Settlement
Statement
The Settlement Statement is usually the first document gone over in the closing.
It is also referred to as the HUD-1. When reviewing the Settlement Statement,
always begin with the second page. The second page figures flow over to the first
page of the document. Line 303 on the first page of the Settlement Statement
is the figure your borrower will need to bring to closing. If this figure is
out, one of the first things to check on the Settlement Statement is the 1000 series on the second page of the Settlement
Statement. On the Good Faith Estimate which is obtained from the mortgage company
when the buyer makes application, typically two months of homeowners insurance and two months of property taxes is estimated
to set up the escrow account. Depending on what time of the year the property
closes determines actually how many months are escrowed for taxes as taxes are due and payable in October of each year. Rule of thumb, the Settlement Statement should have been faxed to the mortgage
company for their review and approval before it gets faxed to the agents. If
you see on the fax cover sheet, “subject to mortgage company approval” it means we have not yet heard back from
the mortgage company for the approval. Double check with the title company that
the Settlement Statement is approved, then instruct your buyers to bring a cashier’s check made payable to the title
company in the amount of line 303 of the Settlement Statement.
Termite Letter
When you have the listing, it is usually the realtor who makes the contact to get the termite letter on the property
being sold. Once you have the termite letter in hand, check over it yourself
and always fax it to the title company as soon as possible. Also call the title
company with the name of the termite company you are using and their charge to be put on the Settlement Statement. If the letter states there are no visible evidence of infestation everything is clear. Should the letter state there is evidence of infestation and treatment is recommended and actually does
get treated by the termite company, make sure the letter states the chemical being used for the treatment. Always make sure the termite company is able to get inside the house for inspection. We have had closings where a box on the letter is checked that they were unable to access the house and
the closing had to be rescheduled. Make sure you request the right termite letter
for the appropriate type of loan which is being closed. Government loan closings
use a different type of letter from conventionals. Termite letters are a vital
part of the closing and a closing condition of the mortgage company’s. Be
very careful with them.
Health Letter for Septic Systems
When the property being sold has a septic system, it is usually required the health department do an inspection of
the septic system for the mortgage loan. Government loans always require a health
letter. Conventional transactions usually do not require one unless the appraiser
has seen something when he was at the property appraising the property and asks that one be done. When you receive the health letter, check for any adverse comments and fax it to the title company as soon
as possible. Also call the title company with the health letter charge and who
to make it payable to on the Settlement Statement.
Pay-off Information
Find out as soon as possible if there is a mortgage on a house you are listing.
Obtain from the sellers the name of the mortgage company, their phone number, (usually a toll free number for pay-offs
unless a nearby bank), the loan number, and their social security number. Call
or fax this information in to the title company as soon as possible so they may get a pay-off statement ordered. Some pay-off statements can take up to a week to get.
When you have an estate transaction or one that is a divorce situation, please let the title company know
as soon as possible so they can make the necessary contacts for the closing.
Titled Spouses
When you have a situation that for example, husband bought the house by himself and is now married, the present wife
was never on the title. She would not have to sign the Warranty Deed (the document
conveying title) but it is always good if the spouse can come in for signing.
Homebuyer Warranties
When applicable, call the title company with the name of the homebuyer warranty program and the fee to be put on the
Settlement Statement once you get it.
Association Fees
Condominiums and Planned Unit Development properties usually have homeowner’s association fees. Find out from your sellers if this applies to their property. Get
the name of who handles the association and their phone number. Call or fax this
in to the title company so they can call and get the necessary fees to be put on the Settlement Statement.
Homeowners Insurance
Once a contract has been negotiated and you have the buyers, please advise them to start shopping homeowners insurance
right away. After they have decided on an insurance company, please call the
title company and let them know who will be writing the insurance so they can make the contact to get the premium to be put
on the Settlement Statement. All new mortgages require the first year paid upfront.
Previous Title Insurance Policy for Reissue Credit
When you have a listing, ask your sellers if they have an owner’s title insurance policy on the property. They can receive a thirty percent discount on the title insurance they are paying
for the buyers if their policy is less than ten years old. Not everyone may have
an owner’s policy, but they are usually obtained at the time someone buys their property. It is usually mailed to them a few weeks after closing along with the original recorded Warranty Deed. Make sure they give you an Owner’s Title Insurance Policy and not a “commitment”
for title insurance. Get this to the title company before the title search has
been ordered to receive the title insurance break.
ALWAYS REMEMBER EXECUTIVE TITLE IS JUST A PHONE CALL
AWAY AND ALWAYS READY TO HELP YOU WITH YOUR CLOSINGS!
