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#1403656 - 06/15/10 02:19 PM HUD Page 3: Comparison Table
jme3 Offline
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Illinois
We have a RESPA covered construction loan. We are closing the loan. A title company not on our provider list is doing the insurance, and a title company that is on our provider list is doing the construction disbursements. On our GFE all of these fees are combined in box 4, therefore on page 3 of the HUD for the comparison categories, how should these fees be listed since they are lumped together on the GFE?

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#1403663 - 06/15/10 02:28 PM Re: HUD Page 3: Comparison Table jme3
LauraGipe Offline
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It depends. Who is conducting the closing? If it is a separate party from the one issuing the Lender's title insurance policy AND it was separated on the "written list", the settlement or closing fee may be separated from the charge for "title services and Lender's title insurance". Only the settlement or closing fee may be separated (subject to above. All other services in "title services" must remain combined in the Comparision Chart.
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Laura T. Gipe
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#1403674 - 06/15/10 02:35 PM Re: HUD Page 3: Comparison Table LauraGipe
jme3 Offline
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Illinois
So you are saying that combined fees (not the closing fee) in Box 4 on the GFE where they are paid to two different third parties, one who is on the provider list and one who is not should be combined in the comparison charts? What category should they go in then? Since one is subject to the 10% does that make the entire 1100 section subject to 10%?

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#1403713 - 06/15/10 03:11 PM Re: HUD Page 3: Comparison Table jme3
LauraGipe Offline
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Yes, the combined charge of the Lender's policy and the escrow (if other than the closing) must remain together in the Comparision Chart. If the party issuing the Lender's policy is one of the providers on the written list, it is subject to the 10% aggregate tolerance category.
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Laura T. Gipe
RESPA Compliance Specialist

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#1403722 - 06/15/10 03:20 PM Re: HUD Page 3: Comparison Table LauraGipe
jme3 Offline
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Illinois
Per our first post, ex:

Us, the bank is closing the loan, there is not a closing/settlement fee or charges in Box 4 of the GFE or 1100 section paid to us

Title Company A - Providing Title Insurance, no on our provider list and not subject to 10%
Title Company B - Providing our Construction Disbursement Fee, on our provider list and subject to the 10% tolerance

On the GFE Title Company A and Title Company B's fees are combined to one total for title services and lender's title insurance.

On the HUD for the comparison charts is it okay then to itemize/break apart Title Company A and Title Company B's charges so that they can be in the different comparison charts and breakdown the amount then from GFE Block 4 to have a comparison so that the 10% category would not have a blank for the construction disbursement fee in the GFE column and amount in the HUD column that would put the loan over the 10%

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#1403759 - 06/15/10 03:49 PM Re: HUD Page 3: Comparison Table jme3
Dan Persfull Offline
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Bloomington, IN
Quote:
Title Company A - Providing Title Insurance, no on our provider list and not subject to 10%
Title Company B - Providing our Construction Disbursement Fee, on our provider list and subject to the 10% tolerance


What title services, if any, are TC B providing?

If they are only providing disbursement services then I would be inclined to include these charges in Block 1 as they are performing origination services (loan handling charges) on behalf of the loan originator.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1403771 - 06/15/10 03:54 PM Re: HUD Page 3: Comparison Table Dan Persfull
jme3 Offline
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Illinois
We charge a construction disbursement fee charged to us(the bank) which we include in our origination services. Title company B is also charging a construction disbursement fee and will provide the disbursement service. When the loan goes permanent it will be financed into our secondary mortgage department and our (the bank's) construction disbursement fee will be refunded to the borrower. Title company B is an affiliate of ours and through our research and their's had determined that their construction disbursement fees would be itemized in the 1100 section and included in the title services and lender's title insurance section.

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#1403789 - 06/15/10 04:08 PM Re: HUD Page 3: Comparison Table jme3
Dan Persfull Offline
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Bloomington, IN
What documentation found in your research lead to that conclusion?

From 3500.2:

Title service means any service involved in the provision of title insurance (lender's or owner's policy), including but not limited to: title examination and evaluation; preparation and issuance of title commitment; clearance of underwriting objections; preparation and issuance of a title insurance policy or policies; and the processing and administrative services required to perform these functions. The term also includes the service of conducting a settlement.

If all they are doing is disbursing funds under terms of the construction agreement on behalf of the loan originator then I don't see any title services being performed by TC B.

Simply because they are a title company does not mean all the services they may offer are title insurance related.

I haven't researched this, but based on your description of their services and the definition of title services I don't see their charges being disclosed in Block 4 and Line 1101.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#1403854 - 06/15/10 04:58 PM Re: HUD Page 3: Comparison Table Dan Persfull
LauraGipe Offline
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All title service remain in Block 4. They are never a part of Block 1.

