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#2268375 - 03/29/22 10:02 PM Title updates for construction draws
deltacrcm Offline
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Joined: Apr 2015
Posts: 217
On TRID constructions that require title insurance, we require attorney-prepared title updates, or "draw down endorsements", per construction draw. These title fees for the updates are collected from the borrower AT closing, never after closing. They are deposited into the legal fees GL for the branch to debit for draw down updates that are needed after loan closing. These fees would be paid to the same attorney or title company who issues the title commitment and final title policy, and that is a service the borrower can shop for.

We have been disclosing them in Section C as Title - Title Search. Should these be disclosed as inspection or handling fees instead of being lumped in with the title search fee, or are we disclosing them correctly?

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TRID - TILA/RESPA Integrated Disclosures Rule
#2268377 - 03/29/22 10:27 PM Re: Title updates for construction draws deltacrcm
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,926
Galveston, TX
If these are for date down endorsements, why are you not calling them just that? They are prepaid finance charges also.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2268395 - 03/30/22 01:24 PM Re: Title updates for construction draws deltacrcm
deltacrcm Offline
100 Club
Joined: Apr 2015
Posts: 217
So we are disclosing them correctly, I just need to have them change the name on the disclosure to be more in line with the industry standard, and make sure are including it in the prepaid finance charge?

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#2268512 - 03/31/22 05:50 PM Re: Title updates for construction draws deltacrcm
deltacrcm Offline
100 Club
Joined: Apr 2015
Posts: 217
My research has shown that title endorsements are not included in the prepaid finance charge calculation.

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#2268517 - 03/31/22 06:20 PM Re: Title updates for construction draws deltacrcm
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,926
Galveston, TX
Official Interpretation
4(c)(7) Real-Estate Related Fees

3. Charges assessed during the loan term. Real estate or residential mortgage transaction charges excluded under ยง1026.4(c)(7) are those charges imposed solely in connection with the initial decision to grant credit. This would include, for example, a fee to search for tax liens on the property or to determine if flood insurance is required. The exclusion does not apply to fees for services to be performed periodically during the loan term, regardless of when the fee is collected. For example, a fee for one or more determinations during the loan term of the current tax-lien status or flood-insurance requirements is a finance charge, regardless of whether the fee is imposed at closing, or when the service is performed. If a creditor is uncertain about what portion of a fee to be paid at consummation or loan closing is related to the initial decision to grant credit, the entire fee may be treated as a finance charge.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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