Payment of Personal Debts at Closing

At your closing, the Escrow Officer is responsible for clearing matters designated by the title insurance underwriter in order to issue a title policy and for complying with the terms of the contract and any lender closing instructions.  The purpose of the contract is to transfer title to the purchaser, and both the underwriter and lender are primarily concerned with making sure the transfer is done in such a way that there will be no claim and that the lender’s position will be properly secured.   Payments made as part of the closing process will include the payoff of any liens that are attached to the property and all costs associated with the closing of the transaction, such as lender fees, title policy fees, the cost of the survey, etc.

Payment of personal debts of the parties that are not secured by liens against the property and not closing costs is typically prohibited.  Lender’s instructions to the Escrow Officer typically contain language that prohibits the disbursement of loan proceeds if payments are being made for matters that do not affect title and are not a part of customary closing costs.  In addition to this prohibition, title insurance companies do not want to take on liability beyond what is required by underwriting guidelines, so Escrow Officers are prohibited from making payments for non-secured debts of the parties.


If you would like to use a knowledgeable title company conveniently located in the Heights, please give us a call.

Fidelity National Title, 1512 Heights Blvd., Houston, TX 77008 (713) 529-8800.