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#2242159 - 09/08/20 10:42 PM Notification of fee changes after closing
Refresher2020 Offline
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Joined: Aug 2020
Posts: 34
Good evening,

How are lenders handling these types of situations:

1. Recording fees overcharged on CD. If you learn within 30 days that the recording fees were overstated on the CD. How are you coordinating with the title companies? Do you send a PC CD, explanation letter along with a check from the title company? Or is the Title company just sending a check?
2. Recording fees overcharged on CD. If you learn well after 30 days (COVID) that the recording fees were overstated on the CD. How are you coordinating with the title companies? Are you issuing a PC CD anyway - for good faith measures?
3. Title insurance premium changed - so the title company sent you one figure for the CD but the invoice they provide doesn't match? they say the premium is the undiscounted/discounted rate... How are you handling these scenarios and they say the invoice is correct?

Thank you for the feedback and for sharing your processes. The title companies are being removed from our approved list!

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TRID - TILA/RESPA Integrated Disclosures Rule
#2242170 - 09/09/20 01:08 PM Re: Notification of fee changes after closing Refresher2020
rlcarey Offline
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Galveston, TX
1. You need to work that out with the individual title companies. If you paid them for the recording fees and they were less, then likely they should be cutting you a check for the difference and you would then issue a revised CD along with a check to the customer.

2. Same as above.

3. If it resulted in an undercharge to the consumer, then I suggest you tell the title company to go pound sand and if they refuse to cooperate, tell them they are no longer an approved vendor. If it resulted in an overcharge to the consumer, see above.
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#2242208 - 09/09/20 07:33 PM Re: Notification of fee changes after closing Refresher2020
Refresher2020 Offline
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Posts: 34
Thank you rlcarey!

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#2242253 - 09/10/20 02:53 PM Re: Notification of fee changes after closing Refresher2020
John Burnett Offline
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I agree with Randy. Even when it is technically too late to eliminate the disclosure error, sending a revised closing disclosure is the right way to go (along with the refund, when appropriate). And I'd love to be a fly on the wall when you tell a title company to go pound sand.
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#2255474 - 06/17/21 04:43 PM Re: Notification of fee changes after closing Refresher2020
Compliance504 Offline
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Joined: Dec 2008
Posts: 673
Tennessee
New to overseeing TRID...

We've had a title company increase the fee for title insurance before the loan closing.....so it is now higher than what was disclosed on the LE.....

Is this a valid changed circumstance? Can we just disclose the higher amount on the CD?

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#2255475 - 06/17/21 04:48 PM Re: Notification of fee changes after closing Refresher2020
Inherent_Risk Offline
Gold Star
Joined: Jan 2017
Posts: 333
Did you let the borrower shop, and if so did the borrower choose the title company on your service provider list?

It's not a valid CoC unless something changed that caused the increase. Whether the bank is responsible depends ont he answers to the above.

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#2255482 - 06/17/21 05:05 PM Re: Notification of fee changes after closing Refresher2020
Compliance504 Offline
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Posts: 673
Tennessee
I was told this.....we make the borrower choose from a list of title companies so the fee is always in the “Cannot Shop For” section. Yes, the title company is on our approved list.

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#2255487 - 06/17/21 05:36 PM Re: Notification of fee changes after closing Refresher2020
rlcarey Offline
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Galveston, TX
Then it would be subject to 0% tolerance unless there was a valid changed circumstance. Usually, lender title policy premiums are set by the loan amount and would not be subject to a last minute change without something else going on.
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#2255488 - 06/17/21 05:39 PM Re: Notification of fee changes after closing Refresher2020
Compliance504 Offline
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Posts: 673
Tennessee
Thanks so much, Randy!!!!!

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#2255491 - 06/17/21 05:50 PM Re: Notification of fee changes after closing Refresher2020
Compliance504 Offline
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Joined: Dec 2008
Posts: 673
Tennessee
A title company raising their fees between LE and CD is not a valid changed circumstance....correct...

We have to go with the what was quoted at the time of LE.....

