Top Factors That Delay Loan Closings

We recently sat down with our Loan Closer, Linda Thai, who has successfully closed over 150 loans since 2016, to discuss the top roadblocks we can encounter when closing a loan. Continue reading below to find the most common ones that Linda encounters:

Approval and Closing Timelines

The process of closing a loan commences once the loan gets committed/approved. During this time, the loan closer works alongside the lender, lender’s counsel, the borrower, borrower’s counsel, Title/escrow, and third party vendors to get the loan funded. As a loan closer, making sure that all parties involved are on the same timeline is challenging due to the multiple projects that every group is handling at the same time. Documents and reports must be delivered in a timely manner to prevent delays, therefore, we have to be mindful of a tight close date.

Issues with Title

The majority of title issues that arise during the closing of a loan can be solved but take substantial time. These title delays can postpone closings and can even cause the transaction to fall through altogether. Therefore, insuring that your client is aware of any outstanding issues as early in the transaction as possible will help prevent these issues from occurring.

Estoppels/SNDA’s

When dealing with Estoppels and SNDA’s, it is critical to get them processed right away due to the 30-45 day window that many tenants may have to complete their forms. There is a possibility in saving time by checking if tenants have their own forms that lenders may be able to accept. Delays have an increased chance of occurring when there are a substantial amount of tenants in a retail or office building.

Knowing your existing Lender Payoff date

Whether we are working with a CMBS lender, Banks, Life Insurance Company, Fannie Mae, or Private Money Lender, many lenders require a minimum 30-60 day advance notice to prepare a payoff demand. Some lenders may require that you payoff on a specific date of the month. It is really important to review the payoff terms of your current lender’s Note to avoid any issues with your planned closing date.