Closing a Pennsylvania Home Loan – Purchase or Refinance

What Happens At A Pennsylvania Home Closing

After a buyer has completed the grueling task of searching for, selecting and negotiating the contract for their new home, a title company such as World Wide Land Transfer is selected. Often buyers will rely on the advice of a their real estate agent, loan officer or friends and family in selecting a title company, but ultimately under state and federal laws the choice of a title company is solely for the buyer to make . Once the buyer has made this important selection the process is set in motion that eventually leads to another successful real estate transaction.
Title companies do far more than merely appear at a settlement with files full of paper, a smile, and some checks. After receiving the application, we must:

  1. Review a copy of the sales contract to determine the terms of the transaction and to make sure it is properly executed.
  2. Examine the county land recordsto determine the status of the title of the property being bought and sold. This includes:
    • Determining who really owns the property by reviewing the deed history i.e. it is possible the property is actually owned by a trust the sellers created, that there is another family member on title who has not been involved in the transaction so far, or that there was a mistake in a prior deed; or sometimes the proposed seller or owner may not really be the person in title to the property.
    • Determining the property‘s legal description a property is legally identified through it‘s legal description which is different than its address.
    • Determining all outstanding loans that are secured by the property including those loans that have been previously paid off but were not properly “released” at the courthouse ;
    • Identifying any judgments or liens against the property owner(s) that affect the property this may include civil judgments, state and federal tax liens, as well as homeowner‘s association liens;
    • Obtaining a Tax Certification– from the local tax assessor and verifying that they are paid current;
    • Examining any other documents in the land records that may affect the property.
  3. If desired by the buyer,order a survey of the property from a licensed surveyor and review the completed drawing for any potential encroachments or problems.
  4. Communication with the Seller’s in order to obtain or assist in obtaining Payoffs on either open Mortgages or Judgments.
  5. Contact any relevant Homeowner‘s or Condominium Association to determine whether there are any current violations and to get an accounting of paid and outstanding dues.
  6. Contact the real estate agents to determine their commissions, administration fees, and any other necessary information to be placed on the HUD1 Settlement Statement.
  7. Obtain the tax certification.  In most Pennsylvania counties such certs are ordered locally.
  8. Communication with the Buyers/Owners new Financing Agent (Bank)
    • Obtain information from the lender such as the exact loan amount, full name of the lender and whether there will be one or two loans.
    • Prepare a Title Insurance Binder or Commitment that promises to the lender that title insurance can be issued if certain requirements are met and provides the lender with the current status of title.
    • Send a preliminary HUD1 Settlement Statement so the lender knows what title and government fees will be charged.
    • Schedule the closing with all parties and obtain the loan docs from the bank along with the specific instructions for closing the loan. This is usually received the day of or day before closing.
    • Prepare a final HUD-1 settlement statement with all fees including the lenders and send to the lender for final approval.
  9. Prepare all other documents necessary for the settlement including the Deed, various county forms, affidavits, etc.

Only after all of the above is done, and more, is it time to for settlement.

At The Settlement

Typically, at the closing the buyer(s), seller(s), real estate agent(s), attorney(s) and loan officer(s) meet at the offices of World Wide Land Transfer or another location properly agreed upon with a settlement attorney to finalize the transaction between the buyer(s) and seller(s). While at settlement the buyer(s) and seller(s) will be presented with various documents for their signature. Among the documents that will be signed are the HUD-1 Settlement Statement, the Deed, and all of the lender’s loan documents including the note, mortgage and various disclosures.

The settlement attorney or closing agent will explain all the necessary documentation to the parties. All monetary adjustments and proration’s between Buyer and Seller will appear on the settlement statement. If any disputes between the parties should arise at settlement, the settlement agent will provide a forum for those parties to resolve their differences. It is our goal to make sure everyone leaves the closing pleased with the transaction.

After The Settlement

When the parties to the transaction leave the closing table, their part is finished; however,
the Title Companies job continues.

  1. We must audit the disbursement sheet and review all documents involved;
  2. Prepare in accordance to instructions and return the lender‘s package;
  3. Record the Deed and Mortgages in the county‘s land records;
  4. Disburse all funds to appropriate parties;
  5. Issue the title insurance policy for the new owner and the lender(s); and,
  6. Verify that all prior mortgages and lenders have been paid off and record all releases at the county courthouse.