In one sentence
Written instructions from the lender to the closing or title agent specifying exactly how the closing must be conducted and funds disbursed.
The longer version
The instruction letter tells the closing agent what conditions must be met before recording and disbursement, how to disburse, and what to return. It converts the lender's requirements into operational steps for the agent.
Because it governs the moment funds move, the instruction letter is precise and closely followed, and its conditions map directly to closing checklist lines.
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