Prior to Closing Wholesale

Transcription

1 Closing Section 5 Prior to Closing Wholesale Closing the Loan Wholesale Title Binders & Title Policies Note Correspondent Survey Interim Interest Escrows/Aggregate Adjustments Filing/Recording Fees Correspondent Hazard/Wind & Hail Insurance Flood Insurance & Flood Certifications Taxes Private Mortgage Insurance Termite Inspection Well & Septic Right of Rescission Completion Escrows Wholesale Post-Closing Procedures Correspondent Post-Closing, Funding & Funding Suspense Procedures July 31, 2014

2 All loans closed and purchased by South State Bank must be closed in accordance with Federal, State and Regulatory requirements. In addition, all closing conditions must be satisfied prior to closing and or purchase. Prior to Closing Wholesale Loan Approval All Prior to Close (PTC) conditions must be cleared. Funding Request South State Bank maintains a closing schedule with a specific number of closings available each day to facilitate successful closings. Please contact you Customer Account Manager (CAM) to schedule and confirm your closing date. Once all PTC conditions have been cleared and a closing date has been established, upload a completed Closing Package Request Form with any additional closing documents on the South State Bank website at least four (4) days prior to closing. It is imperative that the information provided on the Closing Package Request Form is accurate and verified by the closing attorney/agent. Closing Instructions/Loan Closing Documents South State Bank will prepare the closing documents based on the Wholesale Lender s information and send the closing package to the attorney via secure e- mail. Preliminary Document Review A review of the below documentation is required prior to issuing a final closing package to the closing attorney/agent. The following must be uploaded in the applicable loan file on the TPO website for this review: Title Binder Insured Closing Letter Deed Survey (if applicable) Property Insurance (Hazard, Wind & Hail, Flood, HO6, etc) Closing the Loan Wholesale Attorney Summary / HUD-1 GFE (most recent) Underwriting Closing Conditions Termite Letter (if required by underwriter) Trust Cert Form The closing attorney/agent must furnish certain documents for review. Upon review and acceptance, South State Bank will authorize the loan to close. Documentation required from the attorney/agent is as follows: Any required corrections to Preliminary Documents reviewed HUD-1 Settlement Statement Closing Funds Funds will be wired to the closing attorney/agent on the day of actual disbursement. Funds wired will be on a net basis interim interest, escrow deposits, loan delivery fee, discounts, and buydown fee, if applicable, are deducted. If there is an SRP, it will be added to the wire amount, with the attorney/agent responsible for payment of the SRP to the broker. Tax and insurance information must be accurate for correct escrow account set up. A funding number will be issued once the final funding documents have been received and cleared July 31, 2014

3 Title Binders & Policies The title binder cannot be dated more than 60 days prior to the closing. Wholesale Issued as South State Bank, its successors and/or assigns as their interest may appear Correspondent Issued as Correspondent s name, its successors and/or assigns as their interest may appear The final title policy/short Form should be issued in South State Bank s name South State Bank, its successors and/or assigns, as their interests may appear Note Correspondent The note endorsement should be in the bottom left corner of the signature page of the original note when there is no Allonge. Endorsement of the note should be as follows: Pay to the Order of: South State Bank without recourse (Broker s/correspondent s Full Legal Name) Authorized Signature (Typed name and title of authorized signature) Survey A current survey is only necessary when required by the title insurance company to ensure coverage to South State Bank. If an old survey is used, an executed owner s affidavit will be required. If the property is located in a Flood Zone, the survey must show the finished floor elevation. Interim Interest Wholesale South State Bank will use 365 days for the purpose of calculating interim interest due at closing. Calculations should be the exact amount. Interest credits may be given on a case-by-case basis if they are noted on the Closing Package Request Form and the loan will close and fund on or before the 5th day of the month. Any requests/changes after the closing package is sent may delay closing. Correspondent Interest credits up to 5 days maximum are allowed. Escrows/Aggregate Adjustments South State Bank uses a two month cushion for escrow purposes. For detailed information on when escrow waivers are allowed, please reference posted product guides. Correspondent A two month cushion must be defaulted in Correspondent s mortgage closing software program when completing the Aggregate Escrow information July 31, 2014

