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What this task is

This task collects the final Closing Disclosure (CD) for a property that has been sold or is in the process of being sold. The CD should show:
  • The final sale price and closing date,
  • Payoffs of existing liens and closing costs, and
  • The net proceeds distributed to the borrower.
Underwriting uses this document to confirm that a sale actually occurred (or is closing) and to validate the amount of usable proceeds and liability payoffs.

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When this task is required

This task is required when:
  • An owned property is marked as Pending Sale or Sold, and
  • The transaction is being used to:
    • Eliminate an existing housing expense from the borrower’s profile, and/or
    • Generate funds for down payment, closing costs, or reserves on the new loan.
Common examples:
  • The borrower sells a departing residence and uses the proceeds for down payment on the new home.
  • The borrower closes on a sale that pays off one or more mortgages, allowing those liabilities to be removed from DTI calculations.

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Why this task is required

The Closing Disclosure serves multiple critical purposes:
  • Confirms that the sale has actually closed or is closing with final terms, rather than being hypothetical.
  • Shows exact payoff amounts applied to mortgages and other liens, ensuring these liabilities can be safely removed from the borrower’s obligations.
  • Documents the net proceeds available to the borrower, which supports:
    • Asset sourcing for the new loan.
    • Reserve calculations and cash-to-close verification.
Without the CD, the lender would be relying on estimates or incomplete information about:
  • Whether liens were fully satisfied,
  • The amount of cash the borrower actually received, and
  • The precise timing of the sale relative to the new loan.
That uncertainty could lead to incorrect DTI, reserves, or eligibility outcomes.

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Documents needed to resolve this task

To satisfy this task, provide:
  • The final Closing Disclosure for the completed or pending sale:
    • All pages, unredacted, showing seller and buyer information, property address, and settlement agent details.
    • A clear breakdown of payoffs, closing costs, credits, and net proceeds.
  • If multiple properties have been sold or are being sold, provide the CD for each relevant transaction tied to the funds or liability changes supporting the new loan.
These documents allow the underwriter to definitively connect the sale event to liability removal and asset sourcing in the borrower’s profile.