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CFPB Overview Simultaneous issue John Martin August 17-21

CFPB Overview Simultaneous issue John Martin August 17-21.

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CFPB Overview Simultaneous issue John Martin August 17-21

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  1. CFPB Overview Simultaneous issue John MartinAugust 17-21

  2. The Problem - When both a loan and owner’s title insurance policies will be purchased in a transaction (called “simultaneous issuance”) the TRID requires the lender or settlement agent to inaccurately disclose the title premiums on the Closing Disclosure.

  3. How does the Rule handle: Regardless of lower, actual simultaneous issue rate for Lender’s Policy, pricing to be shown at full rate. If an Owner’s Policy is also purchased, rate shown is in accordance with CFPB formula – again, not the actual rate charged

  4. LOAN POLICY Under TRID, the loan policy must be shown on the Loan Estimate and Closing Disclosure at the full rate without adjustment for simultaneous issue, regardless of whether the filed or promulgated rate for a simultaneously issued loan policy is lower

  5. Owner’s policy Under TRID, the Owner’s policy must be shown on the Loan Estimate and Closing Disclosure according to the CFPB formula: Owner full + Loan policy - Full Loan Premium Simultaneous Premium Premium

  6. Example Sales Transaction Sales price -- $500,000, Seller pays Owners Loan Policy -- $400,000, Buyer pays Lenders Extended Owner’s Standard premium -- $1,782 Lender’s premium (full) -- $1,630 Lender’s premium (Simultaneous) -- $610

  7. Closing Disclosure under TRID rules Owners (full owner + Loan Sim – Loan Full) $1,782 + 610 - 1,630 = $762 Loan (full rate) -- $1,630

  8. Comparison between TRID and actual TRID Actual Owner’s -- $ 762 $1,782 Loan -- $1,630$ 610 Total $2,392 $2,392

  9. Useful Resources • CFPB website: http://www.consumerfinance.gov/ • Small Entity Compliance Guide: http://files.consumerfinance.gov/f/201409_cfpb_tila-respa-integrated-disclosure-rule_compliance-guide.pdf • Disclosure Timeline Example: http://files.consumerfinance.gov/f/201409_cfpb_tila-respa-integration-disclosure-timeline-example.pdf

  10. Useful Resources • Form Guide: http://files.consumerfinance.gov/f/201409_cfpb_tila-respa-integrated-disclosure-guide-to-form.pdf • Stewart CFPB blog: http://www.stewartpoint.com/AboutStewart/CFPBWatch/default.aspx • ALTA website: http://www.alta.org/ (search “CFPB”)

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