CFPB Overview Simultaneous issue John Martin August 17-21

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.

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

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

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

Owner’s Standard premium -- $1,782 Lender’s premium (full) -- $1,630 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

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

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

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

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”)