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1. Purpose
This SOP covers how SLA collects documents and underwrites deals that involve an A→B purchase, a B→C end-buyer loan, or both. Keep A→B light when it is same-business-day; escalate when the gap is more than one business day.
2. Definitions
Transactional funding (A→B loan)
A short-term loan SLA makes so Party B can buy from Party A. B takes title. The loan is meant to be paid off quickly — often the same day — usually from a B→C sale or refinance. Focus: B can close A→B cleanly; identity and authority; title and payoffs support the purchase.
Double close (full A→B→C transaction)
Two closings on the same property in sequence:
| Leg | Parties | What happens |
|---|
| A→B | Seller (A) → Investor / wholesaler (B) | B buys and takes title (often briefly) |
| B→C | Investor (B) → End buyer (C) | B sells to C |
A double close is the entire A→B then B→C path. It is not an assignment of contract — B actually takes title, then sells to C.
How SLA can participate
| Scenario | What SLA funds | What this SOP applies |
|---|
| B→C only | Full RTL (or similar) loan for C | A→B is still diligenced lightly (docs + UW notes) so title into C supports SLA's lien; then full B→C RTL file |
| Transactional only | Short-term A→B loan for B | Full transactional (A→B) doc collection + brief UW for that loan |
| Both (stacked) | Transactional loan for A→B, then full loan for C on B→C | Run both A→B (transactional) and B→C packages; coordinate sequential funding and payoff of the A→B loan at B→C |
3. Same-business-day vs multi-day
| Timing | Rule |
|---|
| Same business day | Streamlined A→B document collection (Section 4.1) |
| More than 1 business day between A→B and B→C (or B holds title overnight or longer) | Add the multi-day extras in Section 4.3 |
Default: both legs at the same title / escrow company. More than one title company needs manager approval.
4. Document collection
4.1 A→B — Transactional funding / A→B leg of a double close
Goal: confirm B has the right to buy, A has the right to sell, and title supports the deal. Verify B's identity. If B uses an LLC, collect entity docs; if B closes in a personal name, skip the entity package (streamlined).
Loan application and terms
Loan application
Term sheet
Identity & entity (Party B)
Government photo IDDriver's license or passport, for all signers
OFAC / sanctions screenThe individual; if an entity, the entity plus its signers and beneficial owners
If an entityArticles of Organization, Operating Agreement, Certificate of Good Standing, EIN confirmation, and a lightweight signing resolution / authority to sign
Contract
Fully executed A→B PSAWith every amendment and addendum
B→C PSAFor the consistency check when a B→C (or stacked) deal exists
Title & escrow
Title commitmentNot required at 125% coverage on A→B
Title agency E&O evidence
Tax certificate
Wire instructionsTitle / escrow trust account — call-back verify before any SLA wire
Current payoff demandsFor the mortgages and liens paid at A→B (and / or B→C if the same day)
Preliminary / draft ALTAFor the A→B leg, and the B→C leg when applicable
Written sequential closing instructionsWhen B→C is the same day or SLA is also on B→C
CPL naming SLARequired when SLA is funding (transactional and / or B→C): correct lender name, property, loan amount
Same-day A→B — do not collect unless escalated: B's full credit / income / bank package sized like a long-term RTL; 125% title coverage on A→B; full seller (A) KYC without red flags; waiting for the A→B deed to post of record before funding if title will insure under written escrow plus date-down / gap coverage.
4.2 B→C — End-buyer loan (B→C only or stacked)
- The same documents as a typical SLA RTL loan (the standard checklist by reference — Resources › Processing › Document Requirements).
- CPL naming SLA for the B→C loan closing.
- Cross-check that the A→B package is complete when this is a double close or a stacked deal.
Double-close title / tax notes (expected)
- Title may still show Party A's liens and mortgages. There is often no way for the B→C commitment to omit them until A→B records and the payoffs release. Require payoffs and escrow instructions so they are paid at or before B→C disbursement.
- The tax certificate may still show Party A, or A's delinquencies. Reuse the A→B tax certificate on same-day closes; refresh it if more than 1 business day passes. Confirm delinquencies are collected on the CD / ALTA.
4.3 Multi-day extras (more than 1 business day between legs)
Add to the A→B / hold-period file:
- Full RTL document collection, including insurance documents and borrower / guarantor background.
- Request UW Manager approval before document collection, to confirm which documents need to be collected.
5. Underwriting (brief)
5.1 What to underwrite by scenario
| Scenario | UW focus |
|---|
| Transactional only (A→B) | B's identity and authority; PSA and title support the purchase; payoffs; the repayment source for the short-term loan; CPL and wires; same-day vs multi-day |
| B→C only | Full RTL UW on C, plus the light A→B review (5.2) so collateral and title into C are clean |
| Both (stacked) | Transactional UW on A→B and full RTL UW on C; confirm the A→B loan is paid off at B→C; sequential funding order |
5.2 Light A→B review (every scenario that touches A→B)
Confirm:
- B has the contractual right to buy (PSA; assignment if needed).
- A can convey (vesting on the commitment matches the seller; title requirements cured).
- Title / escrow will produce clean title for the next step (into B for transactional; into C with SLA in first lien for B→C).
- B's ID and OFAC are clear; if an LLC, the signer is authorized.
Red flags — escalate: PSA / assignment incomplete; a property or party mismatch between A→B and B→C; seller is not the vested owner (uncured); unresolved Party A monetary liens without a payoff plan; title refuses a sequential close or will not CPL SLA; anti-flip / seasoning restrictions; wire instructions changed after the call-back; split title companies without approval; a gap over 1 business day without the Section 4.3 extras.
5.3 B→C / RTL review
Apply standard SLA RTL underwriting. On double closes, do not clear-to-close until every Party A (and any A→B lender) monetary item has a payoff / escrow plan and the loan policy will insure SLA's first lien on C.
5.4 Funding controls (all SLA wires)
- Written sequential escrow instructions when there are two legs (or transactional + B→C).
- Hold SLA's proceeds; disburse only when the conditions are met.
- If stacked: the transactional A→B loan is paid off at B→C per the ALTA.
- Wire call-back from an independent phone number; log it; re-verify any change.
- Dual approval per the SLA wire policy.
The order when both legs are ours
- A→B documents and funds
- A→B deed in escrow
- Payoffs approved
- B→C documents — the deed and the SLA mortgage
- Date-down
- Disburse
- Record promptly
5.5 Clear-to-close checklist (add-on)
- Scenario identified: transactional / B→C only / both.
- Timing path followed: same-day vs multi-day.
- Document collection complete for that scenario.
- UW conditions satisfied; no open red flags without a manager exception.
- CPL naming SLA in the file.
- Wire call-back logged.
- Payoff plan clear; draft ALTAs balanced.
6. Post-closing
- Final ALTAs for every leg SLA touched.
- Confirm recording: the A→B deed if applicable, the B→C deed, and SLA's security instrument.
- Track the releases: Party A's liens, and the transactional loan's release if stacked.
- Loan policy (or policies) to the file.
7. Exceptions
Manager / UW lead approval is required for: multi-day holds, split title, unresolved monetary liens, anti-flip / seasoning issues, wire changes, PSA / vesting mismatches, or title that will not CPL SLA or support a sequential close. Document every exception in the file.
Open in this draft: align the entity names, the wire thresholds, and the standard RTL checklist cross-reference with current SLA credit policy.