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Spotlight
IN THE SPOTLIGHT
Victor A. Diaz
Victor A. Diaz,Esquire
Victor is the Managing Partner of Starfield & Smith's Florida office where he concentrates his practice in the areas of financial, commercial, transactional and property law, with emphasis on the representation of financial institutions involved with SBA lending programs. Victor represents numerous national, regional and local banks, credit unions and development companies. He has closed thousands of commercial transactions from complex real estate and business acquisitions to simple business startups. He is a Designated Closing Counsel for several Certified Development Companies that operate in the State of Florida. He draws on his extensive experience to provide outstanding service and legal representation to his lender clients. Victor has been recognized for possessing the highest levels of professional skills and ethics with an "AV Preeminent Rating" from Martindale Hubbell. 

In addition to his work as part of the Starfield & Smith team, Victor's interests include economic development, job creation, entrepreneurship and philanthropy. This is reflected in the volunteer and leadership roles he has filled including President of the Hispanic Chamber of Commerce of Central Florida, Legal Counsel to the Hispanic Business Initiative Fund and Chairman of the Board of Directors of the Maitland Art and History Association. 

ADMISSIONS:

  • Florida

To read more about Victor, click here
  

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FEATURED ARTICLE FeatureArticle

Best Practices: Closing Instruction Letters     

By: Jessica L. Conn, Esquire 
Jessica L. Conn
Jessica L. Conn, Esquire

The last few days before a closing can be a hectic time. Each party has its own responsibilities and everyone must make sure that there is an agreement as to when and how a closing will occur. No matter how chaotic this time can be, lenders should consider preparation of  written closing instructions to be a priority.

Any time a title agency or escrow company is handling a closing and disbursing funds on a lender's behalf, the lender should obtain a closing protection (aka "insured closing") letter. By obtaining a closing protection letter, the lender may be indemnified by the title insurance company against the actions of the title agent. However, in order for such indemnification to be effective, the lender must be sure to comply with the terms set forth in the closing protection letter. The ALTA closing protection letter provides that the lender is indemnified:

"[provided that the] loss is solely caused by:
  1. failure of the Issuing Agent or Approved Attorney to comply with Your written closing instructions that relate to
    1. the disbursement of Funds...;  or
    2. the obtaining of any document, specifically required by You...;  or
  2. fraud, theft, dishonesty, or misappropriation of the Issuing Agent or Approved 
Attorney in handling Your Funds or documents in connection with the closing..."

While each title insurance company has its own form of closing protection letter, many contain a similar provision. Therefore, in the absence of fraud, the closing protection letter may only provide protection to the extent that written instructions were provided.

It is imperative that closing instruction letters contain clear guidance regarding the various aspects of the closing. Since one of the primary purposes of the instruction letter is to set forth directions for the disbursement process, most instruction letters contain a section related to the settlement sheet. This section might include the lenders fees, the various sources of funds, including without limitation the loan proceeds and borrower's funds, and disbursement information. If the title company will be getting loan documents executed, it is also a good idea to outline the documents that are being sent to a closing and need to be executed. Most importantly, lenders should be sure to set forth the required documents to be recorded or filed, including the jurisdiction and order in which such documents should be recorded. Finally, Lenders should be very specific with respect to the requirements they have for the final title policy. If certain exceptions should be removed from or amended in the final policy, lenders can add this information to the instruction letter. It is a good idea to outline all required endorsements in the instruction letter as well.

Lenders may want to include additional information related to the transaction, as it deems appropriate. In certain states the instruction letter cannot be signed by a title agent, but in most it can be. Lender must determine whether execution of the instructions is appropriate based on the local laws and regulations governing the transaction.

For more information regarding closing instruction letters, please contact Jessica at 267-470-1188 or at [email protected].  
SeminarsSEMINARS & EVENTS


10 Pitfalls in Determining 7(a) Eligibility

Presented By:  SBA West Virginia District Office
Instructor:  Ethan W. Smith
Date:  February 9, 2016 @ 11:00am EST
Location:  Webinar

For more information about this event and/or to register, click here.

SBA Lenders Leadership Summit

Presented By:  NAGGL
Date:  February 16, 2016 - February 17, 2016
Location:  Hyatt Regency Orlando, FL

For more information about this event and/or to register, click here.

2016 Southeastern Small Business Lenders Conference

Presented By:  Georgia Lenders Quality Circle
Date:  March 6, 2016 - March 8, 2016
Location:  West Hilton Head Island, SC

For more information about this event and/or to register, click here.

TestimonialsWHAT OUR CLIENTS SAY... 

Stuart Forsyth / Market President & Chief Lending Officer / HomeBanc, N.A.  

We rely upon Starfield & Smith as our compliance counsel for our SBA lending business, and we  have been very pleased with the level of service that the firm provides to us. Starfield & Smith's attorneys are very knowledgeable regarding all aspects of the life span of an SBA loan, from origination to servicing to liquidation and guarantee proceedings, and they consistently provide us with prompt, responsive, and practical advice. We have found Starfield & Smith to be a particularly valuable advisor and counselor in instances where it has become necessary for our bank to request that the SBA honor its guaranty. We would strongly recommend the attorneys at Starfield & Smith to other SBA lenders that are seeking guidance on SBA compliance issues.
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