Dear Client,

Thank you for choosing us to represent you in your purchase or refinance of the above referenced real property. Our goal is to assist you in your purchase or refinance and offer you great customer service during the transaction. We hope this letter will help in the process and give you a better understanding of our role in the closing transaction.

Closing Information:

Your closing has been set up to close at office listed above. The target closing date referenced above (if any) is TENTATIVE only and is subject to change. (Note: it is typically the buyer’s/borrower’s responsibility to schedule a closing with our office. Whether or not a target date is listed above you or your agent should call to verify your closing appointment). Various factors can delay the closing such as a lender not sending the closing package in a timely manner (to ensure quality representation of our clients we require the package to be sent to our office at least 24 hours in advance and any delay could cause a postponement in your closing), a lengthy title search, our office not having all of the needed information to close on your loan, just to name a few. We will make every reasonable effort to close by the requested date.

If the timing of your closing date is extremely important (ie, you are selling your house and buying another house to move into with the funds, you will be unavailable after the target date, etc.) please call our office and advise us of your situation. In addition, it would be wise to notify your lender of the important of such a closing date. In North Carolina, “closing” does not occur until the documents are actually recorded in the Register of Deeds. This means that money cannot be disbursed, and often keys cannot be handed out, at the closing. It is the normal practice of our firm to do closings in the morning and send documents down to record in the afternoon. Please keep this in mind as you schedule deliveries and utility appointments at your new property.

Mail Away Closings:

We understand that it may not be possible for you to attend the closing at our office. For your convenience we do offer Mail-Away closing services for an additional charge to cover overnight courier fees. If you decide on a Mail-Away closing our office will prepare the loan closing package for you to sign and have notarized, as well as provide a return overnight package for you to send the executed documents back to our office. An attorney will be available to speak with you concerning any questions you may have once you receive the package. YOU MUST HAVE ACCESS TO A NOTARY PUBLIC FOR MAIL AWAY CLOSINGS. PLEASE NOTE THAT ALL DOCUMENTS MUST BE SIGNED AND NOTARIZED ON THE DAY OF YOUR SCHEDULED CLOSING, NOT BEFORE OR AFTER.

Funds for Closing:

Because of recent developments in the banking industry, any amounts due at closing over $5000 MUST be sent via WIRE TRANSFER. (This is due to bank failures and increased fraud related to official/cashier’s checks). Under NC law, we are required to ensure that we have “good funds” at or prior to closing. In the past, this meant that we could routinely accept official bank checks and cashier’s checks. However, many banks are now placing holds on official/cashier’s checks. We will not charge any fees for incoming wires. Please ensure that your bank initiates the wire transfer so that it will arrive in our account no later than the day of closing. We will accept a personal check as long as the total does not exceed $500. If you cannot arrange a wire transfer, please contact us immediately so that we may discuss other options, including having you deposit funds up to 10 days in advance of closing to ensure that they clear and post prior to closing. Please contact our office directly to obtain secure wiring instructions.

You may call our office the day before the scheduled closing and speak with the paralegal assigned to your file for the amount you need to bring to closing. Also please understand that due to the North Carolina State Bar guidelines we cannot record any documents nor disburse any funds until we receive all funds due at closing and authorization to disburse from your lender. This means that we must receive all lender funds, your funds (if applicable), and any other funds necessary before recording and disbursing the transaction.

Representation:

In most North Carolina real estate transactions the closing attorney usually represents two different parties - you and your lender. It is our responsibility to make sure that you acquire good and marketable title to the property if you are purchasing real property. WE MAY represent you in matters concerning the title to the property, title insurance, contractual problems with potential sellers, and to help explain the covenants and conditions of your loan documentation. WE MAY NOT represent you with respect to the terms of your loan agreement with your lender. This includes your loan amount, the necessity or amount of mortgage insurance coverage, the interest rate, etc. We represent the lender to the extent that we must fully comply with their closing instructions and funding conditions for the loan. If in any event a dispute arises between you and your lender the law firm will not attempt to represent either party in the matter.

For purchase transactions we may also be asked to prepare the seller documents for closing, including the deed, lien waivers, tax forms, etc., however the firm usually assists the seller in an administrative capacity. If at any time there appears to be a conflict of interest in this limited function we will immediately notify the seller to obtain separate legal counsel and if need be we will not undertake to represent either party. Please notify us immediately if you object to any such “multiple representation”.

