why do i pay for banks attorney in closing

The reason why a buyer has to pay for the closing attorney is to make sure that the lender’s legal rights are protected above all others.

Full Answer

Who pays for the closing attorney?

The homebuyer pays the closing attorney as part of their closing costs. A buyer also is required to purchase lender’s title insurance, and owner’s title insurance is optional, but recommended.

What should a buyer’s attorney do before closing?

Homebuyers should ask the lender's attorney questions about his or her representation before agreeing to the dual representation. 2. Review of closing documents. In addition to reviewing/negotiating the P&S, another important service a buyer’s attorney performs is to review the closing documents prepared by the closing attorney.

Why would a bank insist on a buyer’s attorney fee?

The bank may insist on this to protect your interests and the interests of the banks. Buyer’s Attorney Fee ($400 and up) – Depends on each State. This fee is paid to a Lawyer specializing in Real Estate Transactions who prepares and reviews all the closing documentation on behalf of the lender.

What does the closing attorney add to the package?

The closing attorney adds other documentation to the closing package that will be reviewed at closing, such as a copy of homeowners insurance, the title insurance binder, a copy of any plat map, any restrictive covenants, any home warranty. A copy of the entire package is made for the buyers.

Which of these is the lender's attorney's responsibility at the closing?

The closing attorney's primary function is to take care of all arrangements necessary to close the lender's mortgage transaction. The closing attorney coordinates all of the efforts outside of the loan approval process that allows the closing to take place.

Should I have a lawyer look at my mortgage?

It's best to have a professional look over your mortgage agreement before you sign. Even if you trust the people you are dealing with, closing on a home is complicated.

Who represents a lender in a real estate closing transaction?

Representing the lender's interests, the settlement attorney makes certain that, before disbursement of the lender's funds occurs and the deed is recorded; all of the lender's documents and the deed are complete, signed and notarized by the appropriate parties.

What are the responsibilities of the closing agent?

The duties of a closing agent include ordering title work and a property survey, assisting with obtaining requisite insurance, communicating with the lender and mortgage broker, issuing and sending the title insurance policy to both the buyer and lender, issuing the title commitment, assembling the loan closing package ...

Who pays for closing costs?

Closing costs are paid according to the terms of the purchase contract made between the buyer and seller. Usually the buyer pays for most of the closing costs, but there are instances when the seller may have to pay some fees at closing too.

How do you know if your lawyer is selling you out?

Unprofessional or unethical behavior can include:Arriving late or failing to show up for important meetings, or missing court dates.Making decisions of importance about your case without discussing it with you first.Missing filing deadlines, filing paperwork incorrectly or filing the wrong paperwork with the court.More items...•

What is a good faith estimate mortgage?

A Good Faith Estimate, also called a GFE, is a form that a lender must give you when you apply for a reverse mortgage. The GFE lists basic information about the terms of the mortgage loan offer. The GFE includes the estimated costs for the mortgage loan.

How long is the process of getting a house?

Buying a home takes about 40–50 days once you're under contract.

Who chooses closing attorney in GA?

the buyer ofIf you are buying or selling real estate... In Georgia, it is customary for the buyer of real estate to select the designated closing attorney. However, the seller may negotiate an arm's length choice, particularly when contributing to the buyer's closing costs.

What not to do after closing on a house?

What Not To Do After Closing On a HouseAvoid Big Charges on a Credit Card. Do not rack up credit card debt. ... Be Careful with Trends. ... Do Not Neglect Your Neighbors. ... Don't Miss Tax Breaks. ... Keep Your Real Estate Agent Close. ... Save That Mail. ... Celebrate!

What's true about an escrow closing?

What's true about an escrow closing? The buyer and seller must be present. The buyer's and the seller's attorneys must be present. All settlement services are handled by a closing agent.

Who prepares the closing statement?

A closing agent prepares the closing statement, which is settlement sheet. It's a comprehensive list of every expense that the buyer and seller must pay to complete the real estate transaction.

Why is Bank Counsel necessary?

The answer to this question is, quite simply, the bank needs to insure that, if the loan goes into default, the bank's interests are properly protected.

Is Bank Counsel a requirement on all commercial loans?

No. Each bank has different criteria to determine when bank counsel will be required. Frequently the size or complexity of the loan will determine if the bank will require bank counsel.

Who is the Bank Counsel?

Most commercial banks have a list of attorneys with whom they have established a relationship over the years who are experienced in handling commercial transactions.

