Exam 16: Closing the Deal

Wellpoint Homes has a closing pending with Fran Davis for the purchase of a new condominium. Closing is scheduled for December 1. Wellpoint has delivered all the documents for closing with the exception of the lien waivers the title company requires for closing and issuing the title insurance policy. Fran has complied with all of her requirements for closing. On November 22, Wellpoint had still not furnished the lien waivers and the escrow agent for the closing embezzled all of the funds from her pending closings, including Fran's. The escrow agent is believed to be out of the country and the money squirreled away in bank accounts around the world. Who absorbs the loss?

Which of the following is not a duty of the escrow agent?

List all of the fees that must be disclosed in the RESPA-required good faith estimate.

Ralph Watkins is a real estate attorney who owns 10% of United Escrow. Ralph refers all of his real estate clients to United for their closings. Which of the following RESPA forms must Ralph use?

Under RESPA, which of the final settlement charges cannot vary (zero tolerance)?

The escrow agent bears the responsibility for verifying the validity of check payments.

Jenna and Todd Alder are closing on their home. Their GFE disclosure put their closing costs at $4,200. When they arrive for their closing, the escrow agent explains that their closing costs will be $5,800. To determine whether there is a RESPA violation of the GFE, what will you need to know?

Explain the obligations of escrow agents under federal law.

Under RESPA currently, the RESPA disclosures are substituted for the TILA disclosures.

Once an escrow is opened, it cannot be cancelled.

The Uniform Settlement Statement is required for RESPA compliance.

Buyers are not permitted to use a builder's title company under RESPA.

Barnes Escrow services is handling the closing of a property purchase by Gramercy Stables, Inc. A contractor for the seller, Blue Grass Stables, has just completed the construction of a horse barn on the property. The escrow instructions for the two parties require that Barnes obtain a lien release from the contractor. On the day before closing, the contractor is out of the country and Barnes is unable to obtain a signed release, but has oral assurance from the contractor that he has received payment in full. Barnes proceeds with the closing because the locked interest rate for Gramercy expires in two days. Barnes:

Closings on commercial properties are not governed under RESPA rules.

Escrow instructions need not be in writing to be enforceable.

Federal laws establish those who are qualified to serve as escrow agents.

What is/are an escrow agent's responsibility when the buyer fails to deposit funds?

Karen Kimball is a clerk in the Mojave County Clerk's office. She is an excellent worker, and the two major title companies always add $5 for each transaction as a tip for her. These actions:

Annual property taxes for the home that Jane and Gavin Smith are purchasing are $2,400. The taxes are due on April 30^th of each year. The Smiths are closing on the home on July 15. Their first mortgage payment will be made on September 1. What is the maximum deposit amount that the lender can require for the Smith's account?

An escrow agent cannot be held liable for embezzlement by employees.