MISMO has issued standardized mortgage closing instructions that lenders can use to communicate with settlement agents.
The templates create a common format for closing instructions and are intended to improve communications between lenders and settlement agents, thereby reducing closing errors. By using the same templates, lenders and settlement agents will save money, reduce operational overhead, have fewer compliance violations, and be able to provide better customer service.
“Participants across the industry have collaborated effectively to produce these closing instruction templates, which enable lenders to provide consistency in what’s included and where to find it,” says Wells Fargo Home Mortgage’s Kate Steineman. “Closing instructions communicate important loan details and requirements, and these templates mean settlement partners will no longer have to search through pages of instructions for information they need.”
The closing instruction templates include two distinct documents: the Master Closing Instruction Template and the Transactional Closing Instruction Template. The new templates focus on the format and organization of closing instructions, rather than legal language often included in instructions. MISMO has also developed an implementation guide to assist with adoption.
The Master Closing Instruction Template contains lender instructions common to all loans closed for that lender, including items such as instructions for conflicts of interest, data security and document destruction, verification of signer identity, and recording.
The Transactional Closing Instruction Template consists of information relating to a specific loan, including borrower contact information, property information, critical dates, and conditions and stipulations. The templates were developed through a collaborative effort across many sectors of the mortgage ecosystem, including national and regional lenders, title and settlement services companies, escrow companies, LOS vendors, and document preparation vendors.
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Photo: Kate Steineman