When a loan processor receives a tittle study, the processor sends it to the attorney for the corresponding legal analysis, and also send a Loan Estimate if he understands that additional legal cost/fees are required. However, sometimes the analysis performed by the attorney results in additional costs, resulting in a new estimate. Since the most accurate cost estimate might be the one known by the processor after the legal evaluation, does the three-day period to disclose the fees should be the date when the complete evaluation of the tittle study is received, rather than the original date of receipt of the tittle study?

What information has changed that would allow you to treat this as a changed circumstance. I am not understanding. What "legal analysis"?

Once the Tittle Study is received, the attorneys in charge of the transaction will review it and probably there are some issues that would need to be addressed and could change the costs of the tittle studies.

You must work in a jurisdiction of which I am unfamiliar with the title insurance process. Additional costs to complete a title search in most jurisdictions are a pretty rare event. But if some unusual situation came to light during the title investigation, then yes, it most likely would be a valid changed circumstance. The three business days to provide a revised LE begins on the date you are told that additional work will be required. Not after the fact when you receive the actual cost or invoice.

This process reminds me of the old "title abstract" days.

I'm curious as to what a "title study" is. Can someone please enlighten me?

Dan, Iowa still does abstracts. The LE must show abstract updates, attorney opinion (prelim and final) and Iowa Title Guaranty fees.

The original poster works for a bank on Puerto Rico.

When the bank receives the tittle search or study, there are some instances that from the information from that document a new legal service, such as the cancellation of a previous mortgage or of a restrictive covenant, for example. That might cause a change in the legal fees originally disclosed in the Loan Estimate and, therefore require a revised loan estimate. When the tittle search or study is received it is refer to the attorney in charge of the case for their evaluation and analysis and then they will get back and inform if there are any issues that will require additional work and an increase of the fees.

The question that we have is when the three-day period to disclose the revised loan estimate begins. Is it at the moment the document is originally receved? or Is it when the attorneys identify any situation after revision of the document and sends a new legal fees estimate to the bank?

Victor,

Welcome to BOL. This is a scenario that I think might be pretty specific to Puerto Rico and I am not sure that we have a lot of participants from the island. This might be something that you might run past some of your peers at other local banks or maybe even have a discussion about with your bank's auditors or examiner. It is going to be pretty fact specific and at what point in the process you could customarily determine a good faith estimate of any additional costs that might be involved.

When the bank receives the tittle search or study, there are some instances that from the information from that document a new legal service, such as the cancellation of a previous mortgage or of a restrictive covenant, for example. That might cause a change in the legal fees originally disclosed in the Loan Estimate and therefore require a revised loan estimate. When the tittle search or study is received, the processor will both informed the client of any change in fees to their best knowledge and refer the title report to the notary to establish the required cost and fees required. This review by the notary may result in additional fees or confirmation or correction of fees, since they are considered the expert in determining the legal cost and fees.

The question that we have is When the three-day period to disclose the revised loan estimate shall begins. Is it at the moment the document is originally received by the processor, or Is it when the notary complete the assessment of the title report and sends the legal fees estimate to the bank? In other words, shall the mere fact of receiving the title study should impose on the processor the obligation to disclose eventhough the complete assessment of the title report is performed by the notary?