4 Filing/Recording Fees Correspondent Filing/Recording Fees listed on the Final TIL must match the total of all filing and/or recording fees shown on the HUD-1. A corrected Final TIL will be required on transactions that do not meet this requirement prior to purchase of the loan. Hazard/Wind & Hail Insurance Hazard/wind & hail binders are acceptable in those states that allow the lender to do so. The Named Insured must read exactly as the deed will read. Purchase Transactions One year s worth of hazard/wind and hail policy must be paid at closing, reflected on the HUD-1, or it may be paid outside closing as evidenced with a paid receipt. Refinance Transactions For an existing policy to be acceptable there must be at least two months remaining on the policy term. If the remaining term is less than two months, proof of a new, one year hazard/wind and hail policy is required. The new policy can be paid at closing, reflected on the HUD-1, or paid outside closing as evidenced with a paid receipt. When using an existing policy, additional deposits to the escrow account for renewal payment purposes must be collected by using the following schedule: Months Remaining Months to Collect Coverage Requirements The coverage amount required for hazard/wind and hail insurance is equal to 80% of the replacement cost or the total loan (loan amount of first mortgage plus the highest credit amount of the second mortgage), whichever is GREATER. If the amount used is 80% of the replacement cost then the borrowers will be required to sign a hold harmless form. The coverage will not be required to be more than the cost to replace new. For more detailed information on hazard/wind and hail insurance coverage requirements please reference the Insurance Requirement Summary document in the Forms section of the TPO website. Documentation Requirements For purchase loans, the insurance binder and a paid receipt for the full premium will be acceptable, or the customer may elect to pay the premium at closing as evidenced on the HUD-1. For refinance loans, the existing hazard insurance policy with a new binder or endorsement showing the revised coverage and South State Bank as the mortgagee is acceptable July 31, 2014

5 Flood Insurance and Flood Certifications Flood Certification A Life of Loan Flood Certification is required for all loans purchased by or assigned to South State Bank. This certification must include HMDA information (MSA, Census Tract number, and County Code). South State Bank will use flood certifications pulled through First American/CoreLogic to determine flood insurance requirements once the loan is submitted to underwriting. If the Flood Certification indicates that flood insurance is required, the borrower must secure flood insurance prior to closing, in addition to signing the Notice to Borrower In/Not in Special Flood Hazard Area. Flood insurance is required when any part of the principal structure is located within a Special Flood Hazard Area (SFHA) as indicated by the Flood Certification. The flood insurance dec page must reference the same flood zone as the flood certification. Detached buildings are not considered as part of the principal structure. However, those secondary structures that fall in to the SFHA may trigger the flood insurance requirement when they are also a part of the security for the mortgage. Amount of Coverage Required The minimum amount of coverage required for single family detached, individual PUD unit or townhouse is the lesser of: 100% of the replacement cost of the improvements, The maximum allowed under the National Flood Insurance Program (NFIP), currently $250,000 per dwelling, or The loan amount of first mortgage plus the highest credit amount of the second mortgage PUD and condominium projects that carry a master insurance policy covering the subject unit should maintain coverage in the amount of the lesser of 100% of the insurable value of the buildings or the maximum amount allowed under NFIP. *Please note that flood insurance must be escrowed Taxes The collection of taxes to adequately provide for payment when the taxing authority opens its books for the current year is required. Taxes are typically paid on December 1st for counties that require payment by the end of the year. The following chart indicates the number of months to collect based on a December 1st payment schedule. *If the subject county has an earlier due date, taxes must be collected based on the month due Closing Month First Payment # of Months Due Cushion Total Months Collected January March February April March May April June May July June August July September August October September November October December November January *1 2 *3 December February *2 2 *4 *Assuming current year s taxes have been paid in full July 31, 2014

6 Private Mortgage Insurance Private Mortgage Insurance is required on all conforming loans where the LTV is in excess of 80% or as designated by Fannie Mae s Desktop Underwriter. At this time, South State Bank does not offer Lender Paid Mortgage Insurance. *Please note that mortgage insurance must be escrowed Wholesale South State Bank will order mortgage insurance through one of our delegated MI companies once the loan file is submitted to underwriting. Coverage Requirements Fixed 25, 30 YR & ALL ARM Loans Fixed 10, 15, 20 YR Loans LTV > 90% 30% LTV > 90% 25% LTV > 85% < 90% 25% LTV > 85% < 90% 12% LTV > 80% < 85% 12% LTV > 80% < 85% 6% Termite Inspection If a termite inspection is required, in all cases the underwriter will place a PTC condition on the loan for the inspection. A termite inspection must be performed by a state licensed inspector and be on a state specific form. If the report should indicate any type of damage, (i.e. wood or moisture), evidence that the damage has been cured is required prior to closing. A Wood Infestation/Termite Inspection Report Lender Disclaimer is required to be signed and dated by the borrower(s) at closing. Purchase A Termite Letter or Pest Inspection Report must be provided for on all purchase transactions when listed as a requirement in the purchase contract. In order to relieve this requirement, the provision must be deleted from the contract and initialed by all parties to the transaction. A Termite Letter or Pest Inspection Report may also be required if the appraisal notes a potential issue with the subject property or if a requirement of the loan program. New Construction A termite soil treatment letter is required dated within 1 year of disbursement date. Refinance A Termite letter is required in cases where the appraisal notes damage or potential infestation. A termite letter is also required if a requirement of the loan program. Well and Septic Private well and septic tanks are allowed provided they are located on the subject property. When the appraiser makes mention of or recommends further analysis or inspection of the water and sewage system, a detailed explanation of such on the appraisal is required. The appraiser should comment on condition, access to, possible environmental hazards and any other factor that may impact marketability. In cases where the underwriter is not able to ascertain sufficient information as to the condition of the well and septic system from the appraiser s explanation, additional information will be required. The additional information may include, but is not limited to, well, septic, water system and/or bacteriological tests and/or inspections by a licensed individual July 31, 2014

