Seminar: Closing Disclosure Form Training

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1 Seminar: Date: February 15, 2016

2 Seminar: Date: February 15, 2016 Presented by: Sandi Allfrey Training and Development Manager Attorneys Title Guaranty Fund, Inc.

3 CDF FAQs Calculating Title Policy Charges for the CDF Providing Title Fees to the Lender Pre/Post Closing Considerations CDF and Check Writing Lender Fees and Credits Buyer/Seller Credits Understanding the Cash to Close Table and Tips when the Cash to Close is Out of Balance ALTA Settlement Statement

4 Formula for Calculating Title Charges for the CDF *Owner s Policy (Actual) + *Simultaneous Loan Policy (Actual) Total Charge for Policies Total Charge for Policies Non-Simultaneous Loan Policy Amount Owner s Policy CDF Owner s Policy (Actual) Owner s Policy CDF Credit to Buyer

5 TRID Owner s Policy Calculator (ATG Form 4200) Seminar Title

6 TRID Owner s Policy Calculator (ATG Form 4200) Seminar Title

7 Wells Fargo Settlement Agent Communications December 17, 2015 Follow Wells Fargo instructions to disclose fees and credits. There are multiple ways to be compliant with the Rule. One example: There are different methods for disclosing seller-paid premiums for owner s title insurance. Although the Rule included specific direction on how to disclose the premiums for both lender s and owner s title insurance policies on the CDF, it did not specify how to disclose seller-paid amounts when the actual owner s policy premium differs from the premium disclosed on the CDF.

8 Wells Fargo Settlement Agent Communications December 17, 2015 Follow Wells Fargo instructions to disclose fees and credits. Wells Fargo s decision was to apply the seller-paid amounts for owner s title insurance at a fee level, rather than as a lump sum title premium adjustment. Example: Seller agrees to provide owner s policy of title insurance with actual cost of $1,900. Owner s policy premium disclosed on the borrower CDF (per the Rule) is only $600. Reflect the $600 as seller paid (Section H). Apply the remaining $1,300 expected from the seller to the cost of the lender policy, reflecting that amount as seller paid (Section B or C, as appropriate).

9 When Title Adjustment Credit is Not Allowed Continue to use the TRID Calculator to determine the amount of the Owner s Title Policy, but instead of creating a credit in Section L for $1, (in this example), enter the amount in the Seller Paid Column next to the Loan Policy. Then enter the Simultaneous Loan Policy Amount in the Buyer column. TRID Tuesday The Closing Disclosure Form

10 Wells Fargo Settlement Agent Communications December 17, 2015 Use only the Wells Fargo provided and approved borrower Closing Disclosure Form (CDF). Collaborate to provide actual fees for the borrower CDF. Follow Wells Fargo instructions to disclose fees and credits.

11 Wells Fargo Settlement Agent Communications December 17, 2015 Settlement agent must provide seller CDF. Our initial closed loan reviews reflect a concerning number of examples where no seller CDF was provided to us. In some cases a seller-signed settlement statement was provided, and some include a signed HUD-1. For purchase transactions, the Rule requires the settlement agent to create and provide the seller CDF and to provide a copy to the lender. Wells Fargo's closing instructions require a copy of the seller CDF be provided to us with the executed closing package.

12 Wells Fargo Settlement Agent Communications December 17, 2015 Settlement agent must provide seller CDF. A settlement statement may be provided in addition to, but not in place of, the seller CDF. The HUD-1 should no longer used unless the loan application was prior to October 3, 2015, or the transaction is outside the scope of the Rule. Confirm with your Wells Fargo closer if you have a transaction for which you think a HUD-1 still applies.

13 Providing Title Fees to Lender Pre-Closing If the lender requests title fees via , fee sheet, or any other means other than requesting a preliminary CDF we should provide them with actual charges, i.e., Owner s Title Insurance, $1,600.00, and Loan Title Insurance, $ If the lender sends ATG its preliminary CDF with the actual charges we should send them the CFPB Explanation and ask the lender to instruct ATG to leave the fees as is. If the lender requests title fees via a preliminary CDF, we should send the preliminary CDF with the fees disclosed as the CFPB requires. However, we are to show the title fees as instructed by the lender.

14 Who signs what form at closing? Below is a checklist to help determine what should be signed at closing and who should receive a copy of the form. Lender Prepared and Approved CDF Signed by Borrower(s) Cash from/to match cash to close on ALTA Settlement Statement ALTA Settlement Statement Combined Signed by Borrower(s), Seller(s), and Settlement Agent. This form authorizes ATG to disburse. Cash from/to borrower match with lender prepared and approved CDF in their closing package Cash from/to seller match with Seller CDF in REsource Seller CDF Signed by the Seller(s) Cash from/to match ALTA Settlement Statement

15 Agency Escrow Disbursement Agreement Revised Paragraph 12 ATG revised paragraph 12 of the Agency Escrow Disbursement Agreement (ATG Form 4000) to add language that allows ATG to provide copies of documents to other parties involved in the transaction. Please start using the revised form immediately. The form is available in REsource in Print/Create Documents.

