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c. Disbursement of Mortgage Proceeds (01/24/2022)
i. Standard for Disbursement of Mortgage Proceeds
The Mortgagee must verify that Mortgage proceeds are disbursed in the proper amount to the Borrower and the seller, or in the case of a refinance transaction, to the debt holder. At closing, the Mortgage proceeds disbursed by the Mortgagee and the cash from the Borrower must equal the total Acquisition Cost or refinance cost.
ii. Required Documentation for Disbursement of Mortgage Proceeds
The Mortgagee must obtain the final acknowledged Closing Disclosure or similar legal document from the settlement agent signed by the Borrower. If the seller’s Closing Disclosure or similar legal document is provided separately, the Mortgagee must obtain from the Closing Agent a copy of the final Closing Disclosure provided to the seller to keep in the case binder.
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II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT A. Title II Insured Housing Programs Forward Mortgages
7. Post-closing and Endorsement