The process starts with a real estate buyer with a property under contract. Once the settlement agent or closing attorney has been retained by the mortgage lender the begin the “title work.” That is the examination of the chain of ownership or chain of title to the property. This examination discloses the history of owners and lien holders on the property and helps the closing attorney to ensure that the buyer receives good clear title to the property and that the seller actually owns the property.
The closing attorney will also assist the lender to make certain the certain conditions of the mortgage loan are met. Like having the property insured for the proper amount of homeowner’s insurance or “hazard” insurance. The closing attorney will also help the lender and borrower meet conditions of the loan that are related to the title to the property, such as providing accurate real estate tax information.
Adjustments for items that are agreed to between the buyer and seller, such as credits for rents, utilities and closing cost credits, are provided to the closing attorney to be accounted for at closing. Real estate agents will provide their commission statements to the closing attorney to be paid at closing.
If required by the mortgage lender the closing attorney will arrange to obtain an “mortgage survey” or “plot plan” for the property.
Once the closing attorney has obtained all of the figures, and has the figures provided by the parties, they will produce a settlement statement (or HUD statement) using those figures and the closing cost figures provided by the mortgage lender.
Documents that are required to be signed by the buyer are provided to the closing attorney by the lender. The closing attorney will coordinate the signing of the settlement statement and loan documents (note, mortgage and disclosures) at the closing.
Once the settlement statement is complete and approved and documents are signed the lender will fund the loan and provide the money to the closing attorney for disbursement according to the settlement statement.
The closing process is complete with the recording of the deed, mortgage and other required documents by the closing attorney.