Understand what the real estate attorney does as part of the mortgage refinance closing.
Generally in Connecticut the attorney handling the closing will be responsible for ordering the title search (which will show who owns the property and what mortgages or liens are on it); preparing the title commitment (which tells the new lender the status of title); preparing the closing documents, including the Settlement Statement (HUD-1) which shows all the costs, expenses and disbursements for the new loan; meeting with the borrowers to explain their loan documents; overseeing the signing of the loan documents; recording the new mortgage on the land records; and handling all the funds from the new mortgage (including paying off the existing mortgage and any other liens) and issuing the policy of title insurance required by the new lender. The closing attorney works closely with the mortgage lender or mortgage broker in performing these tasks. The closing attorney may also work to clear any title issues, such as improperly released mortgages or ownership issues.
Think about who you want as your closing attorney - you have a choice to make.
Typically the closing attorney can be selected by the borrower. Although some lenders have 'closed' lists that require being approved by the lender, most lenders will allow an experienced attorney who can meet the lender's requirements (such as having the proper insurance) to handle the loan closing. A lender or mortgage broker may refer the borrower to a closing attorney, based on the lender or broker's prior experience with the attorney, but in most cases the actual choice of a closing attorney is up to the borrower. Remember that no matter who selects (and pays) for the closing attorney, that attorney is representing the legal interests of the lender. So you have a choice to make on the attorney who will do your closing. The attorney provides some of the most important services involved in the closing, including explaining the loan documents and making sure all existing mortgages are properly paid off and released, so chose carefully.
Understand your closing costs, and who pays. Shop around!
The borrower pays for the costs of the closing attorney. Even though the lender requires that an attorney be used, and the attorney represents the legal interests of the lender, the fees of the closing attorney are one of the closing costs paid by the borrower. The Good faith Estimate of your closing costs (the GFE) that you receive from your lender should contain estimates of these closing costs (attorney's fee, title insurance, title search, etc.); however, those fees are set by the closing attorney, not the lender. Before you chose a closing attorney, you should ask the closing attorney what the charges will be. You should not use an attorney who is unwilling to quote at least a range of fees up front. Remember that you can seek quotes from more than one attorney. Of course, the cost of the attorney must be balanced with the services that attorney is going to provide, such as availability to answer questions, convenience of the closing, and experience.
Select a good attorney to do your refinance closing, at a good price!
A referral from your lender or broker is a good place to start finding an attorney. Usually in Connecticut that is just a referral, it is not a requirement that you use that attorney. Referrals from friends or co-workers are also helpful. But you need a real estate attorney who is experienced with refinance closings, so someone who has a good personal injury attorney may not be a useful referral. You can also use the yellow pages and an internet search, and sites such as avvo.com. Next you should call and speak to the attorney or his or her staff and get a fee quote, and make sure you understand what that quote incudes. Most attorneys offer a free initial consultation, so you may want to meet with the attorney or at least talk on the phone (consider how accessible the attorney is). Title insurance is based on a set fee schedule determined by loan amount, but you may be entitled to a refinance or reissue rate. All other fees are negotiable and will vary by attorney.
Have the closing!
Now that you have selected your attorney, and have an understanding of what the fees will be, you can have your refinance closing with confidence that your legal needs will be served at a fair price. Good Luck!
Additional resources provided by the author
Please see the links below for assistance in finding an attorney and information about how to check to see if an attorney has had grievances filed against them.