Has anyone have any issues with Title companies not providing the Seller information on the HUD1 on a purchase transaction? Apparently, some title companies are only providing each party (Buyer and Seller information) their own information on the HUD1 pursuant to the GLB Privacy Act. As a lender, I thought that we have a broad exemptions to obtain information on a consumer that may otherwise be protected under the privacy act. Title is questioning why a lender would need a seller's information if they are extending credit to the buyer, as such, the buyer's information should suffice. Any thoughts?

While I see no harm in only giving the buyer the buyer information and the seller the seller information, the bank should get it all. Where's the title company coming from?? They are not subject to GLB! I would include instructions to provide this information in your closing instructions - after all - they are working for you under your engagement agreement.

I've seen buyer and seller only copies long before GLB was thought of.

See this thread and John's comments.

The title company claims that they fall under the GLB Act (since they perform settlement services pursuant to the definition of a "financial institution") which prohibits them from providing nonpublic personal information such as the HUD1 information of the Seller unless Seller consents in writing to release his/her information.

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Where's the title company coming from?? They are not subject to GLB!

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I beg to disagree with you. The Title Company is performing a "financial service" as defined in GLBA and they are subject to it.

The Title Companies in our area began doing this several months ago too. I'm not sure why the bank would need the sellers information.

Thanks for sharing the discussion. However, don't you as a lender need both the seller and buyer information on the HUD1? For example, a lender would want to know if the buyer's deposit is actually cash and not a credit from the seller and other related information indicative of the fees showing on the HUD1. We have investors who are not willing to buy the loans absent both information on the HUD1.

I concur. My earlier statement was a little broad in that, sharing information on the seller with the bank financing the transaction should not be governed under GLB due to the general exception of servicing or processing a financial product or service requested or authorized by the consumer. There is little non-public personal information on the HUD-1 regarding the seller anyway? It's just a breakdown of the transaction costs. As a bank, I would insist on seeing it to ensure the title company fulfilled all aspects of the closing transaction in the best interests of the bank.

I would agree with you, if you could prove to me (as the seller) that the Title Co needed to share my information with the buyer’s bank, in order to complete the processing of my transaction.

If the secondary market demanded it in order to lend to the buyer, you have a point.

That would be my question - "what" non-public information, as a seller, are you trying to protect that is on a HUD-1?

This is beside the point and a little off subject, but as a seller or buyer, I think I would want another set of eyes on the transaction. If no one is privy to the whole transaction besides the title company - I can see the potential for all kinds of fraud.

If applicable, the payoff of my previous loan on the property and possibly the name of my bank.

I may be off base here, but isn't the title company acting on behalf of the bank and as the bank's agent?

In reply to: possibly the name of my bank. - the name of the bank holding the mortgage is going to be in your title work.

In reply to: the payoff of my previous loan on the property - don't you need this information for your loan figures?

Dan, That's my point also. But, I may have crawled out on a lonely limb.

I think the title company is nuts. When a buyer and a seller enter a contract, they create a business relationship. The HUD-1 reflects that business transaction. RESPA doesn't provide for split disclosures. I think that some (most likely HUD) could find a split-HUD-1 to be non-compliance because it doesn't have all the information required.

I agree, while Appendix A does provide for:

"Lines and columns in Section J which relate to the Borrower's transaction may be left blank on the copy of the HUD-1 which will be furnished to the Seller. Lines and columns in Section K which relate to the Seller's transaction may be left blank on the copy of the HUD-1 which will be furnished to the Borrower."

I don't think that HUD would go for keeping settlement details confidential from the bank that was funding the transaction.

Well looks like Lucy and I are out there with you.

Thanks for all the valuable input. I will go back to the title company again to see if we can obtain this information.

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I may be off base here, but isn't the title company acting on behalf of the bank and as the bank's agent?

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Actually - let's step back a moment here and find out if we are talking about the Title Company simply providing Title Insurance, or Escrow Company, or Title that is also doing the Escrow Settlement.

