Common TRID Questions and MORE!

Dear Members,

Confusion resulted from last week’s email about the policy surcharge and how to disclose it properly on the Closing Disclosure. I have included the FAQ’s below with an updated (and clearer) response.

Dear Members,

Confusion resulted from last week’s email about the policy surcharge and how to disclose it properly on the Closing Disclosure. I have included the FAQ below with an updated (and clearer) response.

WHERE AND HOW SHOULD I DISCLOSE THE FLORIDA POLICY SURCHARGE (CURRENTLY $3.28) ON THE CLOSING DISCLOSURE?

The policy surcharge required by Sec. 627.7865, F.S. is described in Sec. 631.401(2), F.S. as a "governmental assessment." As such it should be disclosed in "Section E. Taxes and Other Government Fees." There is no hard and fast rule as to how it should be described on the Closing Disclosure, but it must include the reference "State of Florida" as the payee following the word "to" on that line. HOWEVER, THIS DOES NOT CHANGE THE REQUIREMENT THAT THE SURCHARGE BE DISBURSED TO THE UNDERWRITER AS YOU HAVE ALWAYS DONE.

It may help to think of the Closing Disclosure as a DISCLOSURE document, not a DISBURSEMENT document. The surcharge is being disclosed as a governmental assessment. But it is disbursed to the underwriter, who then pays the surcharges it has collected to the State. Since the surcharge is not a component of title insurance, it should never be preceded by "Title - ."

NOTE: Lenders may have a different interpretation. Lender instructions should normally be followed since they are responsible for the content of the Closing Disclosure. We believe that if the lender asks for your assistance or advice, separately itemized in Section E would be the preferred placement.

SIGNATURES ON THE CLOSING DISCLOSURE AND RELATED QUESTIONS

The Closing Disclosure (Borrower or Seller) is not required to be signed under the TRID rule, but lenders have the option to require a “Confirm Receipt” signature on the borrower’s Closing Disclosure. As the title suggests, it does nothing more than provide evidence to the lender that the borrower did in fact receive the form.

If the lender requires a signature page for the Closing Disclosure, they will either provide one or ask the settlement agent to prepare one. For those of you using DoubleTime®, “Closing Disclosure Addendum B – Customary Recitals” is the signature page automatically added to the Documents module to satisfy the need for a signature page. (Members may recognize it as it is very similar to the signature page DoubleTime® creates for a HUD-1 transaction.)

You can also use the “Closing Disclosure Addendum B – Customary Recitals” for the Seller Closing Disclosure if a signed Seller Closing Disclosure is requested or desired.

You have the option to use an ALTA settlement statement in addition to the Closing Disclosure. Some feel this form is easier to use to explain the transaction, and it concludes with signature certifications for the parties and the settlement agent.

In Florida, title agents must comply with a new rule which is incorporated into the Florida Insurance Premium Disclosure form. Use of the form itself is not required if you otherwise comply with the rule, but if you use the form, you are deemed to have complied. This form is automatically added to the Documents module in DoubleTime®. It contains the same signature certifications found on the ALTA settlement statements and Closing Disclosure Addendum B. Although there is an exemption in the Florida rule for attorneys not acting through a title agency, we believe that everyone should use the Florida Insurance Premium Disclosure form on those transactions where it is applicable. Note that the Florida rule requires that you send a copy of the form to the Lender.

OTHER NEWS:

1099 reporting is just around the corner. In order to be prepared to meet the deadlines, it would be a good idea to refresh your memory about the process and the rules. Here is the link to a very helpful video. And here is a link to some FAQ’s that will help.

Wells Fargo recently issued a very informative newsletter with an update to its TRID process. Whether or not you close loans for Wells, it makes for a good read. Here is a link.

The Mortgage Forgiveness Debt Relief Act (MFDRA) was extended for one year through the end of 2016. This allows homeowners who short-sell their home or receive principal reduction forgiveness to exclude the forgiven debt as income on their taxes. This continues to be an important motivator for consumers in some markets where short sales are still strong.

Florida’s population reached a milestone this year. For the first time, more than 20 million people live in the Sunshine State! We are now the third largest state (by population) behind only California and Texas. Some might say that is a dubious distinction. And some days I am confident that each of those 20 million people has a car and are on Semoran Drive when I am driving home! But I do know that this likely means continued vitality of the real estate industry – in some way, shape or form – and I hope that each one of you prospers from it.

That’s all for this week. Hope your holidays are wonderful. As always, thank you for your support of The Fund.

Best Regards,

Melissa Jay Murphy
Senior Vice President and
General Counsel