markus41/plugins/lobbi-mortgage-domain/skills/closing-checklist

Closing Checklist Automation Design

Design the automated pre-closing and post-closing checklist workflow for mortgage loan closings, including condition clearance, CD issuance compliance, closing day coordination, post-closing package review, and trailing document tracking.

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Section 1: Pre-Closing Checklist

Trigger: CTC (Clear to Close) issued by underwriter

Timeline: CTC typically issued 3–10 days before closing. All pre-closing items below should target completion 24–48 hours before the scheduled closing date.

1a: Condition Clearance Verification

Before beginning any closing preparation, confirm all UW conditions are cleared:

| Check | Verified By | Method | |-------|------------|--------| | All CTC conditions marked cleared in LOS | Processor / Underwriter | LOS condition log | | No outstanding stips remaining | Underwriter | Final approval document | | Any PTD (Prior to Docs) conditions cleared | Processor | LOS | | Any PTF (Prior to Funding) conditions noted | Closer | List carried to funding checklist | | Flood cert confirmed: flood zone, standard vs. SFHA | Processor | Flood determination in file | | Hazard insurance binder received and coverage adequate | Processor | Binder in file; coverage = replacement cost or min loan amount | | Condo: HO-6 insurance if required by program | Processor | Binder in file |

1b: CD Issuance and TRID Compliance

• [ ] Final CD issued to borrower(s) with all parties correct
• [ ] CD delivery method documented: in-person / e-sign (timestamp) / mail (calculate 3-day receipt)
• [ ] 3-business-day waiting period calculated and closing date confirmed to be on or after waiting period expiry
• [ ] CD fees reconciled against LE: tolerance analysis complete; no violations
• [ ] If tolerance cure required: cure amount calculated, method determined, documented on CD or memo
• [ ] Seller CD (purchase only): separate CD for seller generated with seller-side transactions
• [ ] Borrower has received and confirmed receipt of CD (e-sign confirmation or acknowledgment)

1c: Title Review

• [ ] Final title commitment received
• [ ] Title company and agent confirmed for closing
• [ ] Effective date of title search within lender's acceptable window (typically 30–60 days pre-close)
• [ ] Exceptions reviewed and cleared (or accepted per lender guidelines):
  • Existing mortgage(s) to be paid off at closing — payoff figures received
  • Easements — recorded easements reviewed; none affecting marketability
  • Survey matters — if survey required, reviewed and acceptable
  • Liens — all liens addressed (paid off at closing or per lender exception)
  • HOA dues — current; no delinquency
• [ ] Vesting/how title will be taken: matches 1003 and approved by lender
• [ ] If leasehold: lease reviewed per program requirements

1d: Hazard and Flood Insurance Verification

| Item | Requirement | |------|-------------| | Hazard insurance binder | Effective date = on or before closing date; term at least 1 year | | Coverage amount | Greater of: replacement cost or loan amount (cannot be less than loan amount) | | Mortgagee clause | Correct lender name and ISAOA language | | First year premium | Paid in advance (or at closing if escrowed — verify funds at closing) | | Flood insurance (if required) | Coverage = minimum required (lesser of: loan amount, building replacement cost, $250K for NFIP) | | Flood insurance mortgagee clause | Correct lender name | | Flood first-year premium | Paid in advance or at closing |

1e: Wire Instructions Verification

• [ ] Wire instructions received from settlement agent / title company
• [ ] Wire instructions verified by callback to title company at number on file (NOT the number in the email — fraud risk)
• [ ] Confirm wire instructions have not changed since prior verification
• [ ] Documentation: log of when instructions were verified, who verified, callback number used
• [ ] Wire fraud warning provided to borrower in CD and separately: borrowers should never wire based on email alone; always call to verify using a number obtained independently

1f: Closing Agent Confirmation

• [ ] Settlement agent / closing attorney confirmed for scheduled date, time, and location
• [ ] Remote online notarization (RON) setup if applicable: notary confirmed, technology tested, state RON law confirmed
• [ ] Closing documents to be delivered to closing agent: method (electronic delivery / overnight / courier) and timeline confirmed
• [ ] POA (Power of Attorney) review: if any party is signing via POA, confirm POA is acceptable to lender (recorded or recordable, specific to the transaction, not expired)

1g: Loan Document Package

Before releasing loan documents to settlement agent:

• [ ] Final loan amount confirmed (no changes since last AUS and LOS)
• [ ] Interest rate and all loan terms confirmed (match rate lock)
• [ ] Loan documents generated in LOS or doc prep vendor
• [ ] Note reviewed: loan amount, interest rate, payment amount, maturity date, prepayment penalty (Y/N)
• [ ] Deed of Trust / Mortgage reviewed: property legal description, vesting, lender name, loan terms
• [ ] MERS Registration: if MERS is used, MERS MIN assigned and in documents
• [ ] Right to cancel (if refinance, non-purchase money): 3-business-day rescission period documents included

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Section 2: Closing Day Workflow

2a: Disbursement Authorization

Before authorizing wire disbursement:

• [ ] All PTF (Prior to Funding) conditions cleared
• [ ] Signed closing package received from settlement agent (wet or e-sign)
• [ ] Closing affidavit / compliance agreement executed
• [ ] Note signed by all borrowers
• [ ] Deed of Trust / Mortgage signed by all vested parties
• [ ] Right to cancel executed (refi) — confirm 3-day rescission period has run (or waiver executed if applicable)
• [ ] Funds confirmed received: borrower's closing funds wired in or cashier's check confirmed
• [ ] Closing disclosure re-reviewed post-signing: no changes from issued CD (if changes, additional disclosure may be required)
• [ ] HMDA data confirmed for LAR reporting

2b: Wire Release

• [ ] Funding department approves wire release
• [ ] Wire released to settlement agent escrow account
• [ ] Wire confirmation number saved in LOS
• [ ] Settlement agent confirms receipt of wire
• [ ] Disbursement date = funding date (used for first payment due date calculation and HMDA)

2c: Closing Package Receipt Confirmation

After closing is complete:

• [ ] Settlement agent sends executed closing package to lender (overnight or electronic)
• [ ] Package received and logged (date received)
• [ ] Receipt acknowledgment sent to settlement agent

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Section 3: Post-Closing Package Review

Trigger: Executed closing package received from settlement agent

Timeline: Must be completed within lender's investor delivery commitment (typically 15–30 days post-close)

3a: Document Review Checklist

Note review:

• [ ] All borrowers have signed (wet or e-sign per investor requirements)
• [ ] Loan amount matches final CD and LOS
• [ ] Interest rate matches final CD and rate lock confirmation
• [ ] Monthly payment matches final CD (PI only)
• [ ] Maturity date correct
• [ ] Prepayment penalty terms correct (or none, if applicable)
• [ ] Endorsement required: blank endorsement or to specific investor / MERS

Deed of Trust / Mortgage review:

• [ ] All parties have signed (all vested owners)
• [ ] Notary acknowledgment complete (notary seal legible, notary commission expiration date valid on date of signing)
• [ ] Legal description of property matches title commitment and survey
• [ ] Loan amount correct
• [ ] Lender name correct (not prior lender if refinance)

Title insurance:

• [ ] ALTA Lender's Title Insurance Policy (or binder pending recording) received
• [ ] Policy amount = loan amount
• [ ] Policy insures lender in first lien position (for purchase or rate/term refi)
• [ ] Named insured = lender (or MERS as nominee, if applicable)
• [ ] Exceptions reviewed and acceptable

Final inspection (construction and FHA/VA/USDA if required):

• [ ] Final inspection report received (if required by program)
• [ ] Inspector sign-off that property is complete and meets program requirements

3b: Recording

• [ ] Deed of Trust / Mortgage sent to county recorder (via settlement agent or lender directly)
• [ ] Recording confirmed: recorded document number received and stored
• [ ] Recorded document received and stored in loan file
• [ ] Deed (purchase): confirm deed recorded and available

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Section 4: Trailing Document Tracker

After closing, several documents are received over time. Track each by expected receipt date with alerts.

| Document | Expected Receipt | Alert Threshold | Owner | |---------|-----------------|-----------------|-------| | Recorded Deed of Trust / Mortgage | 2–8 weeks post-close (varies by county) | Alert at 30 days if not received | Post-close | | Final Title Insurance Policy | 2–6 weeks post-close | Alert at 45 days | Post-close | | Final inspection (if pending at close) | Per condition timeline | Alert at condition due date | Post-close | | Survey (if ordered post-close) | 1–3 weeks | Alert at 21 days | Post-close | | MERS registration confirmation | Within 5 business days | Alert at 7 days | Post-close | | Investor delivery receipt | Per investor commitment (15–30 days) | Alert at delivery deadline −5 days | Shipping |

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Section 5: MERS Registration Workflow

If client uses MERS (Mortgage Electronic Registration Systems):

1. MIN (MERS Identification Number) assigned in LOS before document generation
2. MIN printed on Note and Deed of Trust
3. MERS registration submitted: borrower name, property address, loan amount, MIN, originator ID, servicer ID
4. MERS registration confirmation received and stored
5. If loan sold: MERS transfer-of-beneficial-rights (TOBR) update submitted within investor's required timeframe

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Section 6: Shipping and Investor Delivery

Investor delivery package (custodian file):

| Document | Delivery Format | |---------|----------------| | Original Note (with endorsement) | Original physical or SMART Doc e-note | | Original Deed of Trust (or certified copy if recording pending) | Original or certified copy | | Title insurance policy or binder | Original or digital policy | | Any riders / addenda to Note | Original | | Allonge (if applicable) | Original |

Shipping checklist:

• [ ] Correct investor identified and delivery address confirmed
• [ ] Shipping method: overnight with signature required (for originals)
• [ ] Tracking number saved in LOS
• [ ] Investor receipt confirmation received and stored
• [ ] If e-delivery: e-vault transfer confirmed; investor acknowledgment received

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Output Format

Deliver three artifacts:

1. Pre-Closing Checklist — Automated checklist with each item, responsible role, trigger event, verification method, and alert threshold

2. Post-Closing Checklist — Document review checklist for each document type with acceptance criteria

3. Trailing Document Tracker — Template for tracking all post-close documents with expected receipt dates, alert thresholds, and escalation path for aged items