Fund News and Alerts

Lenders have the option of having the second loan disclosed on a separate document, or they can include it on the Closing Disclosure for the first mortgage. If shown on a separate document, it would not necessarily be on a Closing Disclosure. For example, because a HELOC is an "open-end" loan transaction, it could be disclosed using a HUD-1 type document or settlement statement. Only "closed-end" loan transactions are covered by the new rules and must use the Closing Disclosure unless they qualify for some other exemption.

If the lender wants to include everything on one Closing Disclosure, we believe the separate charges related to the second loan should be disclosed in "Section H. Other;" but the lender has the discretion to request itemization elsewhere.

12/15/2015

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.

12/15/2015

Unlike the HUD-1, the Closing Disclosure is created by the lender and the lender has ownership rights to it. For that reason, their approval is needed. In addition, since the Closing Disclosure contains far more Non-public Personal Information (NPI), caution should be exercised and borrower approval obtained before sharing it with others.

A better solution is to prepare a joint closing statement such as the ALTA statement or the custom settlement statements found in DoubleTime® and other closing software. The general sense is that these can be provided to real estate brokers without significant concern.

The TRID rules require that the settlement agent prepare and provide a Seller Closing Disclosure. There is no reason to give that to anyone other than the seller if you have prepared another joint closing statement but there is no NPI concern about the Seller Closing Disclosure.

12/15/2015

By: Connie Clark, Fund Sr. Underwriting Counsel

The party who customarily pays the owner’s title insurance policy premium in a residential transaction in Florida varies by county. In at least one county, who pays the premium depends on where the property is located within the county. For Fund Members writing or reviewing contracts for property located in a county where the Fund Member is not familiar with the local custom, this variability may create uncertainty.

12/04/2015

The Seller’s Closing Disclosure must be provided to the seller no later than the day of closing. You can provide it as early as you want, but there is no three-day rule like there is for the borrower’s form.

11/23/2015

Yes. The lender can require the borrower to use a lender-selected provider. (This is not new under TRID. It was also the case for the GFE/HUD, though it rarely occurred.)

The lender can choose the provider; the lender can give the borrower a list of at least two providers and restrict the borrower’s choice to that list; or the lender can give the provider a list of at least one provider and allow the borrower to choose from the list or find a provider on their own (“shop”). 

Even when the borrower chooses someone, the lender can still deny use of that provider when the provider is not on the lender’s internal approved list.  (E.g. settlement agent has no access to Closing Insight or other collaboration portal as required by the lender; has failed to meet the lender’s “Best Practices” requirements, etc.)

11/23/2015

Lenders are trying to gather information in order to deliver a Loan Estimate within three days after receipt of a loan application; many do not yet know how to gather the information they need so they are sticking with what they know and who they know - you and the good ole HUD-1 settlement statement! You should resist providing your information on that form because it will give the lender incorrect information about the title insurance premiums and you might get blamed.

Under appropriate circumstances (e.g. you have the contract and will be providing the settlement services), you should strive to provide your standard fees and title insurance premium information on a pro forma Closing Disclosure. This should not be difficult if you are in receipt of the contract and have opened and populated a DoubleTime^® file with basic information. (You need not go to any great effort to capture third-party information, but you should make lenders aware of any requirements you might anticipate.)

Lenders will need title insurance premium breakdowns using the new TRID formula; your settlement fee (don’t forget to include the miscellaneous charges that you may have itemized in the past); and your title search charges (including municipal lien search, if you need one). Include an entry for “Title - Survey” if required for a Form 9 endorsement even if you do not know who will do the work or how much they will charge; lenders will have to come up with that estimate on their own. If your contract includes an association disclosure, let the lender know the amount stated on the disclosure for regular assessments.

If you have not begun to create a file, you may decide to provide a rudimentary “fee sheet.” The goal is to provide enough information about your fees with the least amount of effort since you may not get the deal. Knowing the sales price and loan amount will allow you to provide the “TRID rates” for the policies and endorsements. If you will need a survey for a Form 9 endorsement, let the lender know that it will need to get an estimate since the survey will be required. Any more information than that will depend upon your knowledge of the transaction and your comfort level. Be prepared to be held to any estimates you provide so proceed with caution.

11/23/2015

The policies should reflect the correct premiums per Florida Law, not the distorted TRID rating shown on the Closing Disclosure.

11/23/2015

The surtax is not considered to be part of the premium and is not required to be disclosed on that form.

11/23/2015

Over the past several years, we have published several alerts and spoken at Assembly and other seminars about the Fake Check Scam. It is time to publish a reminder.

11/13/2015