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#2223482 - 10/09/19 09:36 PM Section 32 Points and Fees Calculation
Jason Ellis Offline
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Posts: 28
If a borrower purchases Owner’s Title Insurance from the lender’s affiliated title company, does the premium count in the Section 32 Points and Fees calculation? I don’t think it does since it is an optional insurance but I would like other opinions. Thanks!

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#2223490 - 10/09/19 11:56 PM Re: Section 32 Points and Fees Calculation Jason Ellis
rlcarey Online
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rlcarey
Joined: Jul 2001
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Galveston, TX
If it is not required by the lender, then no.
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#2223499 - 10/10/19 02:07 PM Re: Section 32 Points and Fees Calculation rlcarey
Jason Ellis Offline
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Posts: 28
Thank you!

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#2223681 - 10/14/19 06:22 PM Re: Section 32 Points and Fees Calculation Jason Ellis
Jason Ellis Offline
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Posts: 28
I would like to revisit this issue. As I was writing up my guidance on whether the owner's title policy premium paid to an affiliate should be counted in the Section 32 points and fees calculation I became less sure of my answer. As I see it §1026.32(b)(1)(i) and §1026.32(b)(1)(iii) would be the applicable sections of Reg. Z to address this question. I think it is clear per 32(b)(1)(i) optional owner's title insurance would not be included as points and fees because the definition of finance charge in §1026.4(a) excludes optional fees.

My concern is with §1026.32(b)(1)(iii). It simply says that all items listed in §1026.4(c)(7) (other than amounts for future payment of taxes) would be included unless, among other things, the charge is not paid to an affiliate of the creditor. It does not say anything about the fee being considered a finance charge, although 4(c)(7) lists real estate related fees that are excluded from the finance charge definition. Among those fees is title insurance and of course in my scenario it is paid to an affiliate.

Am I being overly conservative with that interpretation?

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#2223682 - 10/14/19 06:42 PM Re: Section 32 Points and Fees Calculation Jason Ellis
rlcarey Online
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rlcarey
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Galveston, TX
My humble apologies - you are correct. Not sure what I was thinking.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2223683 - 10/14/19 07:51 PM Re: Section 32 Points and Fees Calculation rlcarey
Jason Ellis Offline
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Joined: Jun 2018
Posts: 28
Thank you rlcarey! I admit I was hoping I was being overly conservative in that interpretation!

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