Thread Options
#1530694 - 04/01/11 06:36 PM Definition of Loan Closing
Norrie Offline
Member
Joined: Feb 2008
Posts: 67
FEMA's Guidelines state that flood insurance shall be effective at the time of "loan closing." What is considered to be "loan closing"? Is it the date the borrower signs the note or can it be the date the loan is funded (usually a few days later)?

Return to Top
Flood Compliance
#1530724 - 04/01/11 06:53 PM Re: Definition of Loan Closing Norrie
Skittles Offline
10K Club
Skittles
Joined: Sep 2002
Posts: 13,963
TN
The date the borrower signs the note.
_________________________
My Opinions Only

Return to Top
#1530783 - 04/01/11 07:43 PM Re: Definition of Loan Closing Skittles
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,645
Bloomington, IN
Agreed.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#1530789 - 04/01/11 07:47 PM Re: Definition of Loan Closing Dan Persfull
RR Joker Offline
10K Club
RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
Why would you 'usually' be funding several days after the note is signed?!? (with the exception of ROR, of course)
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

Return to Top
#1530837 - 04/01/11 08:30 PM Re: Definition of Loan Closing RR Joker
Norrie Offline
Member
Joined: Feb 2008
Posts: 67
A review of one bank's processes showed funding usually occured a few days after the note was signed and this is the date they are requiring flood insurance to be effective.

Are there any references to support the opinion that loan closing occurs the date the borrower signs the note?

Return to Top
#1530841 - 04/01/11 08:33 PM Re: Definition of Loan Closing Norrie
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,646
Galveston, TX
As long as you have proof of insurance prior to the signing of the note, they can make the effective date prior to or the date of funding, even if it is a few days later. You can't close the loan (signing of the note) without proof of insurance.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1535796 - 04/14/11 07:12 PM Re: Definition of Loan Closing rlcarey
nikki_compliance Offline
Platinum Poster
Joined: Mar 2010
Posts: 520
NM
what if you are doing a new loan with an existing customer that paid off his loan last year and property is in a flood zone and we had flood insurance, we of coursed pulled a new flood and will have customer sign notice, but since he already has flood insurance in place do we have to give at least 10 days before closing? we pulled new flood today and customer is coming in to sign Flood Notice, Flood Insurance in force already, can we close loan tomorrow?

Return to Top
#1535801 - 04/14/11 07:14 PM Re: Definition of Loan Closing nikki_compliance
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,645
Bloomington, IN

Quote:
can we close loan tomorrow

Yes.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#1535807 - 04/14/11 07:19 PM Re: Definition of Loan Closing Dan Persfull
nikki_compliance Offline
Platinum Poster
Joined: Mar 2010
Posts: 520
NM
thank you.

Return to Top