3-Day Closing Process

3-Day Closing Process

Day 1 (“Circle Day”): Purchase of the Securities

  • Servicer’s counsel confirms approval and receipt of all due diligence items from the defeasance checklist, including original signatures to the defeasance documents
  • Buyer confirms they are in a position to fund into escrow on day 2
  • Borrower authorizes Medalist Defeasance to “circle” or initiate the purchase of securities to settle day 3.
  • Medalist Defeasance “circles” the portfolio of Securities through the outside broker-dealer and distributes final numbers to all parties via the final defeasance closing statement
  • Servicer’s counsel distributes the defeasance Closing Instruction Letter; and


Day 2 (“Safety Day”): Close Underlying Transaction into Escrow

  • Borrower and buyer facilitate closing the underlying transaction into escrow
  • Title company confirms receipt by the close of business:
    • Funds sufficient to close defeasance and underlying transaction from both buyer and buyer’s lender (if applicable)
    • Original mortgage release or assignment documents


Day 3 (“Closing Day”): Settle Securities and Record Mortgage Documents

  • When markets open, outside broker-dealer transfers the securities electronically to the securities intermediary for settlement
  • Servicer’s counsel instructs the title company to disburse funds pursuant to the closing instruction letter to securities intermediary in order to settle the securities trades; **NOTE: This wire must be received by securities intermediary by 2:00pm ET. Otherwise, breakage costs may apply**
  • Defeasance closes once all items are completed per the closing instruction letter.