MISMO┬«,┬áthe mortgage industry’s standards organization, today announced the issuance of standardized closing instructions.
MISMO’s Closing Instructions are templates that lenders can use to communicate with settlement agents. The templates create a common format for closing instructions and are intended to improve communications between lenders and settlement agents, thereby reducing closing errors. By using the same templates, lenders and settlement agents will save money, reduce operational overhead, have fewer compliance violations, and be able to provide better customer service.
“Participants across the industry have collaborated effectively to produce these closing instruction templates, which enable lenders to provide consistency in what’s included and where to find it,” said Kate Steineman, senior vice president business liaison manager, Wells Fargo Home Mortgage. “Closing instructions communicate important loan details and requirements, and these templates mean settlement partners will no longer have to search through pages of instructions for information they need.┬áAs a lender, we all win through increased efficiency, quality and happy customers.”
The closing instruction templates include two distinct documents: the Master Closing Instruction Template and the Transactional Closing Instruction Template. The new templates focus on the format and organization of closing instructions, rather than legal language often included in instructions. MISMO has also developed an implementation guide to assist with adoption. Click┬áhere┬áto access the templates and implementation guides.
“The new standardized closing instructions are a real game-changer,” said Kurt Pfotenhauer, vice chairman, First American Title Insurance Company. “Industry adoption will enable settlement providers to enhance the closing experience for borrowers, while reducing the potential for last-minute changes that impact efficiency.”
The Master Closing Instruction Template contains lender instructions common to all loans closed for that lender, including items such as instructions for conflicts of interest, data security and document destruction, verification of signer identity, and recording.
The Transactional Closing Instruction Template consists of information relating to a specific loan, including borrower contact information, property information, critical dates and conditions and stipulations. The templates were developed through a collaborative effort across many sectors of the mortgage ecosystem, including national and regional lenders, title and settlement services companies, escrow companies, LOS vendors and document preparation vendors.
Following a public comment period┬áannounced in November 2019, both templates are now upgraded by MISMO to “Candidate Recommendation” status, which means they have been thoroughly reviewed by a wide range of organizations and industry participants and are available for use. The templates and related implementation guide are available to MISMO members. They are being made available to other organizations, including lenders, at no charge for internal and non-commercial use.
For more information and to access the templates and implementation guide, visit www.mismo.org.