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Ask the Experts: Closing & Escrow

TRUE OR FALSE: A loan statement showing the amounts deducted from the face amount of the loan, received from the lender to a transaction, is all that is necessary for the closer to disburse the lender's funds when they are deposited.

FALSE!  The closer must also have written closing instructions detailing:

  • The documents that are to be recorded
  • Any other documents the closer is to collect from the borrower
  • The type and amount of the loan policy to be issued (or a statement that a policy is not required, if that is the case, which it sometimes is!)
  • Any required endorsements
  • Any conditions to be met prior to closing
  • Delivery instructions for the recordable documents and loan policy

In addition the closer must have (usually received by email):

  • Lender's approval of the disbursement statement
  • Final approval to close
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Important Changes to the City of Chicago Transfer Stamp Purchases & Penalties

Effective January 1, 2016, all City of Chicago transfer stamp purchases will be handled within MyDec, the online stamp purchasing website, established by the State of Illinois.

Paper forms will no longer be accepted by the City of Chicago. State of Illinois & County transfer tax forms are not affected by this change.

As of January 1, MyDec will automatically assess applicable interest and late penalty charges on the declaration at the time Chicago transfer stamps are purchased when payment for the stamps is made more than 7 days after the date of the transfer in question. Apparently, MyDec is now programmed to compare the date entered in Section 4, question 1“The earlier of the Date of Transfer or Date of Recording” field to the date stamps are purchased and, if the difference is greater than 7 days, charge interest and late penalty accordingly. Inquiries regarding this process or requests for penalty abatement for reasonable cause should be directed to taxpolicy@cityofchicago.org.

The other requirements for purchasing a Chicago transfer stamp do not appear to have been changed. All transfers as defined under the City Ordinance will still require a Full Payment Certificate (“FPC”) to be issued by the Chicago Water Department. Applications for an FPC will take a minimum of 10 business days for processing, and an FPC is good for 60 days for the authorization date listed on the processed FPC.

One of the following will be required to ensure a complete application:

  1. A copy of the Deed for the intended transaction (must be submitted if requesting an FPC for a tax exempt transaction)
  2. Title Commitment Schedule A
  3. Signed Sales Contract

Click here to access the FPC Applications.

Please keep this information in mind when you are preparing to close your next transaction for property in Chicago. If there will be any delay in the purchase of the transfer stamp the penalty and interest may be charged and should be considered at the time the stamp is ready for purchase. If the delay is a result of an issue with receipt of an FPC please contact one of Chicago Title’s Underwriters.

We strongly encourage you to contact our office with any questions or concerns. We will be happy to share with you any knowledge we have about the aforementioned penalty and interest scenario as well as discuss potential solutions to avoid the possible imposition of such penalties and interest.

Here you can find the full version of the Code referred to in this CT News Brief.