What is it and why am I charged this fee?
The “Loan Tie-In-Fee” is a fee that is charged by Escrow Holders to compensate them for the additional work required to process having one or more New Lender(s) in the escrow process.
Among a myriad of other things the Escrow Holder:
- Complies with the Loan Originator (either the Mortgage Broker or Lender) to help them in preparing their NEW GFE disclosure to Borrower in accordance with the New GFE and HUD-1 guidelines for initially disclosed borrower costs and fees;
- Submits certified copy of ALL Escrow instructions and amendments to the new lender(s);
- Coordinates submission of the Preliminary Title Report, and copies of the covenants, conditions, and restrictions, and the appropriate supplemental title reports to all new lender(s);
- Corresponds with the Lender(s) for status and possible NEW GFE tolerance issues during the approval process and takes appropriate action, as directed by lender(s);
- Receives identifies and responds to all Escrow related PRIOR TO DOCUMENT conditions imposed by the lender;
- Receives, processes and packages Lenders new loan documents for Buyers Signature
- Receives new Lenders minimum fire insurance requirements and organizes changes necessary from Buyers insurance agent and coordinates the delivery of the same to Escrow.
- Arranges for Buyers appointment to sign loan documents at a time convenient for Buyers either with Escrow Holder or utilizing the services of a qualified Traveling/Signing Notary service;
- Oversees the in-office new loan document signing process (a time period ranging from 30/45 minutes to over 3 hours, depending on:
- Buyer’s familiarity with the loan documents, loan program, GFE/HUD-1 comparisons, and
- Loan Originator’s accurate representations of the “requested” new loan to the “actual”
- Packages executed loan documents in accordance with new lender’s requirements, including one or more certified copies of al escrow instructions, amendments, receipt(s) for deposit into escrow, etc. and arranges for delivery to the lender;
- Advises title company of all new lender’s title title insurance requirements and any necessary special endorsements;
- Verifies new lender’s timely funding of their new loan and arranges for title company pick up of funding check and/or confirmation of receipt of wired new loan fund transfer
- Confirms recordation with the new Lender and processes the Lender required FINAL HUD-1 SETTLEMENT Statement in addition to Buyer’s CLosing Statement; and
- Verifies new lender’s Title Insurance requirements have been satisfied after the close of escrow
- Issue Revised HUD-1 Statement in the event that escrow closes with any GFE tolerance items and Loan Originator cures the tolerance issue within 30 days after close of escrow.
Though this list is comprehensive it is not at all all-inclusive, we feel it is a fairly accurate representation of the additional liability, exposure, time, effort, experience, and expense required for the Escrow Holder to facilitate a successful close of an escrow where a Buyer will be applying to a lender(s) for a brand new loan.