====== Residential Closing with Tokenization Fork ====== //Process owner: [[legal-engineers:kyler-wandler|Kyler Wandler]]//\\ //Type: Business Process (BPMN 2.0)//\\ //Jurisdiction: [STATE] (escrow-state assumption)// This process models a residential real estate closing in [STATE] with explicit branching for the funding type. The traditional financing path and the crypto-funded path are modeled as one process rather than two, because the title work, RESPA timing, and recording steps are common to both — only the funding leg diverges. ===== Description ===== The process starts when the purchase agreement is fully signed. Two parallel tracks then run concurrently: title work, and funding. Both must complete before the RESPA-mandated waiting period begins. ==== Title work (top branch) ==== - **Title search ordered** — title company runs the chain. - **Title insurance bound** — owner's policy and (if traditional financing) lender's policy. ==== Funding (bottom branch) ==== The funding branch contains an exclusive gateway on funding type: * **Traditional financing path** — loan application → underwriting → clear-to-close. Standard residential mortgage workflow. * **Crypto-funded path** — wrapper entity formation (LLC by default in [STATE]; series LLC where supported) → OFAC/BSA compliance check → crypto held in escrow (qualified custodian) → conversion or direct settlement at closing. The two sub-paths converge at "funds verified" before joining the title branch. ==== Common steps (after join) ==== - **RESPA waiting period (timer event)** — Closing Disclosure must be delivered at least 3 business days before consummation under TRID. Modeled here as an intermediate timer event. - **Deliver Closing Disclosure** - **Closing executed** — signing. - **Deed recorded** — recording with the [STATE] county recorder. Recording timing depends on whether [STATE] is a race, notice, or race-notice jurisdiction. ===== Decision logic ===== The funding-type decision routes based on a single input — declared funding source on the purchase agreement — but downstream compliance requirements differ substantially: ^ Funding type ^ Wrapper entity required ^ OFAC/BSA check ^ Custodian required ^ | Traditional cash/mortgage | No | No (handled by lender) | No | | Crypto, direct | Recommended | Yes | Yes | | Crypto, via tokenized SPV | Yes | Yes | Yes | | Hybrid (partial crypto) | Case-by-case | Yes | Yes | ===== Inputs ===== * Fully executed purchase agreement * Buyer KYC documentation * Source of funds documentation (heightened scrutiny on crypto branches) * Property legal description ===== Outputs ===== * Recorded deed * Title insurance policies issued * Compliance file (retained per BSA recordkeeping requirements on crypto branches) ===== Open questions for review ===== * Does the 3-business-day TRID window apply identically when settlement is crypto-funded? Edge cases around "consummation" timing have not been definitively addressed by CFPB guidance. * Is "wrapper entity formation" the right level of abstraction, or should this expand into a sub-process showing the entity-selection decision (LLC vs series LLC vs trust vs DAO-LLC)? * Should OFAC/BSA check sit before or after wrapper formation? Compliance practice varies. * Recording-before-funding vs funding-before-recording — modeled here as funding-before-recording per [STATE] assumption. May not match local practice. ===== Related ===== * [[processes:legislative-intake|Legislative Intake]] — upstream source of changes to tokenization rules that affect this process * [[decisions:paralegal-upl-scope|Paralegal UPL Scope]] — defines what scope a paralegal can perform in this process without attorney sign-off ---- ===== Diagram ===== Flow_Start Flow_Start Flow_ToTitle Flow_ToFunding Flow_ToTitle Flow_TitleA Flow_TitleA Flow_TitleB Flow_ToFunding Flow_Traditional Flow_Crypto Flow_Traditional Flow_TradOut Flow_Crypto Flow_Crypto2 Flow_Crypto2 Flow_Crypto3 Flow_Crypto3 Flow_CryptoOut Flow_TradOut Flow_CryptoOut Flow_FundsVerified Flow_FundsVerified Flow_FundsOut Flow_TitleB Flow_FundsOut Flow_ToTimer Flow_ToTimer Flow_PostTimer Flow_PostTimer Flow_ToClose Flow_ToClose Flow_ToRecord Flow_ToRecord Flow_ToEnd Flow_ToEnd