Lender Update

Bank of America and Wells Fargo recently issued updated communications to settlement agents. You should read them – for both the technical comments (if you close loans for either of them) and for an appreciation of the details addressed. There is a lot of information in both of these communications.

Here are the communication links:
Bank of America - TRID Rule & Meeting the Closing Date (.pdf)
Wells Fargo Settlement Agent Communication (.pdf)

Here is the Reader’s Digest version of the communications:

• Wells Fargo lists 4 “key reminders” for settlement agents and clearly states that failure to comply could “quickly impact” your eligibility to close future loans. Zing!

  • Use the Closing Disclosure prepared by Wells Fargo. Do NOT use your Closing Disclosure.
  • Loan documents are not to be signed earlier than the date authorized by Wells Fargo.
  • Communicate changes in the Closing Disclosure to Wells Fargo.
  • Prepare and provide a Seller Closing Disclosure on every purchase transaction. Provide a copy to Wells Fargo with the closed loan documents.

• Both Bank of America and Wells Fargo will continue to use Closing Insight and both are indicating an increased emphasis on requiring that settlement agents use this technology.

• Performance measurements (for delivery of title policy and recorded mortgage) are clearly important. Double Zing!

In the referenced communication, Bank of America indicates that settlement agents are not required to provide “certification” of adherence to ALTA Best Practices but “this could change in the future.” In the months before the implementation of TRID/KBYO, we spent significant amounts of time educating you about Best Practices and providing resources to help you prepare a Best Practices Manual for your office. You spent lots of time preparing your manuals. We also helped many of you deal with lender requests for personal and business information, proof of insurance, self-certification and a variety of other “lender vetting” requirements.

On and after October 3, 2015, much of the energy and focus of both the settlement and the lending industries has been on getting to closing. Now that we have 9 months under our belts and closings are getting done, it is my opinion that lenders may (note emphasis on the word “may”) soon turn their attention back on ensuring adequate due diligence is performed on all closing agents. To help you refocus on this issue and to provide direction and guidance, lender due diligence and Best Practices will be a topic at Real Estate Council meetings, Circuit Advisory Team meetings, in these emails and in future webinars. Stay tuned and pay attention. This has the potential to significantly affect your eligibility to close loans and you could be caught off-guard if you don’t take certain steps soon.

As always, thank you for your support of The Fund.

Best Regards,

Melissa Jay Murphy
Senior Vice President and
General Counsel