This form is used by a lender or lender’s counsel to instruct an escrow agent regarding the closing of a real estate transaction and disbursement of a loan secured by real estate.
Closing Instructions
[from Lender]
[Date]
[Name of escrow officer]
[Name and address of escrow agent]
Re: $[amount] Loan (“Loan”) from
[name of lender] (“Lender”) to
[name of borrower] (“Borrower”)
Your GF Number:
[Salutation]
Set forth below are Lender’s instructions for closing the above-referenced Loan to Borrower.
1.Enclosed with this letter or otherwise delivered to you are the following documents for your use in closing this Loan (collectively, the “Documents”):
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Select as applicable from the following examples. |
a.Promissory Note in the original principal amount of the Loan (the “Note”).
b.Deed of Trust [include as applicable: , Security Agreement, Assignment of Rents and Leases, [and] Financing Statement] (the “Deed of Trust”).
c.Financing Statement to be filed with the Texas secretary of state’s office (the “Financing Statement”).
d.Borrower’s Closing Certificate and Affidavit (the “Closing Certificate”).
e.Certificate of Resolutions (the “Resolution Certificate”).
f.Form of Opinion of Borrower’s Legal Counsel (the “Borrower’s Opinion”).
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Include title(s) of other document(s) as applicable. |
2.It is understood that you will prepare a settlement statement setting forth the proceeds of the Loan being disbursed and the purposes for which the proceeds are being applied (the “Settlement Statement”).
3.Also enclosed is a copy of Lender’s closing instructions (the “Closing Instructions”), which are being supplemented by the information set forth in this letter.
4.Before you request any funds from Lender or otherwise advise that this transaction has closed, please deliver to Lender the signed originals of each of the following: the Note, the Closing Certificate, the Resolution Certificate, [and] the Borrower’s Opinion [include if applicable: , and [title[s] of other document[s]]]. At that same time, please deliver to Lender two copies, certified by you to be true and correct, of each of the following signed documents: the Deed of Trust, the Financing Statement, [and] the Settlement Statement executed by Borrower [include if applicable: and [title[s] of other document[s]]]. Also deliver to Lender with the foregoing documents a currently dated and effective title commitment or the Loan Policy described below, and the original hazard insurance policy described in the closing instructions.
5.Confirm that all blanks in the enclosed Documents are completed before their execution. Please be certain that the Deed of Trust [include if applicable: and [title[s] of other document[s]]] [is/are] immediately recorded in the real property records of [county] County, Texas, the Financing Statement is immediately filed in the Texas secretary of state’s office, and [other instructions].
6.Before you disburse any funds received by you from Lender or otherwise advise Lender that this transaction has closed, please be certain that the title insurer is in a position to issue, and will issue, to Lender a loan policy of title insurance (the “Loan Policy”) in the form prescribed by the Texas State Board of Insurance, written by the same underwriter that issued the Commitment for Title Insurance (the “Commitment”) with an issuance date of [date] and an effective date of [date] under the above-referenced GF number. The Loan Policy must be issued in accordance with the Commitment, except as follows:
a.The Insured under the Loan Policy must read exactly as the Lender’s name is set forth in the Note, with the following additional phrase: “and its successors and/or assigns who are the lawful owner or owners of the evidence of debt identified herein and any subsequent owner or owners thereof”;
b.The effective date of the Loan Policy must be the date on which the Deed of Trust is filed of record;
c.The lien insured by the Loan Policy must be the first-priority lien arising under the Deed of Trust;
d.The real property described in the Loan Policy must be the same property described in the Deed of Trust and in the survey dated [date], prepared by [name];
e.Fee simple title to the real property described in the Deed of Trust must be shown by the Loan Policy to be vested in Borrower, and any easements benefiting the real property must be included in the description of the property insured by the Loan Policy;
f.Item 2 of Schedule B of the Loan Policy must be modified to read “shortages in area” only, provided, however, that if the final survey delivered to you reflects one or more encroachments or other matters, the Loan Policy may except to the encroachments and other matters reflected in the survey if the Loan Policy contains a T-19 endorsement as to those encroachments or other matters;
g.Item 3 of Schedule B of the Loan Policy must be modified to delete the words “and subsequent assessments, for prior years due to change in land usage or ownership,” and must except only to taxes, assessments, and stand-by fees for the year [year] and subsequent years, not yet due and payable;
h.The exceptions to title shown on Schedule B of the Loan Policy must include only the Permitted Exceptions set forth in the Deed of Trust (so that the following-listed items from Schedule B of the Commitment must be deleted: [list items]);
i.All matters described on Schedule C of the Commitment must be satisfied and resolved to your complete satisfaction so that none of these matters will appear as exceptions in the Loan Policy;
j.There should be no exception in the Loan Policy for any lack of right of access to and from the Property;
k.The Arbitration Clause in the Conditions and Stipulations section of the Loan Policy should be deleted pursuant to Procedural Rule P-36;
l.There should be no exception in the Loan Policy for parties in possession (except for tenants as lessees only under unrecorded leases with no right of purchase or right of first refusal);
m.There should be no exception in the Loan Policy for visible or apparent easements on the Property; and
n.The following endorsements to the Loan Policy should be provided: [list any applicable endorsements].
7.By disbursing Loan funds, you will certify to Lender that all matters disclosed in Schedule C of the Commitment have been or will be paid, satisfied, or otherwise resolved to the complete satisfaction of the title insurer before the issuance date of the Loan Policy, that no exceptions for any item on Schedule C of the Commitment will be contained in the Loan Policy, and that you have complied with the requirements and conditions of the letter.
8.We have also enclosed our statement for services on behalf of Lender, which you are instructed to collect and remit to us as part of the closing.
9.If for any reason you cannot or will not comply with all of the requirements and conditions of this letter, please inform the undersigned immediately. The Title Company is not authorized to close the transaction on behalf of Lender unless the Title Company complies with the requirements and conditions of this letter.
If you have any questions regarding any aspect of this transaction or the instructions set forth herein, please call us at your earliest opportunity.
Very truly yours,
Legal Counsel for Lender
By:
(Authorized signature)
Enc.
c: [name of lender]