Loan Docs to Title Company
Once we have full sign off or “cleared to close” status, our funding department creates the paperwork for the borrower to sign. The paperwork is sent to the title company for signing. The title company in Oregon and Washington also doubles as the escrow service (in California, and some other states these services are separate. Many states use real estate attorneys instead of escrow officers). The escrow officer or “closer” prepares the mortgage note, the deed of trust, and the final HUD statement based on the lenders instructions.
The borrower will re-sign everything they have already signed up until now. The initial disclosures will all be reprinted for an actual notarized signature (notarized by the closer). The aforementioned note, deed of trust, and HUD will all be signed and explained to the borrower again at this time.
If it is a purchase, or a refinance that requires a principal curtailment, the borrower would present whatever funds the transaction requires to this signing appointment. All funds will be written as paid to the title company for deposit into the escrow account. The escrow account is simply a temporary bank account, through which all the related funds are funneled for the purpose of a transaction.. The buyer pays all monies INTO the escrow account, and the seller receives all monies OUT of this account.
The escrow officer/closer acts as kind of a “referee” for a transaction. They make certain that both buyer and seller are completely satisfied prior to transferring the funds from one party to the next. And they also make certain that all existing liens are fully paid off to make way for the new mortgage to take 1st lien position upon funding. In a refinance, the closer pays off the current loan to make way for the new mortgage.