannot fund loan until this time period has passed.
Closing Disclosure
Aka CD
- Replaces what they used to call “the truth in lending form.”
- Informs borrower about everything pertinent (relevant/applicable) ab the loan. (ex. total interest over 30 yrs, all cost associated w/ transaction).
4506
Borrower signs this form to give permission to lender so the lender can request and receive a copy of the borrower’s taxes that are filed with the IRS.
Subordination Agreement
When a loan is in a subordinate position (2nd, 3rd, 4th), a subordinate agreement tells everyone the loan in the subordinate position stay in the same lien position, although lien above it has been paid off.
- Allows new lien holder to go into the newly empty 1st position
- Example: Someone refinances a first, but there’s also a 2nd property, new lender will only approve loan if loan goes into 1st lien position.
Insurance
- Refers to borrower’s homeowners insurance or aka Hazard insurance.
- Covers anything that may happen to the home (fire, flood/anything damaging to structure of house)
- Escrow job to make sure borrower has insurance for home.
Power of Attorney
(aka attorney in Fact)
-When someone has given authority to sign on their behalf
ex) spouse whose in military & deployed, might give
spouse power of attorney to sign loan docs
-packaging tip = county gets original, lender gets copy
Grant Deed or Quitclaim Deed
- Changes the way property title is held (from a buyer/seller or changing how title is currently being held).
example) someone got married & was adding spouse to property or someone putting their house in a trust.
P.C.O.R.
Stands for: Preliminary change of ownership report
- > Helps county understand what’s going on w/ the grant deed or quit claim deed.
- > PCOR only gets filled out if there is a grant deed/ quit claim deed.
ex) transfer between spouses bc removal of Trust
Insurance Information Sheet
This is where borrower lets escrow know what insurance company that they use. Insurance company name, policy #, insurance agent’s name and phone number.
Disbursement of Proceeds
If borrower is due refund from closing this tell escrow how they would like to receive it. This is the form that tells escrow whether they want to pick up the check at escrow, have it mailed/FedEx or wire.
If this is not filled out then escrow will not know how to give the money to the borrower.
Borrower Information Sheet
Form that gives escrow all the info they need to open up escrow. The current payoff, whom they owe and how much, any private liens, HOA info and/or insurance info.
Payoff Demand
(AKA payoff statement)
- shows what borrower owes their current lender
- Escrow is responsible for ordering the demand from current lender + present it to borrower for approval to payoff whatever the payoff states they owe.
Packaging tip: Escrow keeps original, lender gets a copy (in a refinance transaction)
-Title company records liens so they too get a copy of the payoff to title
Statement of Information
Aka the “S.I.”
-Application for title insurance
Packaging tip: Title company gets original copy back, Escrow gets a copy.
