Fund News and Alerts

• On Page 2 of the CD, access the "Title Premium Allocation" calculator on the secondary toolbar.
• On the Loan Policy or Owner Policy tab, you can change the Payor field to Borrower, Seller or Other. You may also choose to split the charge between the Borrower and Seller using the “Split B/S” option or you can split between three parties by selecting “Split”.
• Click “OK” to close the calculator and have the changes reflected on the CD.

• When working with multiple loans, it will be required to check the “Separate Statement” checkbox in the Closing File module, Loan tab for DoubleTime’s Balance Sheet to remain in balance. The 2nd loan’s settlement statement should be accessed first and all figures entered in. Take note of the amount on line 303 that is shown under the Totals Summary tab.
• Select the Open button on the secondary toolbar and switch to the primary loan’s CD settlement statement.
• On Page 3 Summaries of Transactions, select an available row in Section L and enter in an appropriate description and type the proceeds amount from the 2nd loan. Do not set a payor for this line. DoubleTime will automatically handle the 2nd loan payor on the Balance Sheet.
• Check the Balance Sheet to verify you are in balance.

NOTE: If the proceeds amount is changed on the 2nd loan’s settlement statement, you will need to manually update the amount in Section L of the CD to remain in balance.

FIRPTA CHANGES – How much are you really making on your U.S. real property investments?

By: Sarah Gulati, Esq.

Prior to the PATH Act of 2015 (“Protecting Americans from Tax Hikes 2015”, effective 12/18/2015), if the seller of real property is a foreign person, Federal law required buyers to withhold 10% of the gross sale price and provide it to the IRS. With the implementation of the PATH Act, this 10% tax requirement has been altered. Effective February 16, 2016, the 10% withholding tax will be increased to 15%. Meaning, if you are a foreign person selling U.S. real property, 15% of the gross sales price of that property will go to the IRS in the form of a tax.

By: René Rutan, Real Estate Council Relations Manager, Florida ARECs

Title insurance is a mystery to most consumers and it really shouldn’t be. Confusion can often occur because lenders require title insurance to be purchased in order to obtain a mortgage, but it is not offered through your normal insurance agent where you purchase your homeowner’s or automobile policy. Instead, title insurance is typically issued by the party who conducts your real estate closing and is often lost in the shuffle of other concerns about obtaining the loan, finishing property inspections, and getting ready for your move. Title insurance is one of the most important things you can purchase to protect one of your largest investments and deserves a little more attention!

Title Insurance Through Lawyers (TITL) is your voice in the political arena of Tallahassee, and this election season all 160 legislative seats between the Florida Senate and the Florida House of Representatives will be on the ballot! This typically only happens once every 10 years, so now is the perfect opportunity for TITL to make a difference by educating and building strong relationships with Florida’s legislators, and we can’t do it without you!

Private lenders are exempt if the private lender does not meet the definition of “creditor” under 12 CFR § 1026.2(a)(17). Generally speaking that depends upon whether the private lender “regularly extends consumer credit” (See, 12 CFR § 1026.2(a)(17)(i)and(v)).

A person “regularly extends consumer credit” if they extended credit more than 25 times (or more than 5 times for transactions secured by a dwelling) in the preceding calendar year* or if, in any 12-month period, they originate more than one “high-cost” HOEPA loan that falls under the provisions of 12 CFR § 1026.32, or one or more such credit extensions through a mortgage broker.

*If the numerical standards are not met in the preceding year, they apply to the current year.

CAVEAT: It should be noted that even private lenders who do not meet the definition of “creditor” are subject to the Loan Originator Compensation Rule, which does not require a Closing Disclosure, but has its own set of prohibitions and requirements. (Seller financers who finance no more than one or no more than three properties in any 12-month period may qualify for exclusion from this rule depending on the specifics of the transaction.) (See, 12 CFR § 1026.36)

TRID requires settlement agents to provide “the disclosures in 12 CFR § 1026.38 that relate to the seller’s transaction reflecting the actual terms of the seller’s transaction” (12 CFR § 1026.19(f)(4)(i)). “The settlement agent complies…by providing a copy of the Closing Disclosure provided to the consumer, if it also contains the information under § 1026.38 relating to the seller's transaction, or alternatively providing the disclosures under § 1026.38(t)(5)(v) or (vi), as applicable.” (Comment 19(f)(4)(i)-1.)

Providing a HUD-1, ALTA Settlement Statement, or some other “easy” form does not satisfy these TRID requirements. The easiest way to comply is to complete and provide promulgated Form H-25(I) Mortgage Loan Transaction Closing Disclosure - Modification to Closing Disclosure for Disclosure Provided to Seller - Model Form. In the alternative, you have two other options pursuant to the rules outlined above. With the lender’s permission, you can provide the seller with the same form provided to the borrower as long as it includes all the seller information including the specific charges for services and products for which the seller is responsible. Or you can provide a modified or redacted version of the same form after removing all information related to the borrower and lender by following the guidance provided by § 1026.38(t)(v).

The premiums for owner policies, loan policies, and endorsements, continue to be calculated using Florida’s promulgated rate structure. (This includes use of the discounted rates for simultaneous issue, substitution loan, new home purchase and reissue.) The display of premium on the Closing Disclosure in a purchase transaction are effected by making a calculation for a stand-alone loan policy, including endorsements, and a separate calculation of the cost of the purchase of both policies including endorsements. The difference between the two sums is the “incremental increase” attributed to the purchase of both policies.

The cost of a loan policy, and its endorsements, is disclosed on the Closing Disclosure as if there were no owner policy to be given (i.e. stand-alone loan policy). The reason TRID uses this method is based upon the premise that a borrower needs to know the cost of the policy required by a lender should the borrower choose not to purchase an owner’s policy. (This ignores a common scenario where the purchase of the owner’s policy is, by contract, being paid for by someone else, usually the seller.) The cost for the purchase of an owner’s policy is disclosed as the incremental increase attributed to the purchase of an owner’s policy when both policies are purchased.

The official commentary to the rule explains these procedures at http://www.consumerfinance.gov/eregulations/1026-Subpart-E-Interp/2015-18239#1026-38-g-4-Interp-1 and at http://www.consumerfinance.gov/eregulations/1026-Subpart-E-Interp/2015-18239#1026-37-g-4-Interp-2

The regulations related to TRID are codified in 12 CFR Part 1026 - Truth in Lending (Regulation Z). The CFPB has a link at http://www.consumerfinance.gov/eregulations/1026-1/2015-18239#1026-1 Another site which many have found useful is https://www.bankersonline.com/regulations/12-1026-000.

The surcharge should continue to be made payable to Old Republic National Title Insurance Company and mailed to The Fund at this address: