Where and how should I disclose the Florida policy surcharge (currently $3.28) on the Closing Disclo

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.

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