11 Ways to Keep from Getting Fooled at the Closing Table
In todays economy, it is more important than ever to be fully aware of what is going on with your home loan. That pile of mortgage papers you sign could contain fraud or errors that expose you to massive costs or even criminal charges. Here’s how to protect yourself.
Request your loan package early
Ask your lender to give you a copy of your loan documents one or two days before your closing so you can review them. Make your request a week or two in advance.
Take your time
Closing day, with all the mortgage papers, escrow papers, title insurance, tax and other documents, can seem bewildering. Don’t feel pressured. Read every document slowly, carefully and thoroughly, paying extra attention to the HUD1 and Truth in Lending statements.
Ask for help with words, terms or conditions you don’t understand. “Most of the verbiage is boilerplate and cannot be changed, but you can correct errors,” Booth says. If you believe you see an error, point it out, respectfully, and get it fixed to your satisfaction, not explained away, regardless how long it takes.
Get an attorney
You’ll probably understand the mortgage documents if you read them carefully. But if you’re uncomfortable, hire a real-estate attorney. The few hundred dollars spent are a drop in the bucket next to the hundreds of thousands of dollars at stake.
Ensure that a lender’s rep attends your closing
Your loan officer not only can answer your questions but will be the only one with authority to make corrections.
Blow the whistle
Report suspected mortgage fraud to the Consumer Financial Protection Bureau online or by calling (toll-free) 855-411-2372. Or contact your state’s licensing authority or attorney general’s office.
After a refinance, call your new lender within a week to make sure that your old mortgage was paid off and the new one is recorded, says Ed Gerding, senior fraud and risk strategist at CoreLogic.
Decline to sign
If you’re given a blank document to sign, or even one that contains blanks, don’t sign it, Gerding says.
Even though your banker or real-estate agent recommends a title insurance agent, shop around. Screen agents by calling your state agency that issues business licenses. Ask if the company is licensed and about any complaints filed against it. In some states, you can check online.
Find deep pockets
Agents affiliated with large, national title companies have more resources to cover consumers’ losses in case of theft, Bortner says.
Occasionally, an unscrupulous title agent takes your money and does not issue a title insurance policy. Keep all your closing documents and watch for your title insurance policy to arrive in the mail within 60 days. If it does not and the company doesn’t have a solid explanation, report it to your state insurance commissioner.