Understanding The Escrow Closing Process By: Johnna Wright
My buyers always get confused and excited at the same time when getting close to closing escrow. There is a lot going on at this time and it can be hard to understand it all, so when you are close to closing please refer back to my Blog and these frequently asked questions.
What is a HUD 1, and why is my lender always saying they need this HUD1 before they can order Docs??? The HUD 1 is the document that summarizes all the costs from the lender to generate the loan, this includes what your closing costs will be and will show any credits or contributions from the Seller, if any, and Escrow costs. This is the final document that needs to be signed off (approved) by the Seller and delivered back to Escrow before the docs can be ordered by the lender!
What happens and what does it mean when my lender tells me they have ordered Docs? This means that they have requested your final loan documents and are waiting for all the loan documentation to be compiled and emailed to them from their internal loan document department. When the documents arrive they will typically be reviewed by the loan officer or processor and escrow to verify that everything is correct. Once Escrow has received the Lender Documents, they typically require 24-48 hours to review the documentation and prepare all of the additional documentation required internally by the Escrow. Escrow will then call you to schedule an appointment for you to come in to their office and sign all of the required paperwork. Feel free to call Escrow to get your appointment scheduled so they know you are in a rush to sign! They may not schedule you at the time you call, but they will have you on top of the list to call and schedule you in the time-frames you have provided them when they are ready! Typically, loan documents are signed at the Escrow office, however sometimes a signing may be scheduled at your lender’s office or another location of your choosing – when this occurs the services of a mobile notary are required and there is typically an additional expense for their services. 
What happens after I sign my loan documents, and how much longer do I have to wait? You must make arrangements to wire your funds to close after you sign your loan documents, if you have not done so already. Once the documents are signed, they are sent back to the funding department for review. This typically takes 24 to 48 for review and the satisfaction of any prior to funding conditions – these can include a verbal verification of employment and proof of homeowners’ insurance. Once all conditions are satisfied and signed off, your lender can set up the file for Funding! Once Escrow gets confirmation of the funding then Escrow can set your file up for Recording. Both of these processes can take 24 to 48 hours.
What do you mean Funding and Recording – I just want my Keys! Once the Lender receives the loan documents back from Escrow they must Fund the loan, which means that the money you are borrowing is electronically transferred to Escrow. When they have confirmed receipt of all of the money required to complete your purchase they will arrange with the Title company to record title to your new home in your name. This will typically occur the following day. In Riverside County the county recorder’s office only records documents once per day – in the morning – on Monday through Thursday. On Fridays and the last day of the month, the recorder’s office records documents a second time – in the afternoon. This allows for properties that fund in the morning on those days to record in the afternoon – as long as all of the paperwork is prepared and Escrow knows that you are requesting a “Special Recording”. You may not receive your keys until everyone has confirmation from Escrow that everything was finalized and Recorded properly. No Funding or Recordings will occur on the weekend because escrow and the County Recorder’s office are closed.
Why should I change the locks on all the doors, it’s expensive and I have spent enough money purchasing the home? This is to protect your new home and your belongings. Homes listed for sale, particularly REO properties, have a lot of agents and contractors in and out of your home many with their own key, the previous owner and/or tenant may still have a key to the home as well. Once you close escrow you want to control who has access to your home, changing the locks guarantees that you control who has access to your home.
Congratulations on purchasing a new home and remember closing escrow is only the end of the beginning of your life in your new home!
Feel free to contact me!
Johnna Wright
Johnna@rers.org