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#2257569 - 08/03/21 03:20 PM Re: Notification of fee changes after closing Refresher2020
Jsevers Offline
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Joined: Feb 2020
Posts: 4
A borrower is charged for services not ordered - cannot shop.
The final CD charges the borrower for tax transcripts that are not ordered, however the borrower is NOT charged for multiple employment verifications. What are the rules around reimbursement / offsetting if well after 30-60 day time frame from consummation.
Thank you

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#2257596 - 08/03/21 06:55 PM Re: Notification of fee changes after closing Refresher2020
rlcarey Offline
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Galveston, TX
Besides it being a Section 8 violation you mean?

1024.14(c) No split of charges except for actual services performed. No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed. A charge by a person for which no or nominal services are performed or for which duplicative fees are charged is an unearned fee and violates this section.

Not to mention the fact that if these are Section B charges, you told the borrower that you actually paid those fees to a specific third party in error and in violation of TRID and you failed to properly disclose other specific charges related to the loan..
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#2257609 - 08/03/21 07:39 PM Re: Notification of fee changes after closing Refresher2020
Jsevers Offline
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Joined: Feb 2020
Posts: 4
Thank you Randy - that is the validation I was looking for!
Much appreciated!

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#2259554 - 09/10/21 05:30 PM Re: Notification of fee changes after closing Refresher2020
MassCompliance4 Offline
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MassCompliance4
Joined: Sep 2009
Posts: 24
MA
A quick question regarding the original post and Randy's answer back in September 2020 and how this relates to Right of Rescission, assuming that the loan in question is a "rescindable" loan: if you have to issue a revised CD and a check to "cure" the issue, would you also need to send that revised CD and check with new ROR notices to all applicable parties in order to "cure" the extended 3-year rescission period for not having delivered the "material disclosures"?

I am trying to understand 1026.23(a)(3)(i) & (ii) and how banks "fix" when Closing Disclosures are incorrect/inaccurate and thus "material terms", as listed, are not "disclosed" and thus the rescission period was not started/ended in the usual 3-day time frame - and would then automatically end after three years, when the interest is transferred, or when the property is sold, whichever happens first.

Am I misunderstanding this intersect between certain TRID "cures" and ROR period extension "cures" both from a regulatory requirement perspective but also from a real-world practical "this is how it's done" perspective?

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#2259587 - 09/10/21 09:39 PM Re: Notification of fee changes after closing Refresher2020
rlcarey Offline
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Galveston, TX
You have asked the $64,000 question. Some of us asked the CFPB point blank about this issue in our comment letters to TRID 2.0 and the response from the CFPB was crickets. As far as I know, this has yet to be tested in a court of law as to whether a post-closing CD extends, re-opens or busts the rescission period. We will have to wait for a court case.
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#2259595 - 09/10/21 11:49 PM Re: Notification of fee changes after closing Refresher2020
rainman Online
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Regulation Z Section 1026.23(a)(3)(ii):

(ii) For purposes of this paragraph (a)(3), the term “material disclosures” means the required disclosures of the annual percentage rate, the finance charge, the amount financed, the total of payments, the payment schedule, and the disclosures and limitations referred to in §§ 1026.32(c) and (d) and 1026.43(g).

Were any of the material disclosures specified above inaccurate? And to be more specific, is the disclosure of any of the items listed above different on the revised CD than it was on the original CD? That's the critical question.
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#2259668 - 09/14/21 02:44 PM Re: Notification of fee changes after closing Refresher2020
MassCompliance4 Offline
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MA
Thank you for your response, Randy. At least I now know that it is something to consider and that I am not totally out in left field...for once anyway. smile

And rainman - if I am understanding your post, I think you are cluing in on how we are choosing to handle this: "cure" with a check and a revised CD anything that is curable. And anything that may not have been "accurate" but is still within the established tolerance for the category within the "material disclosures", revised CD. And anything else, do the best we can and as Randy has said, await all of our colleagues in "Legal" to see how this may play out. And given the impacts of COVID on the home mortgage/equity/refinance market and the lifting of foreclosure moratoriums, we may get that "court case" soon enough.

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#2259681 - 09/14/21 03:57 PM Re: Notification of fee changes after closing Refresher2020
rainman Online
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MassCompliance4: My comment was more directed at the idea that there are lots of circumstances where a tolerance cure is required that would have no impact on rescission. If a fee is not a finance charge, then a tolerance cure for that fee would not impact finance charge, APR, amount financed, total of payments, or payment schedule.
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