Was the Pre-Closing Fee Disclosure executed at least one day before the Business Day that the home equity loan is scheduled to close?
Do the figures disclosed in the pre-closing disclosure match the proposed final HUD-1/HUD-1A exactly? Confirm that the figures disclosed in the pre-closing disclosure have not changed. If they have changed determine whether your facts warrant a Good Cause Exception or Bona Fide Emergency exception discussed above. If they do not, have borrowers sign the revised pre-closing disclosure and reschedule closing to the next Business Day.
Are there any blanks in the documents? The Owner of the homestead is prohibited from signing any instrument in which blanks are “left to be filled in”. However, not all documents or records executed in connection with an equity loan are instruments, and not all blanks contained in an instrument are “blanks that are left to be filled in”. The term instrument means a document or record that creates or alters a legal obligation (i.e. Deed of Trust).
Do all fees when added together, excluding interest fall under the two percent (2%) cap?
If Discount Points are charged are they bona-fide?
Reconfirm that the Texas Home Equity loan is being closed at the office of a title company, attorney’s office or the Bank’s office.
If using a power of attorney, has it been approved by the title company, lender and investor, if applicable?
Is the property vested in all owners of the homestead? Have all owners of the homestead and their spouses signed the closing documents?
Have copies of the closing documents been provided to all owners? See “Exhibit I – Texas Home Equity Receipt of Copies” for a sample form that owners may be required to sign to acknowledge they have received the required copies.
At closing, the lender must provide the owner with a copy of all documents that are signed at closing in connection with the equity loan. One copy of these documents may be provided to named owners. The lender is not required to give the owner copies of documents that were signed by the owner prior to closing, such as those signed during the application process. For documents signed after closing such as the Affidavit of Non-Rescission, the lender shall provide copies within three business days of execution.
Have you reviewed the title commitment and confirmed with the title company that they intend to issue the T-42 and the T-42.1 endorsements without exception or deletion? Any deletion from either of these endorsements will likely result in a suspended loan.
Will the cumulative loan-to-value for all loans equal 80% or less? Reconfirm that the all outstanding loan balances when added together do not exceed a maximum cumulative loan-to-value (“CLTV”) ratio of 80% of the fair market value of the homestead on the date the extension of credit is made.
Has the appraisal or evaluation been received? Has the name of the appraiser or evaluator in addition to the value been inserted into the Fair Market Value Disclosure?