03.23.07
What’s Happening with Uniform Closing Instructions?
The Mortgage Bankers Association (MBA) touts that ALTA is working in conjunction with the MBA on Uniform Master Closing Instructions. But ALTA makes no mention of the initiative on its web site, and the MBA has removed the draft from its site. What is that all about?
Having read the MBA draft of Feb 2006, I was VERY concerned about the liability and unreasonable demands the MBA was trying to push onto closers and title companies. For example:
Uniform Closing Instructions Draft by Mortgage Bankers Assoc. Feb 26, 2006
• 32 pages of General Closing Instructions
• 6 pages of Specific Loan Instructions
• 78 Specific Requirements and Indemnities from Closing Agents
• Significant new liability for closing agents
Settlement Agent must immediately contact Lender and postpone Closing or Disbursement of the Loan until Settlement Agent receives permission to proceed if:
o The Property has been conveyed within 6 months preceding Closing
o The new Loan represents an increase of over 25% of a previous Security Instrument recorded in that same time period.
o If any real estate sales commissions are excessive for the market area.
I think many of the draft items are unreasonable! I’d love to hear what YOU know about the Uniform Closing Instructions. It feels like a cover-up to me…
Robert Franco said,
March 28, 2007 at 2:33 pm
Uniform Closing Instructions sound like a good idea on the surface. I know that some of the lenders I have worked with have had some pretty complex and seemingly arbitrary instructions. When you get a first order from a new lender, it can be a real pain to wade through all of the fine print.
However, they have to make sense. It is sad that the closing docs are more than 32 pages - the instructions should only be one or two. If you need more than that to explain what is expected of your settlement agent, then you should probably be using a more knowledgeable agent.
The title agent should be well trained and understand what must be done to properly close the loan and ensure that the mortgage is a valid and first lien on the properly. Perhaps these complex closing instructions are really intended for notaries who provide “signing services.”
In any regard… uniform instructions would be welcome if they were drafted with a little common sense.
Jeanne said,
March 28, 2007 at 4:59 pm
I completely agree. I just wish the MBA was a bit more forthcoming with what is going on. I would be TERRIFIED to close, based on the draft I have seen. There is just WAY TOO MUCH RESPONSIBILITY laid on the closer and closing company. We do not get paid to cover such things as “excessive real estate commissions.” I don’t even know what that means?! 6%, 7%, 10%??