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Rules on Owner's Title Insurance

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Question: 
We had a borrower who owned his land free and clear and purchased owner's title insurance years ago when he bought the land. He came to us for a construction/perm loan and specifically said that he did not want owner's title insurance for the new transaction. We did not put on the GFE. Is this acceptable since the borrower specifically stated that he did not want owner's title insurance and the file was documented as such?
Answer: 

OTI must always be disclosed on the GFE for purchase transactions regardless if purchased or who will pay for it. Review the section for Block 5 in the 4/2/10 RESPA FAQs.

First published on BankersOnline.com 1/16/12

First published on 01/16/2012

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