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#2138264 - 07/14/17 06:29 PM Negative Figures on Closing Disclosure
warrior Offline
New Poster

Registered: 07/14/17
Posts: 3
I have a question regarding disclosing Title Insurance on the CD for a construction loan where the borrowers already own the lot with no existing mortgage.

The Loan Estimate has the following:

Section C.
Title – Lender’s Title Insurance $1,980.00
Section H.
Title – Owner’s Title Insurance (optional) $1,980.00

Borrower did not shop for title insurance selecting a company listed on the shopping list. Borrowers had a current owner's policy from when they purchased the vacant lot but wished to increase their coverage for a nominal fee in comparison with overall cost of the home.

Invoice on Title company is the following:
Owner’s Policy: $1,326.00
Lender’s Simultaneous issue: $ 300.00
Total $1,626.00

So here is what I’m thinking of how I would disclose this on the CD:
Section C.
Title – Lender’s Title Insurance $1,980.00 (since this is still the full indexed rate, this doesn't change)
Section H. Other
Title – Owner’s Title Insurance (optional) $ -354.00

Do you feel it is ok for me to list Owner’s Title as a negative number? Or would I be better off doing something different? Or am I missing it completely and just list the fees as listed on the invoice?

Thank you in advance for your help.

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TRID - TILA/RESPA Integrated Disclosures Rule
#2138265 - 07/14/17 06:46 PM Re: Negative Figures on Closing Disclosure [Re: warrior]
rlcarey Offline
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Registered: 07/16/01
Posts: 64016
Loc: Galveston, TX
If you are in a simultaneous discount State how could this be correct?

Section C.
Title – Lender’s Title Insurance $1,980.00
Section H.
Title – Owner’s Title Insurance (optional) $1,980.00

But if the undiscounted LTI was $1,980, then your CD is correct.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2138299 - 07/17/17 09:21 AM Re: Negative Figures on Closing Disclosure [Re: warrior]
warrior Offline
New Poster

Registered: 07/14/17
Posts: 3
Thank you for the reply rlcarey.

Thank you confirming the Closing Disclosure. I wasn't sure you could have a negative fee.

Yes, we are in a simultaneous discount state. You are correct that maxing out the two Title Insurance Fees is not acting in the best of good faith. But, in the highly unlikely scenario where a person were to shop for Lender's Title from one company and Owner's from another, however financial absurd that would be, then there wouldn't a simultaneous issue. Correct? And if we list two Title companies on the shopping list and they happen to pick both from the list, then they didn't shop and I would need both fees maxed out. Highly unlikely, but possible. True?

Or do you have another suggestion going forward? Such as following calculation example in the reg for simultaneous discounts and owner's policies (optional).

Thank you.

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#2138301 - 07/17/17 09:25 AM Re: Negative Figures on Closing Disclosure [Re: warrior]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 64016
Loc: Galveston, TX
Unlikely? Closer to unheard of. You are not disclosing in good faith and should be using the formula in the regulation.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2138308 - 07/17/17 09:34 AM Re: Negative Figures on Closing Disclosure [Re: warrior]
warrior Offline
New Poster

Registered: 07/14/17
Posts: 3
Great. Thank you for the quick reply. I will change my methods going forward. Have a good day.

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#2138318 - 07/17/17 09:52 AM Re: Negative Figures on Closing Disclosure [Re: warrior]
John Burnett Offline

10K Club

Registered: 10/27/00
Posts: 36288
Loc: Cape Cod
The regulation has to be followed unless simultaneous issue discounted LTI is not available.
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John S Burnett
BankersOnline.com
Professional Compliance Nerd since 1976.

"Illegitimi non carborundum"

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