RE07R25: Closing and Settlement

The objective of this class is to assist licensees in understanding the “life Cycle” of a real estate transaction and the requirements under RESPA section 8.

Role of the Closing/Settlement in the Real Estate Cycle:

Listing, Showing, Offer and Acceptance, Purchase & Sale Agreement, Home Inspection, Financing & Appraisal, Title Search, Closing/Settlement

1. RESPA -Real Estate Settlement Procedures Act
   1. History
      1. RESPA Concerns & Possible Violations
      2. TIL (Truth in Lending)
      3. TRID (TILA RESPA Integrated Disclosure)
         1. Loan estimate
            1. Closing disclosure
            2. Definition of an Application
2. Steps to Prepare Your Clients for TRID
   1. CFPD Consumer Financial Protection Bureau
3. Sellers Closing Cost and Responsibilities
   1. Deed
      1. Quitclaim deed
         1. Warranty deed
      2. Land Court Title/Registered
      3. Real Estate Commission
      4. Municipal Lien Certificate (MLC)
      5. Prorations of Water, Sewer & Taxes, fuel etc. (math examples)
      6. Recording Fees
         1. Discharge of Mortgage                 
            1. M.L.C.
      7. Sellers Attorney Fees
      8. Mortgage Payoff
         1. Wiring or Overnight Payoff Check
      9. Urea Formaldehyde Foam Insulation Certificate (UFFI) Certificate / Lender Requirements
      10. Smoke Detector/Carbon Monoxide Certificate
      11. Excise Tax Stamps
      12. Title V (if applicable)
      13. Lead Paint Forms
      14. Certificate of Occupancy
          1. Order of Conditions / Board of Health
      15. Condo
          1. Condo Documents / Master Deed, By-Laws, Rules and Regulations, Master Insurance,

                      Minutes of last meetings, Budget

1. 6D Certificate
   1. Condo Reserve Fund
      1. Title V (shared system)
2. Buyers Closing Costs and Responsibilities:
   1. Real Estate Commission*
      1. Home Inspection costs
         1. Lead Paint
            1. Radon
            2. Pest
      2. Bank Application Fee
      3. Appraisal Fee
      4. Plot Plan
      5. Financing Points
      6. Fuel Adjustment
      7. Buyers Attorney Fees
      8. Insurance & Tax
         1. Flood Insurance *
            1. Private Mortgage Insurance (PMI)
            2. Home Owners Insurance (HO6 Insurance in a condo)
            3. Title Insurance (lenders and owners)
            4. Tax Escrow
      9. Bank Attorney Fees (Title Search)
      10. UFFI Certificate / Lender Requirements
      11. Recording Fee
          1. Mortgage Deed
             1. Mortgage Note
      12. Condo
          1. Advance Condo Fee
             1. Condo Reserve Fund (transfer or assign)
                1. Master Insurance Policy                 
                2. By-Laws & Rules and Regulations
3. Documents at Closing:
   1. Deed
      1. Mortgage
      2. Mortgage Note
      3. Mortgage Discharge
      4. Municipal Lien Certificate
      5. Attorney Certification of Title
      6. Closing Disclosure
      7. UFFI Statement, Flood Certification
      8. Plot Plan
      9. Insurance Policy / Binder
      10. Lead Paint Certification
      11. Smoke Detector / Carbon Monoxide Certificate
          1. Certificate of Compliance
      12. Loan disclosure/Closing disclosure
      13. Affidavit or Amendatory of Purchase & Vendor
      14. W-9's
      15. Application Form
      16. Commitment Letter
      17. Title Insurance
          1. or Probate Properties and Death Certificate or Power of Attorney and Power to Sell IRS
             1. Estate Liens (consult attorney)
             2. Condo
4. Closing Disclosure Replaces Settlement Statement:
   1. Sellers Closing Disclosure/ Buyers Closing Disclosure
      1. Recommended for class / case discussion
      2. EXCEPTION- Cash sales can still use the standard HUD 1 closing paperwork
5. Broker's Role and Impact on the Closing Process at the Following Stages:
   1. Listing
      1. Showing
      2. Offer
      3. Purchase and Sale Agreement
         1. Short Sale Addendum if necessary / if third Party Approval Required
      4. Home Inspection
      5. Bank Application and Approval
      6. Bank Appraiser
      7. Bank Attorney (Title Search)
      8. Walk thru (Buyer Agent and Buyer)
      9. Scheduling of Closing
         1. Utility Transfer
            1. Seller calls their Insurance Company to cancel
6. Closings
   1. Currently considered a Hybrid closing in MA
      1. Massachusetts does not recognize e-notaries
         1. Wet print the notary docs and upload

Suggested Handouts and Resources

1. Loan Estimate             
2. Closing Disclosure
3. CFPB website
4. RESPA- FAQ