Most Common Loan Documents
This page of documents is under construction. Some links
work and some are yet to be developed. Please continue to check back as this
site expands.
This page is meant to help those who have questions about
documents.
Borrower's First Payment
Letter
Instructions to Escrow
Title/Escrow Disbursement
Notice of Right to Cancel
(RTC)
How to Calculate the Rescission Date
Truth in Lending Disclosure
(TIL)
Good Faith Estimate
HUD-1 Settlement Statement
Impound Authorization
Hazard
Insurance Authorization and Requirements
Borrower's
Certification and Authorization
Signature Affidavit and
AKA Statement
Compliance Agreement
Errors and Omissions/Compliance Agreement
Document Correction Agreement
Correction Agreement - Limited Power of
Attorney
Uniform Residential Loan Application (1003)
IRS Form W-9
Identification Affidavit
Borrower Identification/Patriot Act Disclosure
Mortgage
Deed of Trust
Statement of Information
___________________________________________________________________________________________________________________________
Borrower's First Payment Letter: pdf
The Borrowers First Payment Letter informs the borrower what their monthly
payment for the loan will be. The payment is broken down
into Principle and Interest, Property Taxes, Hazard Insurance, PMI (Private Mortgage Insurance), Flood Insurance (when applicable). This document also acts as a first payment coupon in the event they do not get
their statement before the first payment is due.
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Instructions to
Escrow: pdf
A Summary of the terms and conditions of the loan. It may also be called
'Closing Instructions'. This document often shows the terms of the loan as well as some of the fees. This item is used by the Closing Agent to fund the loan and
set up the escrow account if any. This item may require borrowers signature but
not all do.
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Title/Escrow Disbursement: pdf
This is sent to the title and escrow company along with the funds for
disbursement. This document contains much the same information as the Instructions to Escrow. This generally does not require a borrower signature.
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Notice of Right to Cancel (RTC):
pdf
This is a federally mandated form which allows the borrower three (3)
business days to review the documents and have the option to cancel the loan. A
Loan will have a rescission option if the transaction results in a mortgage or
lien on the property. However, if the transaction is a purchase- where a grant
deed, for example, is the title instrument used to convey the property-there is
no rescission period. There are three (3) dates referred to on the RTC; a.
Document Preparation date, b: Transaction Date: The date the document was
signed, and c. End of rescission period date: The termination date of the
borrower's right to cancel the loan. Some lenders will calculate and fill in the
rescission period, while others will leave it to be filled in at the signing by
a Notary Signing Agent.
How to calculate the rescission date:
If you want to be certain you may want to carry a
rescission calendar with you. From the signing date, count three (3) business days after the signing date.
The rescission period ends at midnight on the third business day following the
signing. Most lenders consider only Sunday and Federal Holidays to be excluded
from calculating the Rescission Period. There are a few who also exclude
Saturday form the calculation of the rescission period. There are two places
that have options for signatures on most RTCs. One is to be signed if the
borrower wishes to cancel and usually at the very bottom is the signature line
to acknowledge receipt of copies of the RTC. If the dates have to be entered at
the appointment then the borrower/s will need to initial beside each date.
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Truth in Lending Disclosure (TIL):
pdf
This form is required by the federal Truth in Lending Act (TILA). TILA
requires sellers and lenders to disclose credit terms and interest rates in an
identical manner so borrowers can shop around to compare loans. There are
different disclosures required by the TILA. For example, the TILA requires the
RTC form and the Itemization of Amount Financed/Prepaid Finance Charges form. TILA
requires lenders to make certain disclosures on loans subject to the Real Estate
Settlement Procedures Act (RESPA) within three (3) business days after receipt
of a written application. This early disclosure statement is partially based on
the initial information provided by the borrower. A final disclosure statement
is provided at the time of loan closing. The disclosure is required to be in a
specific format and include the following:
a. the Annual Percentage Rate (APR) The APR is the cost of the loan in
percentage terms and includes private mortgage insurance and prepaid finance
charges (loan discount, origination fees, prepaid interest and other credit
costs). The APR is calculated by spreading these charges over the life of the
loan, resulting in a higher rate than the interest rate shown on the note. Some TIL's come with a page of
Truth in Lending Terms.
b. Finance charges
c. The amount financed
d. Total Payments and payment schedule
e. Prepayment penalties, if any
f. Assumption option, if allowed.
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Good Faith Estimate: pdf
1. Discloses the estimated loan closing costs. RESPA Requires that when a
borrower applies for a loan, the lender or mortgage broker give the borrower an
estimate of settlement service charges he/she will likely have to pay. If the
borrower does not receive this estimate when applying for the loan, the lender
or mortgage broker must mail or deliver it to the borrower within three business
days. Ideally, the borrower would have the Good Faith Estimate in advance of the
closing to compare to the HUD-1 Settlement Statement at closing.
2. Typically this form requires the signature of the borrower prior to
proceeding with the drawing of loan documents. Since loans turn around quicker
than in the days before RESPA was enacted, the Good Faith Estimate often will be
signed at the signing appointment.
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HUD-1 Settlement
Statement:
pdf1
pdf2
HUD-1 itemizes all closing services and fees charged to the borrower. The
most important line for a Signing Agent is line 303 'Cash From/To Borrower".
This is where the SA would see if borrower needs to send a check back with the
documents.
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Impound
Authorization: pdf
The borrower authorizes the lender to collect and mange the portion of a
borrower's monthly payment that is for taxes, insurance and other items.
