Ask the Experts: Closing & Escrow

TRUE OR FALSE: A loan statement showing the amounts deducted from the face amount of the loan, received from the lender to a transaction, is all that is necessary for the closer to disburse the lender's funds when they are deposited.

FALSE!  The closer must also have written closing instructions detailing:

  • The documents that are to be recorded
  • Any other documents the closer is to collect from the borrower
  • The type and amount of the loan policy to be issued (or a statement that a policy is not required, if that is the case, which it sometimes is!)
  • Any required endorsements
  • Any conditions to be met prior to closing
  • Delivery instructions for the recordable documents and loan policy

In addition the closer must have (usually received by email):

  • Lender's approval of the disbursement statement
  • Final approval to close

Ask the Experts: Construction

TRUE OR FALSE: Title companies analyze three different points when a lender is seeking construction coverage: (1) contracts let prior to closing; (2) contracts which will be let subsequent to the closing but paid for out of the proceeds of the insured mortgage; and (3) how much of the loan will be disbursed at closing.

TRUE!  One of the more complex and confusing issues that can rear its ugly head at a real estate closing is that of the existence of past, present, or, in some cases, future contracts for construction on the land. These contracts can create headaches for owners, purchasers, lenders, attorneys, and title insurers if the issues surrounding these contracts are not dealt with prior to closing. Check out our article, "Construction Issues at Closing: A Title Company's Perspective" which will help identify construction issues that arise at closing and how Chicago Title Insurance Company deals with these issues.

Ask the Experts: Title

TRUE OR FALSE: Lien claimants no longer have rights or claims to a subject property once the property has been sold to a new owner(s) and a deed is recorded.

FALSE!  Real estate has traditionally been a family's most valuable asset. It is a form of wealth that is protected by many laws. These laws have been enacted to protect one's ownership of real estate and the improvements located on the land. The owner, the owner's family, and the owner's heirs have rights or claims in and to the property that you are buying. Those who may have an interest in or lien upon the property could be governmental bodies, contractors, lenders, judgment creditors, the Internal Revenue Service, or various other individuals or corporations. The real estate may be sold to you without the knowledge of the party having a right or claim in and to the property. In addition, you may purchase the real estate without having any knowledge of these rights or claims. In either event, these rights or claims remain attached to the title to the property that you are buying until they are extinguished.

Ask the Experts: Construction Disbursing

TRUE OR FALSE: Chicago NCS’s Construction Disbursing Department can service construction escrows nationwide, not just in Illinois.  

TRUE!!!  Chicago NCS has established the largest national construction disbursing department in the country. Our seasoned staff represents over 160 years of combined construction disbursing experience and knowledge to help you with your next construction project. Whether it is a ground-up build, property rehab or tenant finish work, we manage escrows ranging from small single-family homes to billion-dollar mixed-use developments, in most of the 50 states.