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title insurance/owner's policy TRID

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  • #7009
    mdunker
    Member

    I am trying to figure out what to dislose for my Owner’s Policy i am looking at the commentary of 1026.37 (g)(4) but am still a bit confused.

    My loan policy charge is $400.00, and my whole owner’s policy is $635.00. the discout amount is $300.00 would the amount of the owner’s policy that i would disclose be $335.00?

    #7011
    aschliebe
    Participant

    I just was researching this yesterday,
    Here is what I shared with our bank.

    Full owner’s title insurance premium + Simultaneous issuance premium for lender’s insurance coverage-Full premium for lender’s insurance coverage = disclosed amount.

    I tried plugging the above numbers in but I wasn’t sure if I was putting the correct ones in the correct place. The discount amount you reference, is that the lower issuance premium for the lender’s policy?

    If that is the case I THINK this is your answer;):
    Full owner’s title insurance premium (635) + Simultaneous issuance premium for lender’s insurance coverage (300)-Full premium for lender’s insurance coverage(400) = disclosed amount (535).

    Compliance gurus correct me if I’m wrong.

    #7013
    rcooper
    Member

    aschliebe I agree with your calculation, but I’m not sure I’m fully understanding mdunker’s listed costs. Here’s a hypothetical example just so we’re clear:

    Owner’s title insurance premium: $600
    Lender’s title insurance premium: $500
    Simultaneous issuance premium: $ 350

    $600 (owner’s title premium) + $350 (simultaneous issuance premium) = $950
    $950 – $500 (lender’s title premium) = $450 disclosed for owner’s title

    Commentary to 1026.37(g)(4)-2:Simultaneous title insurance premium rate in purchase transactions. The premium for an owner’s title insurance policy for which a special rate may be available based on the simultaneous issuance of a lender’s and an owner’s policy is calculated and disclosed pursuant to § 1026.37(g)(4) as follows:

    i. The title insurance premium for a lender’s title policy is based on the full premium rate, consistent with § 1026.37(f)(2) or (f)(3).

    ii. The owner’s title insurance premium is calculated by taking the full owner’s title insurance premium, adding the simultaneous issuance premium for the lender’s coverage, and then deducting the full premium for lender’s coverage.

    There is also a discussion of this calculation method in the preamble to the final rule beginning on page 853: https://files.consumerfinance.gov/f/201311_cfpb_final-rule-preamble_integrated-mortgage-disclosures.pdf.

    #7029
    mdunker
    Member

    I am wanting to know what you deem the simultaneous title insurance policy is. Would this be the amount of the discount or the actual Leder’s policy amount.

    Also, with all this I am trying to figure out how I would make the buyer whole, if I use your example for instance on The LE I put under the Lender’s Policy of $500.00, then for the Owner’s Policy i put $450.00. In our area the Buyer would only pay generally $100.00 for the Loan Policy and the seller pays for the rest of the title insurance. How would I show this on the CD when the Regulation and the commenatry gives me the same instructions.

    #32523
    Sandy
    Participant

    I have a question about title insurance disclosures for a business purpose loan secured by a 1 – 4 family dwelling. We use Title Center of Greater KY for almost all title insurance written on our real estate loans. We typically give 2 titles insurance forms for these particular loans. (Notice of Free Choice of Agent and Insurer AND Disclosure With Respect to Title Insurance). When I review loans I will see that these 2 particular documents are not signed by the customer or they will be dated the day of closing. Is it in regulations that these 2 documents are to be given on these type of loans? And if so, at what point of the loan are these required to be given? I would assume within 3 business days of loan application but one of my loan officers wants to know if there is something in regulations stating this. I am trying to figure out if there would be a compliance violation doing it their way.

    #32536
    rcooper
    Member

    Kentucky Revised Statutes:
    Notice of Free Choice of Agent and Insurer – https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=17027 and here’s the form:https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=17027.

    I do not see a timing requirement nor a signature requirement. It makes sense to give this to the borrower before they purchase insurance. If it is your policy to have all disclosures signed, even when signatures are required by law/regulation, then it would make sense to have these signed as well. Where the law is silent develop your procedure, to best fit the intent of the law, and comply with that.

    Disclosure with Respect to Title Insurance – Is this the form? http://insurance.ky.gov/ppc/Documents/titlemortgage071217.pdf. If so, I couldn’t find the specific requirement in the KRS. You might ask the title company or KDI for the citation. As with the other form, if there isn’t a specific timing requirement, go with the intent of the law on timing (customers need it before they make a decision) and your procedures for signatures.

    #34498
    Sandy
    Participant

    We give the Notice of Free Choice of Agent and Insurer & Disclosure with Respect to Title Insurance Disclosure for our loans that the customer purchase title insurance. We were told by the insurance company years ago that these two disclosures were to be given on any loan, consumer and business purpose loans, that is secured by property with a 1 – 4 family dwelling ONLY. That the loans that were secured by land or a commercial building they were not required to be given. Now the newer representative at our title insurance company is saying that ANY loan that we sell title insurance on (no matter what the collateral is) we DO have to give these two disclosures but she says she is not a compliance expert either…. Can you tell me what type of loan these 2 disclosures are require to be given on?

    • This reply was modified 10 months, 3 weeks ago by Sandy. Reason: Want notification of reply
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