What does the Bank Counsel do?

The role of bank counsel in a commercial loan is, primarily, to insure that the documentation utilized for the loan: is consistent with the loan terms; properly protects the bank; and is properly executed by all necessary parties.

Who pays the legal fee of Bank Counsel and how is that legal fee determined?

Customarily, the legal fee of bank counsel is paid by the borrower at settlement as a cost of the transaction similar to the fees paid to an appraiser; surveyor; or environmental engineer. In most cases, bank counsel will charge by the hour for their time spent working on the transaction.

How does Bank Counsel interact with Borrower's Counsel?

In most cases, bank counsel is, in essence, looking over the shoulder of the borrower's counsel and is reviewing the work done by borrower's counsel. I have found that the amount of time spent by me as bank counsel (i.e. which translates into the amount of bank counsel's legal fee) is closely related to the experience of borrower's counsel.

Why can't one lawyer represent the interests of both the Bank and the Borrower?

Although the bank and the borrower have some identity of interest in the transaction, i. e. getting the deal closed, in most cases there will be an ethical conflict of interest with one attorney representing both the bank and borrower. The borrower is primarily interested in completing the transaction and receiving its proceeds.

Who pays closing attorney?

The homebuyer pays the closing attorney as part of their closing costs. A buyer also is required to purchase lender’s title insurance, and owner’s title insurance is optional, but recommended. The closing attorney will typically receive a portion of the title insurance premium (for both the lender’s and owner’s policies) as their fee ...

How much does a closing attorney save?

If the closing attorney agrees to represent the homebuyer free of charge for reviewing the purchase and sale agreement and other items associated with buyer representation, the buyer can potentially save between $400 and $800.

What is a settlement agent in Massachusetts?

Most homebuyers that purchase a home in Massachusetts obtain a mortgage loan from a lender. The person/company that handles the closing (transfer of title) for the lender is known as the settlement agent. In Massachusetts, the practice of closing transactions for buyers and sellers when there is a home loan is considered the practice of law; therefore, the settlement agent for any real estate closing involving a lender must be conducted by a licensed attorney. That settlement agent is often called the “closing attorney.” If you're moving to Massachusetts, this part of the closing process may be different than the state you're moving from.

What is a closing attorney in Massachusetts?

That settlement agent is often called the “closing attorney.”. If you're moving to Massachusetts, this part of the closing process may be different than the state you're moving from. The legal fees for the closing attorney is one of several closing costs a homebuyer is responsible for paying at closing. That closing attorney represents the lender, ...

What is a note in a mortgage?

The note is a contract for the homebuyer/borrower to repay the loan based on the legal terms of the note. And the mortgage is a security instrument that a borrower gives to the lender allowing it to foreclose on the property, if the covenants and agreements in the note and mortgage are not met. The reason why a buyer has to pay for ...

What are the disadvantages of having a lender's attorney?

Disadvantages of having your lender’s attorney provide dual representation: 1. Different services. Closing attorneys provide a myriad of services before, during and after a closing. Among other duties, they review and certify title, review/prepare/record the deed, obtain and payoff existing mortgages, order and payoff municipal bills ...

What is the most important service a buyer's attorney does?

The effect is that for most real estate transactions, reviewing/negotiating the P&S, which is typically the most important service that a buyer’s attorney does, is much more substantial than just reviewing a form P&S and perhaps adding a few boilerplate provisions. Almost any experienced real estate attorney would agree that whatever the version, ...

What is the closing attorney's job?

There are five primary functions handled by the closing attorney during a real estate transaction: Title examination: The buyer and lender will both want a clear title for the property. Without clear title, the sale may become much more complicated.

Where is the closing attorney located?

While the closing attorney is typically located in or near the county where the property sits , many actual real estate closings today are handled on one or more sides using overnight mail with payments via ACH or wire.

What documents do closing attorneys need?

The closing attorney is available to explain documents such as a deed, a note, a deed of trust, a settlement statement, disbursement at the end of the transaction and loan documentation required by the lender.

Does title insurance have to be purchased at closing?

Title insurance is optional for the purchaser in a real estate closing if he or she does not have to get financing through the bank or mortgage broker; is a requirement for most all lenders at the time of purchase or refinance of real estate.

How to complain about a mortgage closing?

If you’re having issues with your mortgage, you can also submit a complaint to the CFPB online or by calling (855) 411-CFPB (2372).

