Thread Options
#2258737 - 08/25/21 09:28 PM Incorrect Title Quote - Which LE for Tolerance?
MJNoone Offline
Member
MJNoone
Joined: Dec 2010
Posts: 94
Kansas
In a TRID purchase transaction, the Title Company quoted a settlement fee of $650 which was disclosed on the Initial LE.

A revised LE was sent when the Rate was locked. MLO confirmed title and settlement fees with the Title Company personnel. At this point, Title Company quoted a fee of $350 since they were only closing the sale portion of the transaction and not the loan portion.

Now we get to closing and Title Company says settlement fee is $650 because they charge for loan closing whether they do that or not and the person who gave the quote for the revised LE misquoted.

If the Title Company won't budge on their final settlement fee of $650, is our tolerance comparison between the CD settlement amount ($650) and the Initial LE amount ($650) or the Revised LE amount ($350) for determination of any tolerance violations?
_________________________
M Noone

Return to Top
TRID - TILA/RESPA Integrated Disclosures Rule
#2258738 - 08/25/21 09:31 PM Re: Incorrect Title Quote - Which LE for Tolerance? MJNoone
Tater Offline
Platinum Poster
Joined: Jan 2006
Posts: 617
Missouri
Unless you have a valid changed circumstance to raise back to your initial disclosure, a valid re-disclosure at a lower amount would supersede the initial so you're going to be stuck with a lender credit unless your title company acknowledges their mistake, in my opinion.

Or at least that's how I would guide my staff.
_________________________
Born once? Die twice.
Born twice? DIE ONCE!

Loan Review, HMDA, ALLL

Opinions are my own and do not reflect any others

Return to Top
#2258740 - 08/25/21 09:44 PM Re: Incorrect Title Quote - Which LE for Tolerance? MJNoone
raitchjay Online
Power Poster
Joined: Oct 2009
Posts: 8,571
OK
I'd be pushing back on the title company and their response of "your bank has to eat our employee's mistake"....and if they won't budge, inform them that we would no longer be doing any business with them.
Last edited by raitchjay; 08/25/21 09:45 PM.
_________________________
I'm fixin' to fix that.

Return to Top
#2258746 - 08/25/21 10:28 PM Re: Incorrect Title Quote - Which LE for Tolerance? MJNoone
MJNoone Offline
Member
MJNoone
Joined: Dec 2010
Posts: 94
Kansas
Looks like I'm directing staff down the right path . . . not that it is the one they want to be going down! Sometimes I just need clarification that my "bad news" is justified wink

I have strongly encouraged the MLO's to not make a Title Company's problem - our problem, BUT . . . . frown
_________________________
M Noone

Return to Top
#2258757 - 08/26/21 12:32 PM Re: Incorrect Title Quote - Which LE for Tolerance? MJNoone
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,310
Galveston, TX
I am sorry - I do not understand. You initially disclosed a $650 charge that set your baseline for tolerances. The fact that you were told later in error by the title company and you disclosed $350 on a revised LE in good faith at the time does not impact your original tolerance baseline. A revised LE that is in good faith at the time does not lower the original baseline tolerance. You use change of circumstance disclosures to raise your baselines and not lower them, unless the fee or lender credit is interest rate dependent involving a rate lock.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2258766 - 08/26/21 01:44 PM Re: Incorrect Title Quote - Which LE for Tolerance? MJNoone
MJNoone Offline
Member
MJNoone
Joined: Dec 2010
Posts: 94
Kansas
The fee change was NOT interest rate dependent so for tolerance purposes use the baseline of $650 compared to the final CD fee. That makes sense, but I couldn't find any guidance yesterday that would help me explain it to my MLO. The Revised LE kept tripping us up wink Thanks Randy - you've just made my day smile
_________________________
M Noone

Return to Top
#2258768 - 08/26/21 01:47 PM Re: Incorrect Title Quote - Which LE for Tolerance? rlcarey
Tater Offline
Platinum Poster
Joined: Jan 2006
Posts: 617
Missouri
Originally Posted by rlcarey
I am sorry - I do not understand. You initially disclosed a $650 charge that set your baseline for tolerances. The fact that you were told later in error by the title company and you disclosed $350 on a revised LE in good faith at the time does not impact your original tolerance baseline. A revised LE that is in good faith at the time does not lower the original baseline tolerance. You use change of circumstance disclosures to raise your baselines and not lower them, unless the fee or lender credit is interest rate dependent involving a rate lock.

Randy, as I'm seeing my answer disagrees with yours, could you confirm that a revised LE with lower fee limitations would not necessarily dictate a lender credit if the fee went back up? The guidance we had received (OCC midwest) was that the last LE would govern absent a valid changed circumstance - and this specific case doesn't seem to rise to that level.

I want to be able to guide my lenders appropriately, too, but that goes against what we had been told for several exam cycles (albeit verbally).
_________________________
Born once? Die twice.
Born twice? DIE ONCE!

Loan Review, HMDA, ALLL

Opinions are my own and do not reflect any others

Return to Top
#2258771 - 08/26/21 02:11 PM Re: Incorrect Title Quote - Which LE for Tolerance? MJNoone
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,310
Galveston, TX
I cannot answer for the OCC, But I would be asking them on what they are basing this opinion. Your baselines can only be changed due to a valid changed circumstance and that only happens when there is an increase in fees. If you issue a revised LE and fee is lower and as long as that was based on good faith at the time of issue, the fact that the fee may go back up before closing has no impact on your underlying baselines which are established with the initial LE. Now, if you are disclosing lower fees on subsequent LE and those lower fees are not based on good faith, I can see them possibly saying that would be a UDAAP practice.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2258773 - 08/26/21 02:24 PM Re: Incorrect Title Quote - Which LE for Tolerance? MJNoone
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,346
Cape Cod
I totally agree with Randy. However, I also want to point out that your title company is dealing with its mistake in bad faith. They know they made an error and they are trying to weasel out of it. If you can't get them to honor their lower quote, perhaps you should be dropping that title company from your list of approved vendors.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top