Funding

Funding for borrower

• occurs after the documents are recorded in purchase transactions or after consummation in refinance transactions

  • Varies state-to-state

    • Wet vs Dry settlement

  • May be delayed if rescission rights are present

Disbursement

• May include (but not limited to)

  • Payoff of mortgage(s)

    • 1st

    • 2nd

    • HELOCs

  • Taxes

  • Municipal fees

  • other creditors

  • Lender and/or broker fees

  • judgements and other liens

Settlement types

• Dry settlement

  • Funds are not disbursed immediately

  • Conditions may still be outstanding at time of closing but satisfied prior to funding

• Wet settlement

  • Funds are disbursed immediately after signing (while ink is still wet)

  • All conditions must be satisfied prior to closing

• Table funding

  • Allows brokers to originate and close loans in their own name using a warehouse line of credit

  • Servicing is immediately transferred to the lender who provided the warehouse line, then the line of credit is replenished

  • Type of wet settlement (not all wet settlements are table funded)

Reconveyence

After deed of trust is paid In full, a full and clear title is conveyed to the borrower again, without the lenders interest/ unencumbered