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#2063104 - 02/08/16 07:49 PM Another, disclosing OTPP correctly question.?.
Wyogirl Offline
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Laramie, WY. USA
The regulation amply and specifically discusses how to disclose the simultaneous OTPP when there is a simultaneous issuance, but the reg says nothing about other discounts, like the usual 10% discount for a recent issue. Therefor, we subtract any discounts not related to simultaneous issuance, prior to adding the Simultaneous Issuance Lender's Title Policy Premium.

I'm trying to find out more information, but the initial question to me was, "can the OTPP be a negative number?" I think so. The discount was 50% (maybe a construction continuation?), so applying the discount to the Full OTPP, then adding the SILTPP, subtracting the Full Lender's TPP equals a negative number in this case. According to the rules, it's correct.

It's just weird.,,again. So can the OTP be a negative number?

Thank you,

Deb

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TRID - TILA/RESPA Integrated Disclosures Rule
#2063111 - 02/08/16 08:02 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
Wyogirl Offline
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I located an earlier discussion, so I'll defer to that, but I still need to know, are we applying the recent issue discount fee correctly?

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#2063116 - 02/08/16 08:09 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
Wyogirl Offline
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Never mind. smile

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#2063145 - 02/08/16 08:58 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
John Burnett Offline
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Wyogirl -- Did you give up on the question, or locate an answer. If the latter, would you be willing to share what you discovered?
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#2064840 - 02/18/16 06:33 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
Wyogirl Offline
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I discovered that yes, it can be negative just due to the formula itself, but that you cannot show a negative number. John, I referred to an earlier answer you gave, and the CFPB letter showing the other ways to show the discount - as a credit somewhere else, as opposed to in Section H. I'm actually looking for that thread again, right now.

I'm super frustrated now, because just when we think we got it figured out, the title companies in our area are now telling us, "we're not going to give you the figures you need because we're now bundling." I am banging my head right now trying to figure out how we now disclose according to 1026.37. I'm begging them, just tell me the full amount of the LTI and the OTI before discounts and endorsements, we'll figure it out from there. But they refuse - "this is how we do it now". Yeah, but you're not subject to the FDIC compliance team! AAARRRRRGGGGHHHHH!

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#2064874 - 02/18/16 07:54 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
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#2064913 - 02/18/16 09:15 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
John Burnett Offline
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Consider what effect you want that extra discount (recent issue discount, I think you called it) to have. It should result in the borrower paying less at closing, right? How about dropping it onto any of the Adjustments lines (08 - 11) in Section L? That should result in a negative amount carrying into the amount on the Adjustments and Other Credits line of the "normal" C C to C table.

If you're using a "no seller" form, would there be a credit for Title Insurance in some cases?
Last edited by John Burnett; 02/18/16 09:16 PM.
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#2065041 - 02/19/16 05:25 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
Wyogirl Offline
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Thanks John and RR. Yes, that is the article I was referring to - it seems to lay it out quite well and we were able to solve the original issue I posted here.

But, now I've got a new one - the bundling. We asked the Title Co why they will no longer give a non-simultaneous LTI premium and let us do the math. They say, "they did this to make it easy on lenders rather than have all this rate confusion. We have one rate for the lender policy regardless of whether the owner's policy is purchased or how long ago it was issued. The rest of our clients love this."

So, my question is, is the title company relieving how I'm supposed to disclose, really? I feel like we need to still make it confusing, like the reg says to do, (LOL) What do you guys think about bundling, can I really just insert the OTI figure they give me without doing any calculations now?

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#2065083 - 02/19/16 06:51 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
John Burnett Offline
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I think the key question is whether that "bundling" will result in overstatements or understatements on the Loan Estimate. OTI and LTI are two different products and one is usually mandatory and the other optional (even if most buyers obtain it in some jurisdictions). Can you provide us with some examples of "yesterday" and "today" pricing for the same coverage for the same purchase price and loan amount?

OLD METHOD
Full price, LTI
Full price, OTI
Discounted LTI price

NEW METHOD
Full price, LTI
Full price, OTI
Discounted LTI price
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#2065095 - 02/19/16 07:13 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
Wyogirl Offline
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Old:
OTPP + (SIPP Amount + Endors.) - (FLTPP + Es) = the OTI Premium we disclosed in Section H on the Closing Disclosure.
Example:
2383 + (500 + 100) - (2383 + 100) = 500

New:
Lender's Title Insurance - $1,100
Owner's Title Insurance - $1,905

That's all we get. We're just supposed to plug it in. In fact, they're telling my processors to plug it in on the LE. I've been training to not.

Now please refer back to the post above. They simply refuse to provide us anything else. They seem to be running the show, but we should be in charge. So, when one of my compliance officers wouldn't back down on the phone, with yet another title company, they finally gave us pre bundled figures so we could run the calculation in the reg. I haven't spoken to the other title co. in person yet.

