Believe it or not, within the real estate industry, these terms do not concern the sale or distribution of alcoholic beverages. It refers to the period in which a new buyer can take over a new property after the mortgage is considered closed.
"Wet settlement laws" demand that lending banks disburse funds within a certain period of time after the closing date of the mortgage, which may vary according to the specific state in which the mortgage occurred. Disbursement times may vary according to the state in which the mortgage took place and can range from the date of closing to within two days afterwards. Once the necessary papers have been signed, these laws protect the consumer by preventing lending banks from delaying payment.
Slang expressions, "wet funding" and "dry funding" concern the state in which the funding began. "Dry" states refers to those states where the paperwork needed to officially close a loan does not need to be completed on the day of closing. All the necessary documents needed to close the loan must be in place and approved at the time of closure when dealing with wet funding regulations.
The eight dry states include: Washington, Alaska, Arizona, California, Oregon, Hawaii, Idaho, Nevada and New Mexico and all the others are considered wet funding states. A dry closing takes place for the benefit and convenience of both the buyer and the seller and is not really a closing at all. Signing documents is the only activity at dry closings and no money ever changes hands.
A deterrent to fraud, dry funding insures the legitimacy of the transaction. There is more risk with a wet loan as the transaction moves along at a quicker pace and the seller receives funds very quickly after the closing of the sale. The definite possibility of real estate fraud must be weighed against the convenience and speed of closing the sale without the necessary paperwork in place. The bank receives the loan documentation for review after the funds have been transferred in the case of a wet loan, which in a way is like putting the cart before the horse.
You can understand the difference between wet and dry funding by doing research on these topics. An educated consumer is always the best protection against fraud and you should always approach home loans with caution.
"Wet settlement laws" demand that lending banks disburse funds within a certain period of time after the closing date of the mortgage, which may vary according to the specific state in which the mortgage occurred. Disbursement times may vary according to the state in which the mortgage took place and can range from the date of closing to within two days afterwards. Once the necessary papers have been signed, these laws protect the consumer by preventing lending banks from delaying payment.
Slang expressions, "wet funding" and "dry funding" concern the state in which the funding began. "Dry" states refers to those states where the paperwork needed to officially close a loan does not need to be completed on the day of closing. All the necessary documents needed to close the loan must be in place and approved at the time of closure when dealing with wet funding regulations.
The eight dry states include: Washington, Alaska, Arizona, California, Oregon, Hawaii, Idaho, Nevada and New Mexico and all the others are considered wet funding states. A dry closing takes place for the benefit and convenience of both the buyer and the seller and is not really a closing at all. Signing documents is the only activity at dry closings and no money ever changes hands.
A deterrent to fraud, dry funding insures the legitimacy of the transaction. There is more risk with a wet loan as the transaction moves along at a quicker pace and the seller receives funds very quickly after the closing of the sale. The definite possibility of real estate fraud must be weighed against the convenience and speed of closing the sale without the necessary paperwork in place. The bank receives the loan documentation for review after the funds have been transferred in the case of a wet loan, which in a way is like putting the cart before the horse.
You can understand the difference between wet and dry funding by doing research on these topics. An educated consumer is always the best protection against fraud and you should always approach home loans with caution.
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