It is routine for escrow departments of title companies and independent escrow firms to provide a Settlement Statement to a loan officer (and agents) prior to making appointments with clients to sign their paperwork. Once loan documents are received by escrow the closing staff move to get this accomplished as quickly as possible. This is done for a variety of reasons but mostly to assist in ironing out any discrepancies prior to meeting with the client.
If you reconciled a “yes,” the interest rate is on the Settlement Statement, you are correct. So, where is it:
- Line 901 of the Settlement Statement
- If a borrower has a loan, it is on Line 901 to calculate interest (see screenshot)
Can this be missed even after escrow receives a HUD approval “green light,” “all OK,” “call the borrowers to make an appointment?” Unfortunately, yes. Hopefully this post will assist consumers and those in the business that were unaware that this is on the Settlement Statement and to prevent situations where escrow is meeting a client at their home at 8pm to sign docs and hear the client remark, “this is not the rate/program we were quoted.”
Another simple solution is to always send the note (usually 3 to 4 pages), along with the HUD-1 to be reviewed by the LO before signing.
I once had a lender send the wrong terms twice to a closing, so I learned to be hypervigilant about that.
Good suggestion Roger.
I think a good number of agents and LO’s are unaware of its presence on the HUD. It’s tucked in there, so it is easy to miss. Hard on the eyes to read a HUD in a fluid way. Don’t know if the new HUD’s coming out will help much.
Tim,
Good point. I can only think of one case where the rate was different than the expectation, likely because by and large my clients use the best and most reputable lenders.
The one time it was different it was because the closing was extended partly by the buyer’s own doing for not good reason. The lock expired by the time the buyer decided to proceed after first cancelling. They were not happy at all…but in the end they only had themselves to blame for the rate lock falling out. Still, it was a sad day all around as the rate had moved substantially and I remember it well even though it was back in 1993 or so.