Do I need an attorney to close a mortgage?

Do I need an attorney or anyone else to represent me when closing on a mortgage? It depends. Depending on your state’s laws, you may not be required to have an attorney at the closing. However, you can choose to have an attorney review your documents before closing. Technically, unless you hire an attorney to represent you at closing, ...

Can an attorney represent you at a closing?

Technically, unless you hire an attorney to represent you at closing, no one else participating in the closing exclusively represents your interests. It’s important to understand that other attorneys present at the closing – for example, the lender’s or seller’s attorney – do not represent you. These people may not be able to answer your questions ...

What is the role of an attorney in a real estate transaction?

What is the Role of an Attorney in a Real Estate Closing? A “closing” in legal lingo is the final step in a real estate transaction. A real estate closing is when the purchaser obtains title to the property , evidenced by a deed from the seller to the purchaser or stock in a cooperative apartment. Simultaneously, the seller obtains ...

What does a title closer do?

The title closer will make sure that any mortgage, judgments or liens are paid off and that any new mortgage will be recorded along with the deed. The purchaser will leave with only a copy of the deed as it will be recorded by the title closer in the county clerk’s office once the closing has concluded. The title company insures the purchaser as ...

What does title company do?

The title company insures the purchaser as to the ownership and also the lender that their mortgage has priority and is valid. Once the title closer is satisfied with the documentation and has provided the title policies, the closing is officially concluded and the purchaser will be provided with the keys and the seller will receive the checks.

Who is responsible for preparing deeds and governmental transfer documents?

The seller’s attorney is responsible for preparing the deed and governmental transfer documents which will be signed at the closing by the parties and for obtaining any payoffs and appropriate checks to pay the liens or judgments that may have been presented in the title report against the property or the seller.

Who is responsible for bringing the correct checks to the table?

The purchaser’s attorney is responsible for having the purchaser bring the correct checks to the table, explain the lender’s documents, and ensure that the title company is insuring the purchaser’s title to the property.

Do all complications have to be worked out before closing?

Ideally, all of the complications have been worked out before the parties get to the closing table, although occasionally an issue will arise during the final walk-thru of the property that will need to be addressed.

Do bank attorneys have to have all closing numbers?

If there is a bank attorney, he or she is required to have all of the numbers ahead of time so that they can complete the closing disclosure that will provide a detailed itemization of all fees to be paid at the closing and an exact number that the borrower/purchaser will be paying and the seller will be receiving.

What does the closing attorney do before closing?

Before Closing, the closing attorney’s office performs a title search of the property, and collects and gathers information and documentation, as well as funds from the lender and the buyer, assembling it all in anticipation of Closing.

What is a closing attorney?

The closing attorney represents the buyer in the buyer’s purchase of real estate, or refinance of a mortgage loan. The closing process can be divided into three parts: Pre-closing, Closing, and Post-Closing. Here are some of the responsibilities and tasks of the closing attorney.

Where does closing take place?

CLOSING. All the preliminary activity leads up to The Closing, which usually takes place at the closing attorney’s office. The closing attorney and the buyers attend, of course, and usually their realtor and occasionally the lender. The closing attorney reviews all the documentation involved in the transaction with the buyers.

What to bring to closing?

Information Gathering. One of the main tasks for the closing attorney’s office is gathering information from a variety of sources, and assembling it for closing, including things such as: 1 Homeowners insurance policies and premiums 2 Homeowners Association Dues (which are collected and/or prorated at closing) 3 Termite reports, home inspections, other costs to be collected at closing 4 Home warranty information 5 Realtor commission information

Bank Says I have to use their Attorney???

So the bank has a few attorneys that they use for closing. Although I am paying for the representation they want me to use one particular attorney. They are being very adamant. Well my loan officer is.

Comments (10)

No. An attorney is supposed to protect YOUR interests. It sounds like the loan officer's interest to me. You need to be very adamant. I think it may be illegal for them to require a particular attorney, but I'm speaking off the cuff.

What is the money rule?

It's called the money rule, "He who has the money makes the rules." There are a lot of aspects of business that aren't fair but regulation keeps the playing field leveler than if businesses were able to run wild with no oversight. The bank and those lawyers all have minimum rules and guidelines they have to go by.

Does passing the cost to borrower make any sense?

So both in terms of interest and control, borrowers have no benefits in this activity. So passing the cost to borrower doesn't make any sense.