16 Agency Escrow Disbursement Agreement Revised Paragraph 12 The undersigned hereby authorizes ATG and/or its agents and representatives to provide copies of any documents in connection with this transaction, including Settlement Statements that contain nonpublic personal information, to other parties involved in the transaction, including and not limited to sellers, buyers, borrowers, real estate licensees, lenders, mortgage brokers, title agents, and attorneys for any of the above parties.

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19 Agency/Escrow Disbursement Agreement ATG Form Seminar Title

20 Agency/Escrow Disbursement Agreement ATG Form Seminar Title

21 Who should receive copies of the forms? The borrower and buyer s attorney should be given a copy of the signed Lender CDF and signed ALTA Settlement Statement. The seller and seller s attorney should be given a copy of the Seller CDF and ALTA Settlement Statement. The lender should receive their original signed CDF back in their package along with a copy of the ALTA Settlement Statement and Seller CDF. Realtors should receive a copy of the ALTA Settlement Statement. Keep copies of all forms.

22 Post Closing Questions Are creditors required to provide corrected Closing Disclosure Forms if terms or costs change after consummation? Yes, in some circumstances. Creditors must provide a corrected Closing Disclosure Form if an event in connection with the settlement occurs during the 30 calendar day period after consummation that causes the Closing Disclosure Form to become inaccurate and results in a change to an amount paid by the consumer from what was previously disclosed. When a post-consummation event requires a corrected Closing Disclosure Form, the creditor must deliver or place in the mail a corrected Closing Disclosure Form not later than 30 calendar days a after receiving information sufficient to establish that such an event has occurred.

23 Post Closing Questions When a post-consummation event requires a corrected Closing Disclosure Form, the creditor must deliver or place in the mail a corrected Closing Disclosure Form not later than 30 calendar days a after receiving information sufficient to establish that such an event has occurred.

24 Post Closing Questions Is a corrected Closing Disclosure required if a post-consummation event affects an amount paid by the seller? Yes, in some circumstances. Settlement agents must provide a revised Closing Disclosure Form if an event related to the settlement occurs during the 30-day period after consummation that causes the Closing Disclosure Form to become inaccurate and results in a change to an amount actually paid by the seller from what was previously disclosed. The settlement agent must deliver or place in the mail a corrected Closing Disclosure Form not later than 30 calendar days after receiving information sufficient to establish that such an event has occurred.

25 Post Closing Questions Are clerical errors discovered after consummation subject to the re-disclosure obligation? Yes. Creditors also must provide a revised Closing Disclosure Form to correct non-numerical clerical errors and document refunds for tolerance violations no later than 60 calendar days after consummation.

26 Post Closing Questions Do creditors need to provide corrected Closing Disclosure Forms when they refund money to cure tolerance violations? Yes. If the creditor cures a tolerance violation by providing a refund to the consumer, the creditor must deliver or place in the mail a corrected Closing Disclosure Form that reflects the refund no later than 60 calendar days after consummation. If ATG discovers a discrepancy on the CDF after closing, please notify the lender and the lender should instruct the title provider accordingly.

27 Closing Disclosure Form and Check Writing ATG REsource creates all deposits and checks from the Closing Disclosure Form (CDF) and calculates the proper splits between the member and ATG. To accomplish this, the ATG premiums are pulled from Edit Services to Check Writing. It is required that all items selected in Edit Services, and any updates, are manually entered on the Closing Disclosure Form. Users will continue to enter all title-related charges manually on the CDF.

28 Check Writing Procedure After creating a file, with typical buyer, seller, lender, property, sales price, loan amount, and down payment: Open Services and add additional items, such as endorsements or recording fees, with the understanding that none of these items will populate the CDF; all items must be entered manually. Open the CDF and enter all title- and closing-related items, lender charges, payoffs, miscellaneous charges, tax prorations, and other credits.

29 Check Writing Procedure Do not use the Premium dialog button. The Payee for policies, endorsements, and closing fees (only if member is closing) should be the member. The Payee for Closing Protection Letters (CPL), State regulatory fee, ATG Independent Closer fee, or other ATG fees should be 15387, ATG Fees and Transfers.

30 Check Writing Procedure Open Check Writing. Click the CDF/HUD/CSS Exists button. Select CDF. NOTE: Currently the default pulls from the HUD.

31 Check Writing Procedure Deposits and checks will automatically be created. If not, click the green Plus button (Create Receipts and Disbursements). All existing functionality in Check Writing remains the same. If no deposits have been posted, Check Writing will continue to automatically update if changes are made on the CDF. However, if a deposit has been posted and a change has been made to the CDF, you must click the green Plus button to recreate deposits and checks (same functionality as usual).

32 Check Writing Procedure If a CDF is not required for a transaction, you may use either the 2010 HUD (three pages) or the HUD (two pages). Edit Services and Check Writing will continue to work as usual with both HUDs. Select the CDF/HUD/CSS Exists button and select HUD. Please contact the ATG Helpdesk at atgresource@atgf.com or with any questions you may have.

33 Thank you for attending today s ATG Legal Education seminar. Earn Your CLE with ATG Legal Education For a list of ATG Legal Education programs, visit