What type of loan settlement occurs when loan funds are not available on the same day as closing?

The correct response is related to the definition of a "Dry Settlement." In this context, a dry settlement refers to a situation in real estate transactions where the funds from the loan are not available at the time of closing. This means the buyer may sign all necessary documents and complete the transaction, but the financial backing necessary to finalize the purchase is not provided immediately.

In a dry settlement, the seller might deliver the keys and the buyer might take possession of the property, although the official transfer of the title is pending until the funds are disbursed. This term is important in the mortgage process because it outlines the condition under which both parties can agree to transact even without the immediate availability of funds.

Other terms such as conditional settlement, delayed settlement, and partial settlement may pertain to different scenarios in the transaction process, but they do not specifically denote the situation where loan funds are not available on the same day as closing. Understanding the implications of a dry settlement is crucial for loan officers and buyers alike, as it affects how transactions are executed and the expectations regarding possession and ownership.