Commercial Closing Checklist

Standard Operating Procedure: Commercial Closing Operations

Document ID: SOP-TR-CC-409
Effective Date: October 24, 2023
Version: 4.2
Review Cadence: Semi-Annual
Target Audience: Closing Operations, Commercial Underwriting, Legal Counsel, Escrow Agents, and Treasury Management.

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1. Executive Summary & Scope

1.1 Purpose

This Standard Operating Procedure (SOP) dictates the mandatory operational workflow, verification criteria, and quality assurance gates required to execute a commercial real estate or corporate debt closing at Template Registry.

1.2 Operational Boundaries & Regulatory Standards

This SOP governs all transactions exceeding $1,000,000 USD involving commercial assets, syndicated loans, and multi-party escrow arrangements. Operations must strictly adhere to:

• RESPA (Real Estate Settlement Procedures Act): For disclosure and fee integrity.
• FinCEN (Financial Crimes Enforcement Network): Beneficial ownership and anti-money laundering (AML) compliance mandates.
• UCC (Uniform Commercial Code) Article 9: Perfection of security interests and priority filings.
• SOX (Sarbanes-Oxley Act): Financial reporting and internal controls integrity.

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2. Prerequisites & Tool Requirements

2.1 Software Access & Platforms

• Encompass / CoreLender CRM: Loan origination system and pipeline tracking.
• SoftPro / ResWare: Title, settlement, and escrow accounting software.
• Intralinks / Box (Secure Enclave): Cryptographic document exchange and digital closing room.
• OFAC Sanctions Scanner: Real-time counterparty screening tool.
• State UCC Filing Portals: Direct electronic interface for state filing offices.

2.2 Certifications & Clearances

• Notary Public / Remote Online Notary (RON): Licensed within the applicable jurisdiction.
• Escrow Officer Certification: Minimum 5 years commercial closing experience.
• Compliance Officer Clearance: Mandatory sign-off for PEP (Politically Exposed Persons) and OFAC matches.

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3. Roles & Responsibilities (RACI Matrix Table)

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4. Step-by-Step Operational Procedure

Phase 1: Pre-Closing Verification & Due Diligence (T-10 to T-3 Days)

• 1.1 Validate receipt of fully executed Purchase and Sale Agreement (PSA) or Credit Agreement within CoreLender CRM.
• 1.2 Run comprehensive OFAC and FinCEN screening on all borrowing entities, guarantors, and beneficial owners holding $\ge$ 25% equity interest.
• 1.3 Confirm Title Commitment is received, review Schedule B-1 (Requirements) and Schedule B-2 (Exceptions), and clear all actionable encumbrances with Title Counsel.
• 1.4 Verify receipt of current insurance certificates meeting minimum policy limits, naming Template Registry as additional insured and loss payee.
• 1.5 Reconcile all preliminary Closing Disclosure (CD) or Settlement Statements (HUD-1 equivalent) against loan fee schedules.

Phase 2: Document Preparation & Execution Setup (T-2 to T-1 Days)

• 2.1 Generate final loan and security documents via the legal document engine (Promissory Notes, Mortgages/Deeds of Trust, Guaranty Agreements, UCC-1 Financing Statements).
• 2.2 Transmit document packages to Intralinks secure enclave for review by Borrower Counsel and Escrow Agent.
• 2.3 Establish wire transfer instructions via secure, multi-factor authenticated callback protocol (verbal confirmation using pre-established out-of-band phone numbers).
• 2.4 Schedule execution session (in-person or Remote Online Notarization via secure platform with credential analysis).

Phase 3: Closing Day Execution & Funding (Day T)

• 3.1 Execute identity verification (Government-issued photo ID check) for all executing signatories.
• 3.2 Supervise the execution of promissory notes, loan agreements, and recordable instruments. Verify all wet-signatures or cryptographic digital signatures (e-Sign compliant under ESIGN Act and UETA).
• 3.3 Conduct final pre-funding sweep of the county recorder's index for intervening liens, judgments, or bankruptcy filings.
• 3.4 Authorize wire disbursement of loan proceeds to Escrow Agent trust account upon receipt of executed documents and title bring-down endorsement.
• 3.5 Confirm receipt of funds by payee and generate automated transaction ledger entry in SoftPro.

Phase 4: Post-Closing Perfection & Archival (Day T+1 to T+10)

• 4.1 Submit UCC-1 Financing Statements to the respective Secretary of State filing portals. Verify acknowledgment receipts.
• 4.2 Transmit original Mortgages/Deeds of Trust to county recording office via e-recording service.
• 4.3 Collate all executed closing documents into the permanent digital vault (Box Secure Enclave) and tag with metadata.
• 4.4 Issue final closing binder (physical and digital) to Borrower, Investor, and Accounting within 10 business days.

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5. Quality Assurance & Verification Criteria

5.1 Audit Checklist

• Document Integrity: Zero missing schedules, exhibits, or notarization stamps.
• Mathematical Precision: Settlement statement debits and credits balance to the exact cent ($\pm $0.00$).
• Regulatory Timelines: Disclosures delivered within statutory notice periods (e.g., TRID rules where applicable).

5.2 Tolerance Thresholds & Acceptance Benchmarks

• Wire Variance Threshold: $\pm $0.00$ tolerance for principal disbursement; administrative fee adjustments capped at $$50.00$ require written managerial waiver.
• Filing SLA: UCC filings must be submitted within 24 hours of funding; recording documents must be submitted within 48 hours.

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6. Practical Troubleshooting Scenarios

Scenario A: OFAC / Sanctions Screening False Positive on Closing Day

• Trigger: An entity or individual name triggers an exact or near-match on the OFAC SDN list during the T-0 pre-funding sweep.
• Immediate Corrective Action Protocol:
  1. Halt all disbursement and execution activities immediately.
  2. Pull the specific matching criteria (DOB, address, registration ID) and compare against internal compliance records.
  3. Engage the Chief Compliance Officer (CCO) to review secondary identifiers.
  4. If verified as a false positive, document the rationale in the compliance audit log, obtain CCO digital sign-off, and proceed with closing. If confirmed true match, freeze transaction, file Suspicious Activity Report (SAR) via FinCEN portal, and notify Executive Leadership.

Scenario B: Wire Discrepancy or Authentication Failure

• Trigger: Escrow agent requests wire redirection at the 11th hour, or callback verification fails due to unreached phone numbers.
• Immediate Corrective Action Protocol:
  1. Suspend wire authorization immediately. Do not release funds under any circumstances.
  2. Initiate secondary out-of-band communication protocol using a verified, pre-existing corporate phone number on file (never use phone numbers provided in the modification request email/message).
  3. Require senior executive sign-off (Managing Director or higher) along with a notarized or medallion-guaranteed wire instruction change form if modification is legitimate.
  4. If fraud or a Business Email Compromise (BEC) attack is suspected, isolate the communication channel, notify IT Security, and log an operational security incident.