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#2063104 - 02/08/16 07:49 PM
Another, disclosing OTPP correctly question.?.
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Platinum Poster
Joined: Nov 2001
Posts: 713
Laramie, WY. USA
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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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#2063145 - 02/08/16 08:58 PM
Re: Another, disclosing OTPP correctly question.?.
Wyogirl
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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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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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#2064840 - 02/18/16 06:33 PM
Re: Another, disclosing OTPP correctly question.?.
Wyogirl
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Platinum Poster
Joined: Nov 2001
Posts: 713
Laramie, WY. USA
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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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Joined: Nov 2004
Posts: 2,310
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#2064913 - 02/18/16 09:15 PM
Re: Another, disclosing OTPP correctly question.?.
Wyogirl
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Joined: Oct 2000
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Cape Cod
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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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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#2065041 - 02/19/16 05:25 PM
Re: Another, disclosing OTPP correctly question.?.
Wyogirl
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Platinum Poster
Joined: Nov 2001
Posts: 713
Laramie, WY. USA
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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
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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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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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#2065101 - 02/19/16 07:51 PM
Re: Another, disclosing OTPP correctly question.?.
Wyogirl
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Cape Cod
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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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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#2065176 - 02/20/16 02:42 PM
Re: Another, disclosing OTPP correctly question.?.
Wyogirl
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10K Club
Joined: Jul 2001
Posts: 84,332
Galveston, TX
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Have you talked to the Department of Insurance in your state??
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2087307 - 07/08/16 09:42 PM
Re: Another, disclosing OTPP correctly question.?.
Wyogirl
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100 Club
Joined: Jun 2014
Posts: 126
WA
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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
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10K Club
Joined: Jul 2001
Posts: 84,332
Galveston, TX
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What is the LTI cost if the owner doesn't buy a policy??
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2087316 - 07/08/16 10:38 PM
Re: Another, disclosing OTPP correctly question.?.
Wyogirl
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Joined: Jun 2014
Posts: 126
WA
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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
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10K Club
Joined: Jul 2001
Posts: 84,332
Galveston, TX
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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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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2087510 - 07/12/16 01:56 PM
Re: Another, disclosing OTPP correctly question.?.
Wyogirl
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Posts: 40,086
Cape Cod
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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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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#2087556 - 07/12/16 03:39 PM
Re: Another, disclosing OTPP correctly question.?.
Wyogirl
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Member
Joined: Oct 2009
Posts: 69
KY
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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
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100 Club
Joined: Jun 2014
Posts: 126
WA
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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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