MISMO Releases ALTA-supported Closing Instructions Templates
October 29, 2019
For several decades, the title and mortgage industries have tried to develop uniform closing instructions.
However, the goal to create common formatting within the templates to ensure that information pertinent to the closing can be found in the same place in the instructions—regardless of the lender—may be nearing the finish line.
On Oct. 18, Mortgage Industry Standards Maintenance Organization (MISMO) issued new templates for closing instructions. ALTA and the Mortgage Bankers Association have been working with MISMO to create the common templates. In 2017, ALTA formed a development workgroup to develop the templates.
The templates were developed through a collaborative effort across many sectors of the mortgage ecosystem, including title and settlement services companies, escrow companies, national and regional lenders, LOS vendors and document preparation vendors. . ALTA’s Closing Instruction Working Group is led by James Lamphere, vice president of title and escrow for HomeServices of America, and Kate Steineman, vice president and business liaison manager for Wells Fargo.
The Closing Instruction Templates includes two distinct templates.
- The Master Closing Instruction Template contains lender instructions that are common to all loans closed for that lender. It includes items such as instructions for conflicts of interest; data security and document destruction; verification of signer identity; and recording.
- The Transactional Closing Instruction Template includes information relating to a specific loan. It includes items such as borrower contact information; property information; critical dates; and conditions and stipulations. MISMO has also developed an implementation guide to assist with the adoption of the new templates.
The results of this collaborative process are expected to contribute to improved communications between parties, reduced error and a better consumer experience. Benefits of common templates include:
- Efficiency
- Improved communication between lenders and settlement agents
- Reduction in delays in the closing process
- Improved consumer experience
- Cost reductions
- Fewer document changes for the loan operating system
Lender adoption of the templates is expected to reduce miscommunication and resulting errors that occur at closing due to wide variance in formats that currently exists. The templates focus on the format and organization of closing instructions rather than legal language that a lender may include in the instructions.
The Closing Instruction Templates will be available for MISMO member comment until Dec. 23. Send comments or questions to [email protected].
The comment period is intended to afford workgroup participants who worked on the proposed closing instruction templates at least 30 days’ notice prior to final release to review the templates and disclose any applicable Patent Rights (as defined by MISMO’s 2018 Intellectual Property Rights Policy http://www.mismo.org/x242632).
The new closing instruction templates and implementation guide can be accessed here.
What can you do?
- Review and comment on the templates at [email protected].
- Talk to others in the industry and inform them about this effort
- Talk to your lenders
- Ensure they review the templates and provide comments
- Ask them when they plan to offer the MISMO closing instructions
- Inform them as to how they can get more information
Contact ALTA at 202-296-3671 or [email protected].