Posted by anna/IL on 3/25/05 7:07am
Msg #27603

what's do they mean by wet or dry purchase?

I was asked if IL was a wet or dry purchase state....what does that mean?

Reply by Shannon/Va on 3/25/05 8:23am
Msg #27616

Not sure if this is it but here in Virginia, we have what is called 'The wet settlement act' which means that a title company or attorney is not suppose to close a loan that isn't funded. Many people close the loan, then hold on to the documents before recording them because they are waiting for it to be funded. Here, we have to be funded before we close. Though there are many who don't do it. It is easy to get around, sad but true.
Hope this helped.

Reply by PAW_Fl on 3/25/05 9:47am
Msg #27627

Wet purchases mean that all monies are collected and disbursed at closing. This is sometimes referred to as "table funding".

Dry purchases mean that all monies are collected and disbursed after closing by some previously agreed to arrangement.

FL is a table funding state in which the buyer provides funding prior to closing, the settlement company holds those funds in escrow and prepares disbursement checks to be distributed to the seller, broker, insurance companies, etc. immediately when pen is placed to paper.

I don't know if IL is a wet state or not.

Reply by Paul_IL on 3/25/05 11:02am
Msg #27633

In IL funding normally takes place at the closing table for a purchase and funds are disbursed at that time.

Reply by Melanie~~MS on 3/29/05 10:44pm
Msg #28415

Wet or Dry closings are determined on the HUD, whether or not monies are due at closing table. If monies are due from borrower to be enclosed with docs upon their return, IT is a WET closing. No monies is dry.

Reply by PAW_Fl on 3/30/05 7:43am
Msg #28457

Wet or dry is not determined by the HUD. Wet or dry IS determined whether or not disbursement is made at the closing table. There is always monies that have to be exchanged and indicated on the HUD, whether or not the borrower is receiving any or not. Title company fees must be paid, existing loans must be paid off, brokers must be paid, etc. These are the disbursements that the settlement officer must make. If the disbursements are made at the same time as closing, then it is a wet closing.

Refinancing is typically not wet since disbursement of funds is not done until after the expiration of the RTC. If there is no RTC, then it is possible to have a wet closing, but highly unlikely since only the borrowers/owners will be present at the closing and typically the proceeds to be distributed to the borrower/owner is not included with the refinance document package.

Collecting a check for a shortage as indicated on the HUD, from the borrowers in a refinance is not considered to be a disbursement and is NOT considered to be a wet closing.