If the Title company is only acting to provide Title Insurance in a purchase transaction, then it is providing services to both the bank and the buyer. The seller would not be involved except for the Title Company to research the records to provide clear title. The Title company would not be the entity that prepares the HUD-1 statement anyways.

It is the Escrow company that acts as agent for all parties involved - buyer, seller and lender. If the Title company is also acting as the escrow, then that department or unit of the Title Company providing the escrow services represents all parties involved. Escrows do have a duty of confidentialty to all parties involved that predates Gramm-Leach-Bliley by quite a few years.

As to the question whether or not the lender should be allowed to see the seller's portion of the settlement, I do not have a clear answer. I can try and contact some Escrow Officers I know personally and find out their views.

I have no problem with the buyer – seller – title co relationship, or the buyer – buyer’s bank – title co relationship. However, I do not feel that the seller automatically has a relationship with the buyer’s bank. I think this is where the Title Co is coming from and am waiting for a call back from my title guy.

Why does the buyer’s bank need the payoff on the sellers mortgage. This really irritated me when I sold my first house several years ago.

The title company has to close the loan per the instructions from the lender. The lender needs to have the sellers HUD-1 information to make sure that the seller did not contribute more to the transaction than was approved by the lender. I would remind the title company that they were working on behalf of the lender. Any lender selling the loan on the secondary market has to deliver the HUD-1 to the investor, and they want ALL of it.

I believe I would also remove this title agent from my approved list, as it appears they are trying to hide things from me, the lender.

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Why does the buyer’s bank need the payoff on the sellers mortgage. This really irritated me when I sold my first house several years ago.

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Since you as the lender are paying off that mortgage, how about:

§226.18: Content of Disclosures (01/01/97)
For each transaction, the creditor shall disclose the following information as applicable:

(c) Itemization of amount financed.
(1) A separate written itemization of the amount financed, including:40
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40 Good faith estimates of settlement costs provided for transactions subject to the Real Estate Settlement Procedures Act (12 USC 2601 et seq.) may be substituted for the disclosures required by paragraph (c) of this section.
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(i) The amount of any proceeds distributed directly to the consumer.
(ii) The amount credited to the consumer's account with the creditor.
(iii) Any amounts paid to other persons by the creditor on the consumer's behalf. The creditor shall identify those persons.41

The check we issue is made out to the title co and they in turn pay off any outstanding liens on the collateral. We don’t identify the seller’s bank anywhere on our HUD1.

As far as babysitting goes, the title co is obligated to provide clear title and is provided specific instructions to do so. I’m not saying that title co’s never make a mistake, but it’s not in their best interest to screw this up. Our contract provides for legal remedies if they do.

I’m sorry, but I have to side with the title co’s here. For the past year we’ve been demanding that everyone understand our GLBA woes, from the major service providers to the janitor. We need to at least understand where they are coming from before we pass sentence.

As I have indicated before, one reason a lender would want to look at the Seller information is to ensure that the down payment is actually not a credit from the seller. Further, some states like Georgia requires that Seller paid fees are included in the Points and Fees Test calculation.

We are still getting HUD's with buyer and seller information. However, as to split HUD's, I believe that is acceptable as RESPA Section 4 Uniform Settlement Statement(a) says, "Nothing in this section may be construed to require that that part of the standard form which relates to the borrower's transaction by furnished to the seller, or to require that that part of the standard form which relates to the seller by furnished to the borrower." This to me indicates that the title company is allowed to prepare 2 separate HUD's. Whether or not the title company provides both to the lender is another issue. I agree the lender needs a copy to review, for example if the seller pays some of the buyers closing costs, if the costs are applied to any of the items we require, we need to know they were paid for and not just omitted from the HUD in error.

The title company agreed that the HUD1 Seller information can be provided to lenders without violating any privacy laws. Just FYI- FTC (16 CFR 313.14, Exceptions) provides a broad exemptions for lenders to obtain a nonpublic consumer information to allow a potential investor/lender to review such information.