09.26.2001 :: Loans
The Loan Sign-Off
by Mark Junod

A purchase loan sign-off is normally a very happy event. Or at least it can be. The loan sign-off takes place at a title company a few days before the actual close of escrow.

The loan documents confirm in writing all promises about the loan that have been made by the loan agent during a sometimes lengthy process. For this reason, we believe it is vital that the loan agent be present at the sign-off to go over these documents with the buyer. Invariably questions arise which require help from the loan agent.

So here you are at the title company having interrupted a busy day at the office or at home. Attending the signoff with you are the Realtor, the loan agent and the title company's escrow officer.

Be prepared to sign your name and initials many times. At a recent sign-off with a first trust deed and a second trust deed (two sets of loan documents) each buyer signed fifty nine times and initialed fifty times.

Also, be prepared for redundancies in the documents. Lenders have corporate attorneys charged with the responsibility to protect the interests of their employer. Few of these folks could be accused of sins of omission in discharging this responsibility, nor of failing to create two or (even better) three documents when an average citizen would fail to appreciate the need for even one. In light of this admittedly annoying reality, and with deep appreciation of the enormity of what you are about to do, it helps to arrive at the sign-off having prepared yourself as follows.

Should one of you be right handed and the other a "lefty" seat yourselves with your signing hands next to each other. This allows you both to (almost) simultaneously sign the same document. You will cherish the time this saves.

Don't expect to read and completely understand every word of every document. Reading every word would take several hours. Time required to fully understand every word - nobody knows.

Seriously - there are two extremely important documents to read very carefully and make sure that you understand them completely. They are the closing statement and the promissory note. Although the other documents are also important, they tend to be (as you will see) redundant - containing information and disclosures covered in other documents.

The closing statement describes who pays how much to whom for what. It should adhere closely to figures contained in the Good Faith Estimate of Closing Costs previously provided by the loan agent. This is an important document.

The note sets forth the specific terms of how you will pay back the loan and what happens if you don't. This is an equally important document.

You will receive a copy of every document you sign. Take these documents home. Review them as carefully as you feel you must prior to close of escrow and call your loan agent with any questions. An even better solution - bound to create a more relaxed sign-off. If time permits -- get an advance copy of every document you will be required to sign a day or so prior to the sign-off. Review them and resolve any questions with your loan agent before the signoff.

Mark Junod is Branch Manager at First Horizon Home Loans - Elliot Ames Division. First Horizon Home Loans is a broker licensed by the California Department of Real Estate. He can be reached by phone at (831)476.7880 x121 or by email at mjunod@fhhloans.com. You can also visit his website at www.markjunod.com.