Thoughts?

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#2065101 - 02/19/16 07:51 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
John Burnett Offline
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Question back to you, Wyogirl. What happens to those "bundled" prices if the borrower decides NOT to get OTI? Does the LTI stay at $1100?
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#2065152 - 02/19/16 10:46 PM Re: Another, disclosing OTPP correctly question.?. John Burnett
Wyogirl Offline
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LOL, I have no idea! In our neck of the woods, the seller pays and I've never seen an occasion where it was not purchased.

I called our EIC at the FDIC and they're discussing. No one there has encountered this yet. I might have an opinion by Wednesday, which I will share.

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#2065176 - 02/20/16 02:42 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
rlcarey Offline
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Have you talked to the Department of Insurance in your state??
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#2065284 - 02/22/16 05:27 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
Wyogirl Offline
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Randy, I'm pretty sure that's my next call. Thank you!

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#2087307 - 07/08/16 09:42 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
LostinRegLand Offline
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WA
Wyogirl did you ever get an answer to this question? We have our first title company tell us they are no longer giving discounted LTI. They say it is to make it easier on us. That we no longer need to run the calculation that it is no longer needed.

Quote just received from title company
OTI-$2,285
LTI-$557

Our Senior Loan Closer is currently on the phone with the title company trying to get an answer as why they have gone this way.

Sorry to be reviving an old thread and if this was answered in another one please someone point me in the right direction. I did a search and this was the only one I found on this issue.

Have a great weekend everyone

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#2087311 - 07/08/16 10:10 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
rlcarey Offline
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What is the LTI cost if the owner doesn't buy a policy??
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#2087316 - 07/08/16 10:38 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
LostinRegLand Offline
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That is what we are trying to determine.

So far we have been told that it is the policy of the title company on purchases to only issue a lender's policy with an owner's policy and so they will never only have a lender's policy on a purchase transaction. The title agent told our loan officer that this policy became effective July 1st. Craziest things I am learning from TRID.

We are in Washington State, the sellers pay for the Owner's policy.

We have not yet been able to contact the title company manager and of course I am going on Vacation in an hour so this will be fun to try and figure out and be gone.

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#2087318 - 07/09/16 12:35 AM Re: Another, disclosing OTPP correctly question.?. Wyogirl
rlcarey Offline
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You might need to engage competent legal counsel to make sure everything is on the up and up. Sounds like coercion to me.
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#2087406 - 07/11/16 04:25 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
Wyogirl Offline
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Hi. Yes, I talked to my compliance supervisor at both the FDIC and the Fed. The FDIC said something to the fact that this is vendor due diligence and we better control the title company. That was realistic for a small bank in a town with 2 companies. Thank you FDIC. The Fed however seems to live in the world I do. I told our guy we have no control over this, we literally beg for the correct amounts to insert into the stupid little formula. It can add hours to loan doc prep. So I told the Fed what we did and he was happy. Here's what we did:

Documented the issue and took it to our management level risk management committee, (ERM - meets monthly.) We documented to the problem in minutes and discussed possible solutions. We finally determined that we would act in the best interest of the customer, which is to disclose an actual amount to them - the figure the title co is giving us. Management voted and approved the sidestep. Then we took it to audit committee, explained the situation to them and they too decided to put our customers first. So, we have this risk based decision documented in both management and board meetings. We had to move on and quit wasting time. We have no control over anyone but ourselves.

The Fed agreed. Both agencies are researching this as they are starting to understand the issue we are facing. The title companies deciding to change their fee structure without the input of the CFPB. I don't think anyone thought of that possibility.

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#2087510 - 07/12/16 01:56 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
John Burnett Offline
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I don't disagree with your decision, Wyogirl. I do agree with the suggestion that the TI company's pricing/bundling decision smacks of coersion. Regardless of who pays for it, a buyer should never be forced into obtaining OTI (even if it's a good idea to get it).
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#2087528 - 07/12/16 02:29 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
Truffle Royale Offline

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Wyogirl, et al, are we talking title insurance on purchase loans only here? If so, then I think I understand where the title companies are coming from giving you flat fees. Owners title is the vehicle by which the seller shows they have clear title to sell. There is no other option in my state and it sounds like Wyogirl's is the same. Once the property is purchased and the buyers have the owners policy, which the seller paid for per the purchase agreement, they don't buy it again on a refinance. So I'm not sure how this is viewed as coercion...?

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#2087556 - 07/12/16 03:39 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
jedeca Offline
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Thanks
Last edited by jedeca; 07/12/16 05:04 PM.
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#2088658 - 07/18/16 09:12 PM Re: Another, disclosing OTPP correctly question.?. Wyogirl
LostinRegLand Offline
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WA
Thank you for letting us know your outcome Wyogirl. We are still trying to contact the higher up's at the title company. I have been on vacation but am now back and started back in on this today.

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