Once you have executed a purchase and sales agreement for your home and have submitted a loan application to your mortgage lender, the closing process has commenced. This procedure inevitably leads you to the office of the closing attorney. Following is a general explanation of the role of the closing attorney, the tasks the closing attorney will perform, and what will take place at the closing. Please understand that unless specifically engaged by the buyer, the closing attorney represents the interests of the mortgage lender and not the home purchaser. The tasks we undertake as the closing attorney are as follows:
Once we receive a legal order to perform a closing, we engage a qualified title examiner to prepare a title examination and provide us with a title abstract. The title examiner generally reviews the county Registry of Deeds records for a period of at least fifty years. The title abstract is the written report provided by the examiner. We review the report in great detail,to ensure that the current owner possesses “good record and marketable title,” — ie. that the current owner has clear and unhindered ownership of the property and is free to transfer it to you. If the home you are buying will be your residence, we are required by Massachusetts law to certify the state of title to you at the time of closing. Our “title certification” will detail all matters pertaining to the title and ownership of your home.
Sometimes referred to as a “plot plan,” this is a tape-measure survey of the land being mortgaged. The main purpose of the plot plan is to determine that improvements on the land, i.e., the home you are purchasing, are within the bounds of the land being purchased and do not encroach onto the land owned by your neighbor. The plot plan also includes a certification that when the home was built, there was not a violation of municipal zoning laws. It is important to note that the mortgage survey does NOT establish your exact lot lines. If you wish to place a fence or establish the boundary lines, you will need to separately engage an engineer or surveyor.
Municipal Lien Certificate
A “lien” is a claim against a property by someone to whom money is owed by the property owner. A municipal lien certificate is obtained from the city or town treasurer’s office and reports any outstanding real estate taxes or utility bills owed to the city or town by the current owner. This document is recorded along with the deed and mortgage immediately following the closing. The act of recording protects the new owner from claims by the town that taxes were owed by the previous property owner and constitute a lien against the real estate.
The title to a property is a bundle of rights of ownership. It is vital to establish clear ownership when transferring property. The lender will require title insurance to protect then lender in the event they become the owner of the property, and a defect in the title is discovered. You will be provided the option of purchasing an “Owner’s Title Insurance Policy,“ which provides the homeowner the same protection. Please see our discussion of the owner’s title insurance within this page.
After you have applied for a mortgage loan, you will receive a “good faith estimate” which details the costs your lender estimates you will be charged at the closing. With recent changes in the law, the charges at closing will be very close to the amounts your loan officer has disclosed to you. Great strides have been made to prevent surprises at the closing when it comes to finances.
This is the day you have waited for. At the closing, which generally occurs at the office of the lender’s attorney, you will sign the documents needed as a condition of the purchase. These include the promissory note documenting the terms of your loan; the mortgage, which provides the lender with a lien against your home,;and the settlement statement, which lists all financial aspects of the transaction. The seller presents a deed to your new home. The closing attorney will explain each document to you, and provide multiple pens. Once all documents have been signed, there is only a single step remaining before home ownership is complete.
After closing documents have been signed, certain of these will be sent to the county Registry of Deeds for recording. The deed and mortgage from your closing are scanned into the public records and certain essential facts are noted on the public recording system. The closing attorney’s office will update the title examination from the time it was completed through the second before the documents are entered into the public system.