Funding numbers at real estate closing are important to speed up the closing process. The seller’s principal function at closing is to sign and deliver the deed that conveys title to the property. Once this is done, the seller usually wants to know about payment. The answer to this question sometimes leads to anger, frustration, or hard feelings toward the title company. When the seller understands in advance how the closing process works, these difficulties can be avoided. Technically, the closing is not complete and title is not passed to the buyer until all the performances required by the contract have been completed. Foremost among these is delivery of the entire purchase price to the escrow agent, the title company. While the buyer may have already delivered the cash portion, the buyer’s lender may create some delay in delivering the financed portion of the purchase price. Funding Numbers shorten the length of the delay is determined by lender’s processes for conducting business, and, of course, the time of the month when the closing takes place. Some lenders include a check with the loan package and allow the title company to call prior to closing to get Funding Numbers. In rare instances, the lender provides the funds and relies on the title company to disburse without further authorization when the title company has complied with lender instructions.  However, a large number of lenders require the title company to fax a package of signed documents to the lender’s office for review. When satisfied, the lender will provide the title company with “Funding Numbers,” which means the documents have been accepted and that the money has been received. Without a funding number from a lender who requires one, the title company does not have “good funds” to disburse. Not only will the seller be waiting for his check, but the Realtor’s commission check and the payoff itself will be delayed until the funding number comes through. When working with a lender who requires faxes copies of signed documents before issuing a funding number, a closer may call the Realtor to suggest that the buyers arrive half an hour before their scheduled closing to complete the loan package. Then, while the purchase portion of the closing is taking place, loan documents can be faxed to the lender and funding numbers may come in before the end of closing. Of course, during busy times like the end of the month, when lenders may not be at their desks, there still may be a delay in getting funding numbers in a timely manner.  In most cases, funding can still occur on the same day the documents are signed, but when signing occurs late in the day, it may be the following business day before funds can be disbursed. If a loan package and check arrive at 4:00 p.m., for example, and funding numbers come from a lender in the Midwest or on the East coast, then the title company may need to wait until morning to fund. When sellers and buyers are educated about the funding numbers process, a great deal of closing table anxiety can be avoided. The face-to-face meeting of all parties is a critical piece of the closing transaction. Following a few basic steps will ensure that documents are correct and the transfer of title is unblemished. Corrections to documents not using Fumding Numbers that are required after closing are often an inconvenience to the borrowers and time consuming to lenders and title companies. Proper execution of documents is fundamental in turning our mutual customers into satisfied customers. Title closer to review and confirm proper identification of all parties prior to signing any documents. Identification must be a government issued, picture identification. Picture identification from Costco, a health club, etc. do not meet the standard.  Title closer to obtain and fax required documentation needed for any required funding approval prior to disbursement as follows: If lender representative is present, inquire if lender representative will fax for funding approval. Fax documentation for funding approval at the beginning of the closing to insure lender’s funding approval/number is available at the finalization of the closing. Title closer is not to disburse without obtaining funding approval or funding number if required in loan closing instructions.  Often there are accessory Funding Number Fees, such as an increased Funding Number for Out-of-town Lenders of $50.00.  After the closing has taken place, the closing agent will be instructed by the closer to fax certain conditions for the closer to review/clear. Once cleared, a funding number will be issued. This funding number tells you, the correspondent, that we have a good closing and when the file is received for purchase (provided there have been no changes to HUD approved, etc. after the funding number is issued and the closing agent follows all instructions and returns all documents properly executed), the loan will be purchased as outlined in these procedures.  This program expedites the processing since the bank’s approval criteria has been pre-approved by the SBA to meet the SBA’s underwriting requirements. The SBA’s stated service level agreement to provide Funding Numbers is 24 hours.
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