Standardized Loan Closing Instructions

I was in Austin, Texas, recently, attending the 2019 ALTA annual convention. You have to see the Barton Springs pool, by the way, if you are ever in Austin – it’s 3 football-fields long! And freezing, of course, being spring-fed water (yes, I think 72 degrees is freezing).

Here is an interesting tidbit I heard from the event: Closing agents – guess what might be coming soon to your offices? Standardized loan closing instructions! No way, you say? I don’t blame you. We’ve been complaining about the wide variety of lender instructions for YEARS! But now, a committee of ALTA folks and several lenders has come up with a template for all lenders to follow. The big ones have agreed.

Hold on, slow down . . . you know that the lenders’ legal departments will never all agree on language, so the actual wording won’t be the same for every lender. But, the location of the different topics will be the same. For example, section A.5 will contain the lenders’ fraud information; section B.11 has the lenders’ Power of Attorney directions. You still have to read the instructions, but at least you won’t have to hunt through them all for a particular requirement!

They hope to have these ready by spring of 2020. Fingers crossed!

3 thoughts on “Standardized Loan Closing Instructions”

  1. MISMO (Mortgage Industry Standards Maintenance Organization) has been working on these and other standards for more than 20 years. For those not familiar with MISMO it is comprised of volunteers from just about every industry or government related to real estate except the National Association of Realtors.

    Standardized Loan Closing Instructions have not been easy for a number of reasons. Most MISMO standards are related to data, document formats (e.g. PDF and XHTML) and processes. Closing instructions are not easily standardized, especially as to automating the processes required to comply with the instructions. Lawyers don’t use standard language for a number of reasons – state laws vary, local customs vary, terms used in forms may be subject to different interpretations, lawyers may have clauses, paragrphases, phrases an such that have been tested by the courts and so provide a degree of familiarity to the attorney and client.

    On the other hand closing instructions are a checklist. Individual instructions may have variable components that require decisions to be made, conditional elements to be approved by the lender, and so on. Closing officials may discover they can augment the instructions by maintaining records of communications with their insurers and the respective lenders for faster compliance with the closing instructions.

  2. Hello, everyone in the real estate world! According to the American Land Title Association, “uniform closing instructions” have been released by MISMO (see John’s definition of MISMO in his previous comment). Although lenders’ words may differ, at least “information pertinent to the closing can be found in the same place in the instructions—regardless of the lender.” A great step in the right direction, in my opinion.
    Go to MISMO’s website for more information about the templates and implementation guide:


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