Title Examination and Title Insurance:

In compliance with North Carolina laws and customs we may conduct a full thirty year title examination of the subject property, or we may perform a “limited search” if we are able to find an existing title insurance policy(or an institutional deed of trust) and “tack” to that policy (or deed of trust). If we tack on to an old policy or do a limited search from an institutional deed of trust, this means that we will only search from the time and date of the existing title insurance policy or deed of trust and that we will not certify the status of the title prior to that date. Although any defects that occurred outside or before our search period would most likely not be reported in our title opinion, those defects should be covered by the title insurance company and you should receive the same coverage as if a full search was done on the property. “Tacking” enables us to complete the search quicker (a full search may take several days to a week longer to complete) and should not expose you to any increased liability. Tacking also usually allows us to obtain a “re-issue rate” from the title company who is insuring the property which in return will save you in closing costs. The cost of title insurance varies depending on the coverage amount and whether we are able to get a re-issue rate on the insurance policy. If you object to us using the tacking method, please notify us immediately to request a full title search. Also, if you have a preference for a particular title insurance company, please let us know immediately.

Surveys:

Most lenders have stopped requiring surveys to be prepared as a condition of closing the loan. If you wish to order your own survey please feel free to do so, but we request that you call us and give us the information regarding the survey. Although surveys are not usually required we still recommend that a survey be obtained for most purchase closings. If you choose not to obtain a survey, the title insurance company will not insure as to matters that would have been disclosed by a current survey, and at closing our firm will have you sign an acknowledgement regarding closing without a survey.

Attorney Services:

We have many responsibilities regarding your closing including, but not limited to, title examination of the property, scheduling and coordinating the closing, reviewing and preparing the loan documents, collecting and disbursing the funds for closing in accordance with the HUD-1 Settlement Statement, recording the proper documents, applying for title insurance and ensuring the title insurance is properly issued, and obtaining payoff information for loans, liens, etc. After closing we will make all reasonable efforts to make sure that liens of records that were paid through the closing transaction are properly removed by the secured creditor. If after reasonable efforts have been made by our firm and the creditor fails or refuses to remove the lien we will not further pursue the creditor without being further retained by the buyer or seller for that service.

Your Tasks:

Who Attends Closing:

All Borrowers MUST attend closing (unless you arrange for a Mail-Away closing). Any person or persons, including spouses that have an ownership interest must also attend closing to sign the Deed of Trust and certain other documents. If only one spouse is shown as owner of the property on title the general rule is still that both spouses must sign the Deed of Trust. If a borrower or purchaser is separated, but not divorced, their spouse must also sign the Deed of Trust unless a Separation Agreement, or memorandum thereof, has been recorded in the appropriate county that allows both spouses the power to own and encumber property in their separate name.

Powers of Attorney may be used if a party is unable to attend closing; however, if there is a lender involved the use of Power of attorney MUST be approved by the lender in advance of closing. Additionally, if our office did not prepare the Power of Attorney to be used for the closing a copy must be sent to us before closing for our review and approval. The original must be brought to closing so that we can record the document in the appropriate county if it was not already recorded. Our office will be more than happy to prepare the Power of Attorney for you (please see attached fee schedule), but we will need advance warning so that we can prepare the document and send it out for execution before closing.

Our Fees:

These fees can change if there are additional problems that arise in the title examination or with the closing. It is rare that such problems occur. Administrative costs and fees associated with your transaction (ie: title search, courier charges, overnight delivery, fees for electronic delivery of loan packages, etc.) are included in our attorney fee.

There may be additional fees in connection with your closing including, but not limited to, if you are closing a second mortgage in addition to a first mortgage, if there are excessive rescheduling issues associated with your closing, and for additional document preparation (i.e. drafting a Power of Attorney $100, Subordination Agreements $100). Out of pocket expenses such as title insurance, recording fees, lender fees, broker fees, termite report fee, home inspection fee, homeowners’ insurance premium, survey fee, etc. are not included in our legal fees. All fees are subject to change without notice.

Payment of Fees for Cancelled Closings-

When you, your real estate agent, or your bank send us a purchase contract or a title request, we set up a file, order and review title work, prepare title opinions, obtain title insurance, and do many other things on your behalf in order the prepare for closing. If, for any reason, you do not end up closing the transaction, our office will likely have already incurred expenses from third parties and put in a great deal of time on your file. In that case, we may bill you for our costs, expenses, and time associated spent on your file. Generally, this amount does not exceed $295. If you do not want us to do any work on your file, please notify us immediately so that we may stop all work.

Disclosure:

Additional Information:

There is additional information about our firm located at www.kevinhoffmanlaw.com.

Thank you for letting Hoffman Law, PLLC represent you in your transaction and please do not hesitate to contact us with any questions or concerns that you have. We look forward to working with you soon.

Sincerely,

Hoffman Law, PLLC