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.

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:

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

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

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

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

Section 4: Trailing Document Tracker

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

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

Section 6: Shipping and Investor Delivery

Investor delivery package (custodian file):

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

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