Participating organizations will form a Closing Instruction Workgroup, which will be tasked to create a common closing instructions template. Aside from the template, the workgroup will also develop instructions for day-to-day use of the closing instructions template; implementation guidance for lenders, closing agents, and vendors; as well as, a data exchange standard that permits the electronic exchange of closing instructions.
"Closing instructions are critical for successful mortgage transactions, but there is no consistency in format from lender to lender," said Rick Hill, MISMO executive vice president and Mortgage Bankers Association vice president of industry technology. "Lenders don't need to have the same instructions. But much like newspapers are organized into sections, it would be enormously beneficial if closing instructions followed a standard format so everybody can find the information they are looking for. We look forward to collaborating with all organizations and industry groups in this effort, so that we may create a template that works for everyone."
"Developing a standard template for closing instructions will bring greater clarity to the closing process and should result in fewer last minute hurdles," said Justin Ailes, vice president of government and regulatory affairs for the American Land Title Association. "We look forward to partnering with MISMO and other organizations on this important endeavor."
MISMO said there are currently no standards for closing instructions on information such as how to wire or disburse funds or where to send the closing package. Without a standard template, settlement service providers and other parties to real estate transactions encounter last-minute changes or post-closing corrections, the organization said.
Participants needed for new mortgage glossary
Two Black Knight execs join MBA organization
MISMO is seeking mortgage organizations interested in collaborating on the development of a set of new closing instruction standards in a move to improve the closing process, according to a news release.