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Hazard Insurance
Authorization and Requirements:
pdf
This outlines the lender's policies and minimum requirements for hazard
insurance that is required to cover the subject property. After the Authorization is signed and returned, the document will be sent to the
borrower's insurance agent who will provide the necessary coverage.
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Borrower's Certification
& Authorization:
pdf
This is found in most loan packages and states that the information in the
loan application is true and complete, without misrepresentation or omission of
important facts. It also authorizes the lender to release loan-specific
information to an investor looking to purchase the loan in the secondary market.
Information provided to the investor could include the borrower's employment
history and income, Bank account balances, credit history and copies of income
tax returns.
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Signature Affidavit and AKA Statement:
pdf
In this the borrower discloses any other names under which he or she is known
and writes signatures for each name.. The Signature Affidavit and AKA Statement
ensure signature verification and uniformity on all documentation. If a document
requires the borrower to sign in a different name, the Signature Affidavit and
AKA Statement validates that name and corresponding signature. This document is
routinely notarized. Both acknowledgement and jurat formats exist. However,
variations of the Signature Affidavit exist which are simply signed without the
need for notarization despite the fact that its title "Affidavit" suggests that
it should be notarized.
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Compliance Agreement:
pdf
By signing this the borrower agrees to cooperate with the lender in adjusting
loan documentation for clerical errors after the property closes. If an error is
discovered in one of the forms after the closing, the borrower agrees to assist
in rectifying the error. Accurate information in the loan package is crucial to
closing the loan or selling it later. the Compliance Agreement is executed in
consideration of the lender disbursing funds for the closing of the property and
to enable the lender to sell, convey or market the loan in the secondary market.
Both acknowledgements and jurat formats exist as well as versions that do not
require notarization. There are a number of variations to the standard
Compliance Agreement including the following:
a. Errors and Omissions/Compliance
b. Document Correction Agreement
c. Correction Agreement - Limited Power of Attorney.
Unlike the compliance agreement in which the borrower pledges to cooperate in
correction errors in the documents, in the Correction Agreement - Limited Power
of Attorney the borrower authorizes an agent of the lender to make the
correction to the document.
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Uniform Residential
Loan Application (1003) pdf
This is a version of the loan application which contains all the
information the borrower provided to initiate the loan. There is a new
section at the top of the first page that needs signed by borrowers if
they are applying for joint credit. There is confusion of late with this
new item, whether this item needs signed if there is only one
borrower. It is best to check with whoever hired you to find out what
they are requiring. Generally, each page has a spot to be initialed at
the bottom right, page 3 & 4 gets a signature. Page 4 is for additional
information that would not fit into the body of the application.
The Shape-Shifting 1003 The Uniform
Residential Loan Application ...
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Identification Affidavit
pdf
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IRS Form W-9 pdf
Each year the mortgage company will report to the IRS the interest
the borrower paid on the mortgage during the previous tax year. This
form
verifies the borrowers social security number.
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Borrower
Identification/Patriot Act Disclosure
pdf
To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to
obtain, verify and record information that identifies each person who opens an
account.
Mortgage Several versions
IA
MN
SD
Also known as Deed of Trust depending on the state you are in. The
DOT (Mortgage) is a security instrument whereby real property is pledged
as security for a debt. A Mortgage differs from a deed of trust in the
way that foreclosure proceedings are handled. In states that use the
mortgage, foreclosure proceedings are governed by state law and handled
through the state's legal system. A mortgage involves two people (lender
and borrower). A mortgage is actually the formal document proving the
legal claim or lien on a piece of property that you give to the lender
who holds it as security for the money you borrowed. The lien is
recorded in public records. On a mortgage, you pledge the property as
security for the repayment of your loan, but you do not transfer title
to the lender.
States that use the mortgage include: Alabama, Connecticut, Delaware,
Florida, Hawaii, Indiana, Iowa, Kansas, Louisiana, Maine, Massachusetts,
Michigan, Minnesota, New Hampshire New Jersey, New York, North Dakota, Ohio,
Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Vermont,
Wisconsin and Wyoming.
A Mortgage can vary in size form five (5) pages to sixteen (16) pages
and usually requires initials in bottom right on each page including the
page where notarized as well as signature/s on last two pages.
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Deed of Trust Several versions
NE
MO
A Deed of Trust involves three people - the borrower (or trustor), the lender
(the beneficiary) and a trustee, a neutral third party, such as an attorney or a
title agent. The deed of trust is also recorded in public records.
In a deed of trust transaction, the borrower transfers the legal title for
the property to the trustee who holds the property in trust as security for the
payment of the loan to the lender. The deed of trust is cancelled when the debt
is paid. However, if you default on your payment of the loan, the trustee may
sell the property at the request of the lender without a court proceeding.
States that use the deed of trust include: Arizona, Alaska,
California, Colorado, Georgia, Idaho, Illinois, Mississippi, Missouri,
Montana,
Nebraska, Nevada, New Mexico, North Carolina, Oregon, Tennessee, Texas,
Utah, Washington and West Virginia.
A deed of trust can vary in number of pages and usually requires initials on
each page including the notarized page as well as signature/s on last two
pages.
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Statement of Information
pdf
Borrower Information Sheet to include
last 10 years of employ and residence.
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All the documents listed herein and the explanations are only the opinion
of one notaries' experience and interpretation. They are not to be construed as
legal advice or legal explanation.
Contact us for an appointment at (712) 251-5559
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Copyright © 2003 Halitek Industries LLC. All rights reserved.
Revised:
11/19/07
