Getting a mortgage has drastically changed over the last two years for the borrower. Not only is qualifying for a loan much harder, but getting through the process has become arduous and time consuming. Just when you thought it was over, you have to go to the closing and sign mounds of paperwork- in triplicate of course. A mortgage closing goes as smoothly as the parties involved. The professionals at a closing must be prepared and ready to close. If there is one person there who did not do their homework, the closing can take quite as long and be very stressful. So, how does one prepare for the grand finale- the closing? Today, I am interviewing Gregg Febbraio, bank attorney extraordinaire! Gregg and I go way back to law school- so that is around wow, over 20 years. Gregg is a New York State bank attorney who is known to do 6- 10 closings a 10 fighting traffic from 6AM to Midnight to close mortgages on location- any location. Gregg, always prepared, will discuss what to expect about the closing and how to have the least amount of stress and pain.

Q. Closings are either done by an attorney or escrow agent, depending on the State. What makes a good closing agent?

A. Preparation and strong people skills. In today’s complicated closing environment and ever changing regulations and requirements, it is imperative that you have an extremely well trained and competent staff. The days of the one man/women shop for closings is coming to an end. With preparation being a given, it takes a special brand of professionals, to complete the closing. When I say special I mean caring dedicated attorneys who enjoy people and have a true desire to accommodate and assist the borrower(s) to feel comfortable and empower. I can’t stress enough the importance of treating the borrower(s) with kindness and with respect. Once they are relaxed, everything should go smoothly. I always say that this is not brain surgery. It is a basically simple procedure once the comfort level is there.

Q. Most borrowers are not told how to be prepared for closing. Can you give a few pointers on what they should bring to a closing?

A. Two forms of picture ID. (They must be active and government issued such as a drivers license, passport, etc.), checkbook, and copy of commitment. Also, should check with their mortgage loan officer, to see if the lender is requiring any other documentation to be brought to the closing. (Recent paystub, HUD-1 from prior sale)

Q. Is it possible for a borrower to know what all of their closing costs are before the closing? If so, who is responsible for telling them and when should they realistically get those numbers.

A. With a refinance, your mortgage professional, should be able to advise you; with a purchase, your attorney should let you know in advance what the itemized closing costs. It is hard to get all of the exact figures before the previous day. Typically these fees are gathered from the lender, the title company, the seller’s attorney and a few other parties. The bank attorney works with the borrower’s attorney to itemize the fees and figure out exactly how much is due before the closing. Most people do not submit fees until the last minute which is why the borrower never knows until the 11^th hour. It is a hurry up and wait game at this point.

Q. What happened if someone goes to a closing and they are short money?

A. On a refinance, depending on the amount taken, you can either cover all your fees by bank or certified check, except your lender fees. Those are normally deducted from the loan proceeds. If you choose to borrow enough to cover all you fees, then you will not need to pay for same from your personal funds. On a purchase, other than you lender fees, all other fees are normally paid by bank or certified checks. If you are short with a refinance, you still have three business days after the closing to come up with the money. If you borrow it, you will have to show the lender the source of funds. With a purchase, if you are short money, there is a problem because the deal is done at that time. If it not a lot of money, you can work it out at the closing with your attorney. If it is an amount that you will never be able to come up with, there might be nothing else to do but cancel the closing. This will create a domino effect and possible lawsuit, so it is best to know what you need before you go the closing.

Q. Does a borrower pay their own closing costs by writing out personal checks or with cash?

A. On a refinance, if it is less than $500.00, most times a personal check will work, over that amount a bank check or wire is usually the answer made out to the closing attorney’s escrow account. With a purchase, your attorney will instruct you how to bring the funds. Cash is never allowed.

Q. At a purchase closing, does the Seller have to be present at the closing?

A. No, the seller can either pre signed the deed and relevant transfer forms and execute a power of attorney to his or her attorney for the other general forms prepared and executed at a closing or can use the power for all the forms including the deed. Most often, the seller wants to go for personal “closure reasons”.

Q. How long should a closing take for a purchase and for a refinance?

A. If all parties are on time and prepared, a purchase should take between 1 and 1.5 hours. I refinance, with all parties prepared and on time 30 to 45 minutes.

Q. If a buyer/borrower does not have an attorney present, does it make for a more difficult closing for them?

A. On a purchase, YES YES YES and very risky for a buyer not to have an attorney looking out for them. Not to say, closings are confusing as far as paperwork and money, so it is best to have a professional. On a refinance, most borrowers do not use an attorney, unless they feel issues might arise. A good lender attorney can walk someone through a refinance closing very well.

Q. If an argument breaks out between the borrower and seller, who should help iron out the issues?

A. The attorneys for the parties, after consulting with their clients, will work it out. They are the best at fostering their client’s interest and usually do. The realtor might be able to help if there was property or something supposed to be included in the deal. This is where the bank attorney leaves the room and comes back when the situation is under control.

Q. What do you do to relieve the stress of your day?

A. Truthfully, stress comes from being a responsible and dedicated person and the best way I have found to relieve it is to have a successful day of closings. Life is not perfect, and things can go wrong at times, but all you can do is your best. I find the satisfaction of completing the closings, gives me a since of accomplishment and enables me to be in a position to unwind. Yes, it’s hard at times, but so far so good. I find swimming in the morning at the local Y and dreaming about white sand beaches in the Caribbean also helps!

Thanks, Gregg. I am sure you were being kind with some of your answers, classy guy that you are. Gregg is a licensed attorney in New York and Connecticut. He will gladly answer any questions directly and can be reached at Gregg@greggmfebbraiopc.com.

12 for dinner at my house, Thursday. Guess I better start planning the menu!

Dale Robyn Siegel