From our FAQs:
Written List of Providers For Block 4, the loan originator may separate the services in the Written List of Providers to show providers that conduct settlements (or closings) separately from providers of lender‘s title insurance and the related services If Block 4 services are separated on the Written List of Providers, the associated estimated fee for the component service must be listed next to the header for the list of providers of that service The sum of the estimated fees for the two services must equal the amount in Block 4 Only two (2) categories of service providers may be listed: providers that conduct settlements (or closings) and providers of lender‘s title insurance and the related services HUD-1 page 3, HUD-1A page 2 If the consumer chooses neither service provider from the list:
o The lump sum of Block 4 would be placed in ―Charges that Can Change‖
 Both service providers should be listed in the blank for service provider names, for example: XYZ Settlement Services/ABC Title Agency If the consumer chooses a provider of one of the services from the list:
o The service provider that was chosen from the Written List would be included in ―Charges That in Total Cannot Increase More than 10%‖ with the associated estimated fee from the Written List of Providers in the GFE column and the actual fees for that service from that provider in the HUD-1 column. The service performed by the provider not chosen from the Written List of Providers would be listed in the ―Charges that can Change Section‖ with the associated estimated and actual fees.
o The total of the estimated fees in the GFE column (from both tolerance sections) must equal the amount in Block 4 of the GFE
o The total of the actual fees in the HUD-1 column (from both tolerance sections) must equal the total of all ―Title services and lender‘s title insurance‖ actual charges If the consumer chooses the providers of both services from the Written List:
o The Block 4 total is listed in the ―Charges That in Total Cannot Increase More than 10%‖ column.
 Both service providers should be listed in the blank for service provider names, for example: XYZ Settlement Services/ABC Title Agency
 The total estimated and actual fees for both providers would be listed in the respective GFE and HUD-1 columns.

Laura Gipe
Compliance Specialist
RESPA
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Laura T. Gipe
RESPA Compliance Specialist

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#1403872 - 06/15/10 05:08 PM Re: HUD Page 3: Comparison Table LauraGipe
Truffle Royale Offline

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But you agree that the lender's charge FOR THE SAME SERVICE goes in Block 1, Laura? How is it possible that fees for identical services would go in two different blocks?

Beyond that, the section Dan quoted from the FAQ specifically states: Title service means any service involved in the provision of title insurance (lender's or owner's policy),...The term also includes the service of conducting a settlement.

The fee being discussed is neither a fee associated with title insurance nor a fee for conducting a settlement so how can it possibly belong in this box?

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#1403933 - 06/15/10 06:14 PM Re: HUD Page 3: Comparison Table Truffle Royale
RR Joker Offline
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I agree. Handling construction draw disbursements has nothing whatsoever to do with anything belonging to the definition of settlement or title services.

It's a service, yes...apparently they must be handling the disbursements out of an escrow account they control, rather than the lender handling the disbursements. Not something I'd want to do, but then...that's me!
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#1404309 - 06/16/10 02:43 PM Re: HUD Page 3: Comparison Table Truffle Royale
jme3 Offline
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Joined: Jul 2008
Posts: 67
Illinois
Originally Posted By: Truffle Royale


The fee being discussed is neither a fee associated with title insurance nor a fee for conducting a settlement so how can it possibly belong in this box?


On a similar note, we have a State Policy Tax Fee (Illinois) that is payable to the title company used who them will pay it to the state. All the title companies we have used have also listed this fee in Box 4 on the GFE and the 1100 series on the HUD and included it in 1101. Based on the information provided by the posters, since it is not a fee associate with conducting the settlement or title insurance it should not go into this box? If so, what box should this go into?

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#1404315 - 06/16/10 02:49 PM Re: HUD Page 3: Comparison Table jme3
Truffle Royale Offline

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It sounds like this fee isn't paid to the title company. It's paid THROUGH the title company in the same manner the loan payoff is paid THROUGH the title company. What is this fee for? Is it a transfer tax type of fee? If so, I'd say Block 8.

Have any of the title companies you've used explained why they're putting it in Block 4? I'm curious as to why title companies are preparing your GFEs too.

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#1404318 - 06/16/10 02:53 PM Re: HUD Page 3: Comparison Table Truffle Royale
RR Joker Offline
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"State Policy Tax Fee" Is this a fee only on purchases? If so, it looks like a transfer tax.

Is it on all loans? May go in either 3 or 7 if it's anything lilke the final "rule" for a fee we have in GA called the Georgia Residential Mortgage Fee".

We started out with it in transfer tax, but HUD changed their mind not too long ago. Imagine that.
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My opinion only. Not legal advice.

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#1404321 - 06/16/10 02:54 PM Re: HUD Page 3: Comparison Table Truffle Royale
jme3 Offline
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Illinois
Sorry, I miswrote about about the GFE, we prepare our own. When all the changes started we were trying to figure out where the fee goes, its a $3.00 registration type fee paid to our state. Our affiliated title co and others we spoke to in the state said they were required to put it in to the 1100 since it was payable to them and lumped it into the total.

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#1404327 - 06/16/10 02:56 PM Re: HUD Page 3: Comparison Table jme3
RR Joker Offline
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It doesn't belong in the 1100's. The ultimate receiver is your State. It should be disclosed in that manner as well.

It sounds much like our GRMA fee which originally went in 8 and now goes in 3 or 7, your choice. We put it in 3.
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#1404353 - 06/16/10 03:09 PM Re: HUD Page 3: Comparison Table RR Joker
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Like I said, it's paid THROUGH the title company not TO them. Only fees payable to the title company, meaning the money goes no further than them, go in Block 4.

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