CFPB & Title Disclosure Updates

SunTrust Notice on CFPB procedures, the title premium disclosure discrepancies form and restrained enforcement

Dear Fund Member:

This week’s email covers three timely topics. No interesting golf or other sports stories this week; I am not a NHL or NBA fan so I am left with rooting for my Gator baseball team from afar and hoping that Billy Donovan stays.

SunTrust Notice re: CFPB procedures:

Hot off the press is a recent letter from SunTrust communicating more information about the process they anticipate implementing for the new IMD/CFPB rules. A copy of it is posted on our Readiness webpage: https://www.thefund.com/TheFund/media/PDFs/SunTrustMortgageInc_RESPATILA-2015-4.pdf.

Quotes from the notice with important phrases that I highlighted:

• "We expect that our settlement service providers will be ready, willing and able to provide complete and accurate title and settlement charges up to two (2) weeks prior to the scheduled closing date."
• "A signed copy of the Sellers Closing Disclosure will be required as a condition to receive loan funding approval."
• "All SunTrust settlement service providers should expect to receive an attestation form prior to closing a loan impacted by the new rules confirming their ability to comply with the rules and the expectations set forth above."
• "In order to remain eligible to close loans for SunTrust, all settlement service providers are required to complete an ALTA Best Practice’s Self-Assessment no later than July 1, 2015."

None of this is surprising to me. The completion of the ALTA Self-Assessment needs your particular attention and “sooner rather than later” would seem advisable.

“Additional” form to deal with title premium disclosure discrepancies:

I spent all of Monday, April 20 traveling to and from Tallahassee to participate in a workshop on the proposed form to reconcile the disclosure of title premiums as required under the new CFPB rules and Florida law. The form that is under consideration is not particularly confusing, but is another aspect of the new rules that you will need to understand and implement as a standard part of your closing documentation. There are two basic parts to the proposed form:

• A comparison of the title premiums as disclosed by the lender under the CFPB rules and the title premiums as called for under Florida law. This addresses the whole issue of the cost of the lender’s title policy - whether full premium based on the loan amount or the simultaneous issue rate.
• Signature blocks for the buyer, seller and settlement agent containing approval of costs and authorizing disbursement AND a representation by the title agent that the funds will be disbursed in accordance with the settlement statement.

When the final version is publicized by the Department of Financial Services for adoption, I will be sure to alert you. If you want any more information about this, please contact me and I will be happy to respond.

Restrained Enforcement:

ALTA continues to work very hard for the industry in the effort to convince CFPB to adopt a period of “restrained enforcement” after August 1, 2015. This is a very important effort and one that will likely need your assistance by asking you to contact your representatives in Washington, D.C.. CFPB representatives are quick to remind us that the rules have been “on the books” since November 2013 and this has given the lenders and title industry plenty of time to get ready. However, the true measure of the benefit to the consumer of these new rules will be how they apply in real life situations. Many have said that this is the biggest regulatory change in 20 years. I don’t disagree. A period of restrained enforcement will give the industry the ability to focus on the primary objectives of the rules (consumer disclosure, education and protection) and then work with CFPB to resolve ambiguities and other issues of implementation.

Fund Assembly is just around the corner and I am really looking forward to seeing so many of you there and talking with you one on one. As always, thank you for being such an important part of providing consumers with professional, secure transactions every day. And, of course, for your loyal support of The Fund! Have a great week.

Best Regards,

Melissa Jay Murphy
Senior Vice President
and General Counsel