Owners Title

I know this has been discussed before, but I cannot find the forum and I have been going round and round with one of our loan reviewers on this.

Owners title- On the LE, it is disclosed in Section H (Other).

Where on the CD does it go if they do purchase owners title? Section C or Section H?

The items to be disclosed in the Other Costs table (Section H) on the Closing Disclosure should be disclosed as they would be disclosed on the Loan Estimate (Section H).

If owner's title is not required by the lender it would be disclosed in section H on the LE. If the borrower choses to purchase that coverage it would be disclosed in section H of the CD.

If the lender required the owner's coverage (which is unlikely) then it would be placed in section B or C on the LE, and in section B or C on the CD, as applicable.

Perfect, thank you both (by the way, that is what my side of the discussion was)

To tag onto Tracey's post: If OP is always a seller's fee here...and optional. Can we just omit it from the LE all together?

If it is not likely that the buyer -- your applicant -- will incur or pay a premium for owner's title insurance (OTI), you don't have to include that cost -- even with the "(Optional)" label -- in Section H of the loan estimate.

However, if OTI is always a seller's cost in your market, you might decide that it's a more accurate presentation of costs to include an estimate of the incremental premium cost for OTI and a seller credit for the full OTI premium if there is a simultaneous issuance discount provided for the lender's title insurance (LTI). That will have the net effect of reducing the cash due at closing, making it less than if you omitted any reference to OTI.

In other words, omitting the OTI amounts from the LE would tend to make your estimate of loan costs more expensive than a competitor's estimate that does include the OTI amounts, assuming all costs are otherwise the same. If an applicant happens to be shopping those costs, your loan estimate could create a disadvantage for you.

If you are in a simultaneous discount issue State, it further complicates this issue.

In our market OTI is always a seller cost. On the closing disclosure does it belong in section H or Section C?

H.

Only lender-required services and costs, recording fees and document taxes appear in sections A through G. Lenders, as far as I know, don't mandate that a borrower obtain OTI. Definitely Section H.

Thank you very much.