MN Association of Realtors has redrafted the Purchase Agreement in respose to RESPA's requirement to bundle title fees on the GFE. Their FAQ further assigns all the costs to the borrower unless the Seller gives a consession.

The purchase agreement section line 111-116 reads as follows:
TITLE AND EXAMINATION: As quickly as reasonably possible after Final Acceptance of this Purchase Agreement:
(a) Seller shall surrender any abstract of title and a copy of any owner's title insurance policy for the property, if in Seller's possession or control to Buyer or Buyer's designated title service provider: and
(b) Buyer shall obtain the title services deterjmined necessary or desirable by Byer or Byer's lender, including but not limited to title searches....

Don't see where that says the costs are now the borrowers' but that's what the MN FAQ says and how the costs are now being shown.

Somehow I don't think this is what HUD intended to happen. Just sayin'.

Anybody have any insite or similar horror stories or is MN the first to do this?

That is crazy. I think they get that it is the buyer's cost by subsection b which states that the buyer shall obtain title servcies....including..title searches.

We have seen title companies come out with their own advice on how Lenders should complete the GFE, but that is about it.

"Their FAQ further assigns all the costs to the borrower unless the Seller gives a consession."

I guess I am confused??? Isn't this always the case unless State law says the seller must pay or there otherwise is an agreement on the costs in the earnest money contract?

Actually, this interpretation came from HUD themselves. MN Department of Commerce spoke with HUD and put out an FAQ. Here is #1:

Q: Can I charge the "seller's" portion of the search and examination fee on line 1101 in the seller's column?

A: When asked, HUD's response states that the search and examination fees are considered "Title Services" and "must remain in Block 4 of the GFE and in Line 1101 of the HUD-1 in the borrower's column". Therefore, any portion of the search and examination fees which are attributable to the seller must be given as a credit from the seller to the buyer on the front page of the HUD-1.

I certainly don't agree with it, but I don't agree with a lot of what HUD says...

Common and customary for the seller to pay the owners title policy and the borrower to pay the lenders in MN too, Randy. At least it was until this new Purchase Agreement came out.

MN Banker, unless I'm reading that wrong, the FAQ you posted appears to be a rewrite of the same one we use in every other state too. All it says is that the title charge cannot be broken out for the seller on line 1101 of the HUD like it was pre-1/1/10 RESPA changes. In order to make the GFE and HUD-1 match, you must show all the title charges to the borrower on page 2 of the HUD and then give a seller credit on page 1.

I don't see how having to bundle the fees on the GFE led MAR to redo the purchase agreement to "...shift to the buyer the obligation to pay certain title service fees previously paid by the seller." I guess I'm questioning whether this is as far-fetched as it seems to me or not.

I'm also asking if anyone else has seen this type of reaction to RESPA in their state. This is flat out costing the borrower more unless their realtor is watching out for them enough to write the title cost concession into the contract.

"This is flat out costing the borrower more unless their realtor is watching out for them enough to write the title cost concession into the contract."

That is if they are using their own realtor as a buyer's agent. Unless specifically contracted for, any realtor only represents the seller, which is basically a total misunderstanding by the typical purchaser.

I understand what you're saying, Randy. But the fact is, before September, 2010, the owners policy was routinely paid by the seller in MN. The new purchase agreement has added a couple hundred dollars to the purchase of a home in MN.

My concerns stem from the realtors changing a form based on what appears to me to be an invalid interpretation of RESPA.
HUD never said the buyer has to pay all the title costs.
Showing them all on the buyer's side of the GFE was part of the Worst Case Scenario aspect of the new vs the good faith estimate of the old.

Honestly, I'd love to hear what HUD would say to this...but only if they'd say it in plain English and not more twisty legaleese.

I doubt that HUD will care. The cost is the cost regardless of who has to pay. Remember, these changes in RESPA were not to benefit the consumers, but to punish the lenders.

I do agree and I also think it was a poor reaction, most likely based on poor understanding, as has been all along in the real estate world over the last ten years.

You don't think that these real estate people are going to visit the Wizard of Oz and simultaneously get a brain and a heart, do you now?

Thanks for the , Randy.
I spend so much time just shaking my head in disbelief these days.
Honestly, and we wonder why the world is in the shape it's in.