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#2138324 - 07/17/17 02:04 PM Insurance Amount Changes - ? Trid & Escrow ??
Kim M. Offline
100 Club
Joined: Oct 2005
Posts: 129
Kansas
My loan officer closed a loan two weeks ago with an insurance quote for house insurance and the premium was paid at loan closing. Now two weeks later, we find out that the insurance amount was wrong (a choice between the customer and the insurance company) and the customer owes $500 more to the insurance company, which they will pay themselves. Do we need to do a new CD and do we need to do an new escrow analysis with the new premium amount? This is the first time this has happened and we are a bit confused on what to do. thank you

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TRID - TILA/RESPA Integrated Disclosures Rule
#2138341 - 07/17/17 02:48 PM Re: Insurance Amount Changes - ? Trid & Escrow ?? Kim M.
Truffle Royale Offline

10K Club
Joined: Jul 2003
Posts: 17,395
I would require a paid receipt for the additional $500; redo the CD with the correct premium amount and adjusted monthly escrow for insurance. I would also provide the borrower with a corrected payment letter and coupons.

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#2138343 - 07/17/17 02:55 PM Re: Insurance Amount Changes - ? Trid & Escrow ?? Kim M.
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
Not sure I agree on the revised CD. I would do a short year escrow analysis so they don't have a payment shock next year. I would equate it to this example in the commentary if this change transpired between the customer and the insurance agent.

iv. Assume consummation occurs on a Monday and the security instrument is recorded on Tuesday, the day after consummation. Assume further that ten days after consummation the municipality in which the property is located raises property tax rates effective after the date on which settlement concludes. Section 1026.19(f)(2)(iii) does not require the creditor to provide the consumer with corrected disclosures because the increase in property tax rates is not in connection with the settlement of the transaction.
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