The ins and outs of the mortgage legal process

So you have survived the trials of obtaining mortgage financing. Your mortgage professional sends the all clear to your realtor and the conditions are removed. Or maybe you did a refinance of your current home and are just waiting for funding day. Congrats on making it past step number one but you should be aware that you are not done just yet. This week we will take a look at what you can expect once your mortgage gets to the lawyer from your mortgage professional’s point of view.

So this is how it looks:

1. Your lender tells your mortgage professional that all conditions have been met.

2. A new department of the mortgage provider is then told to prepare the legal documents for the lawyer. This can take a day or two depending on the lender.

3. The documents are sent over to the lawyer. At this point it is commonly the paralegal who prepares the paperwork which you will sign when you meet with the lawyer.

4. They give you a call and set a time to meet.

5. You meet with the lawyer, ask your questions, sign the papers and provide any additional documentation.

6. The lawyer and paralegal complete the paperwork and send it back to the lender. Most lenders require at least two days after receiving the papers back before they fund.

7. On the pre-set day, the lawyer receives an all clear from the lender and they then go ahead and release the funds to the seller if it’s a purchase or to the current lender if it’s a refinance.

So this all sounds pretty straight forward right? If only it was that easy. Let’s take a quick look at some of the things that can go wrong.

1. Communication – even in this day and age, sometimes a fax or email doesn’t go through. That can mean a delay as we have to go back through the channels to get the paperwork resent. Other times, your current mortgage provider is slow in providing a payout statement. More delays.

2. Proper ID – if your driver’s license is expired and you don’t have a passport, the lawyer is not able to meet one of the conditions. They are required to verify your identity as per the requirements but without proper ID they cannot do so and yet another delay could ensue.

3. Personalized cheque – lender’s require your void cheque or PAD form from your bank to be personalized.

4. Debt reductions – if debt payout is a condition of your mortgage financing you should be sure to have account numbers or statements of the accounts for your lawyer so they are able to obtain a current balance easily.

5. Delays can still happen – you may be sitting in a moving truck waiting for the keys. Your realtor needs the all clear from the lawyer before they can give them to you. However, if the person who purchased the house or the person who purchased yours has a delay in funding then you will all have a delay in funding. Or if there is a delay in the wire transfer. Or…you get the idea. Your legal team is doing their very best to ensure you get into your new home on time but there can be things beyond their control.

If you have opted to go with a legal service to complete your refinance then you should be aware of all of the above. The other part you need to be aware of is that the nice person sent to meet with you to sign the paperwork is not a legal professional. They are there only to witness your signatures and to verify your identity. They are not able to answer any questions at all so you will have to go back to your mortgage professional for those answers.

So there you have it, a mortgage professional’s view of the legal process. We have a vast array of very well qualified lawyers here in Central Alberta so you are certainly in good hands. Have a great week.

Pam Pikkert is a mortgage broker with Dominion Lending Centres – Regional Mortgage Group in Red Deer.

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