7 Right of Rescission Right of Rescission applies to refinance transactions of principal residences only, providing the borrower(s) three business days after the closing date to rescind the loan transaction without penalty. The loan can be funded after the rescission period has ended. All calendar days except Sunday and Federal legal holidays are considered business days. The Right of Rescission period may not be waived. Federal Holidays New Year s Day Martin Luther King Jr. s Birthday Washington s Birthday Memorial Day Independence Day Labor Day Columbus Day Veterans Day Thanksgiving Christmas Day NOTE: A Friday or Monday may be observed as a holiday by various institutions when the actual holiday falls on a Saturday or Sunday. In addition to the holidays listed above, some institutions may observe additional holidays. A general rule to follow is if the courthouse is closed for holiday then that day does not count towards the rescission period. Escrows for Completion Escrows for completion may be allowed on a case-by-case basis provided the work to be completed is exterior in nature and delayed due to weather. Wholesale Post-Closing Procedures South State Bank will prepare and send all closing documents to the closing attorney/agent. The closing attorney/agent must return the closing package to South State Bank within 24 hours of closing and disbursement. Timely closing package delivery is important to avoid penalties. Closing packages should be sent by attorney/agent to: South State Bank 2440 Mall Drive North Charleston, SC Attn: Post Closing Correspondent Post-Closing, Funding & Funding Suspense Procedures The Correspondent or their designee is responsible for the preparation and submission of the closing documents to the closing attorney/agent. The Correspondent is also responsible for review of the closing package and correction of any errors or omissions with the closing attorney/agent directly prior to delivery of the closing package to South State Bank. Receipt of Closed Loan Package The complete closed loan package is to be delivered directly to the Post Closing Department. Packages are not to be addressed to any one individual. South State Bank 2440 Mall Drive North Charleston, SC Attn: Post Closing For USDA loans, the complete credit/closed loan package must be received by South State Bank no later than the earlier of the lock expiration date or 5 calendar days after loan disbursement date. The loan must be approved with all underwriting conditions cleared in order for the closing package to be considered received. For all other loans, the complete credit/closed loan package must be received on or before the lock expiration date. The loan must be approved with all underwriting conditions cleared in order for the closing package to be considered received July 31, 2014

8 Closing Package Review Upon receipt of the closed loan package, a post-closing review will be conducted. If the file contains any missing and/or unsatisfactory documentation, the file will be suspended. The correspondent will be provided with a Funding Review Sheet outlining the missing and/or unsatisfactory items. Clearing Suspended Funding The Funding Review Sheet will also list the deadline for submitting missing and/or unsatisfactory items. The Correspondent has seven (7) calendar days to deliver the funding suspense items to South State Bank. Outstanding Items Not Received By Original Suspense Deadline If the suspense items are not received by 5:00PM on the 7 th calendar day, the Correspondent will be subject to a funding extension fee. A maximum of two (2) funding deadline extensions will be allowed for an additional seven (7) calendar days at a cost of.3% each. If the new suspense deadline falls on a weekend or holiday, the expiration date will default to the next available business day. If needed, a final extension of the funding suspense deadline may be granted. The third funding extension will be at a cost of.6% and will provide 10 additional calendar days to clear all remaining funding suspense items. Transactions Not Funded By Final Extension Any loan remaining in suspended status at 5:00PM on the expiration date of the final funding extension will be canceled and physical documents returned to the Correspondent at their expense. Closed Loan Package Received After Lock Expiration Closed loan packages received after the rate lock expiration date will be subject to South State Bank s current Relock Policy. Please reference the Registration & Pricing section of the TPO Manual on the South State Bank website. Final/Trailing Documents Final documents (recorded mortgage, assignment, final title policy and/or other required recorded documents) must be sent to South State Bank upon receipt from the attorney/agent no later than 90 days from the date of purchase by South State Bank in order to avoid penalty. Final documents should be mailed to the Quality Assurance Department: Quality Assurance Department Residential Lending P.O. Box Charleston, SC July 31, 2014