MISMO, the mortgage industry’s standards organization, is inviting industry participants to collaborate on new closing instruction standards, which will be designed to improve communication and avoid delays during the closing process.
Currently, there is no standard lender template for closing instructions which includes information such as how funds are to be wired or disbursed and where the closing package should be sent. Because every lender uses a different format, there is often confusion among settlement service providers and other parties to real estate transactions, which leads to errors and delays that require last-minute changes or post-closing corrections. A standard template for closing instructions is inteneded to ensure that the same type of information can be found in the same place on every lender’s closing instructions.
“Closing instructions are critical for successful mortgage transactions, but there is no consistency in format from lender to lender,” Rick Hill, executive vice president of MISMO and MBA vice president of industry technology, said in a statement. “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,” Justin Ailes, vice president of government and regulatory affairs for the American Land Title Association, said in a statement. “We look forward to partnering with MISMO and other organizations on this important endeavor.”
Organizations interested in collaborating on a new standard closing instructions template are invited to participate in MISMO’s new Closing Instruction Workgroup. The workgroup will be responsible for creating a common closing instructions template; 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. Regular workgroup meetings will be conducted via conference call and in person at MISMO Summits, which are held three times a year.
To participate in the effort, please send an email to titled “Join MISMO’s Closing Instruction Workgroup” to info@mismo.org by Monday, Sept. 18, 2017. More information on this industry-wide effort is available at mismo.org.
