Does a warranty deed prep fee belong in section C or H of the CD? This fee was not disclosed on the LE. The fee is payable to a third party, the title company that they shopped for their title insurance. Is it considered shopping if they were given the list for title companies but it wasn't known at the time of the LE that there was going to be a prep fee? Tolerance issues?

Warranty deed prep fees are normally a seller charge, not a buyer's so they wouldn't go on the buyer's LE or CD.

Thank you for the reply but it's not a purchase if I'm reading your response correctly. Customer needs ex off the deed of trust so it's a refinance.

Normally the divorce decree will call for the ex to deed their share back to your borrower. If that's the case, it would still be their expense, not your borrower's and wouldn't go on the LE or CD.

If it were the borrower's fee - and the borrower DID shop - and this Deed was not known about when the LE was disclosed - and it is a doc prep fee from the title company (that was not disclosed on your written provider list) ...... then we would call that an unlimited tolerance items due to it being a title company fee, and document it but not redisclose for it - however, the recording fees will still need to be disclosed for if they go out of tolerance or documented if they do not.

Thank you Truffle and MonicaMc for the help.

MonicaMc, I don't follow how recording fees for a deed would ever be a tolerance item. Basically only items that are a condition of getting the loan are tolerance items. I found a neat table here that helps.

For us, if the title company is making it a requirement on the title commitment, which they might if the divorce decree is requiring it, then it would be a requirement of our loan so we can get title insurance.
BTW, awesome chart!

I don't follow how recording fees for a deed would ever be a tolerance item. Basically only items that are a condition of getting the loan are tolerance items.

So you're saying you would not require me to record a warranty deed in my name to get a loan on a piece of property I purchased a few months ago in a private transaction and I had not yet recorded the deed transfer?

Also I did not see on that chart where the deed recording fee was exempt since it is paid to a public official. In fact the following statement is in the 10% column:

Note: No additional lines may be added for recording. Any other recording fees will be totaled with Mortgage and Deed on one line.

Also, most likely the title company will not issue a lenders policy if the deed has not been, or will not be properly transferred. Since you require the lenders policy you will require the deed to be recorded in order to be able to get the title company to issue you your policy.

I'll have to opine that if the borrower is paying the recording fee for the deed then the fee is subject to the 10% tolerance category just like any other recording fee would be.


PS. I took a 3rd look a the chart and saw Warranty Deed listed under Section H. IMO recording a warranty deed is not an option in obtaining a loan. If the property is not properly deeded to the borrower, or grantor, then the loan is not going to be made.