5/3/2015. Title Premium Quoting Under the TILA-RESPA ID Rule. Quoting Requirements. Providing the Quote

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1 Title Premium Quoting Under the TILA-RESPA ID Rule LEGAL ADVICE OR OTHER EXPERT ASSISTANCE IS REQUIRED TO PREPARE MORTGAGE DISCLOSURES, AND THE SERVICE OF A COMPETENT PROFESSIONAL SHOULD BE SOUGHT BY AGENTS AND ANY OTHER THIRD PARTIES. FIRST AMERICAN EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES THAT AGENTS OR THIRD PARTIES USE OF THE INFORMATION PRESENTED WILL SATISFY ANY STATUTORY OR REGULATORY OBLIGATIONS, OR WILL ASSIST WITH, GUARANTEE OR OTHERWISE ENSURE COMPLIANCE WITH ANY APPLICABLE LAWS OR REGULATIONS, INCLUDING BUT NOT LIMITED TO THE LEGALITY OR PROPRIETY OF THE USE OF THE INFORMATION IN ANY GEOGRAPHIC AREA, THE GRAMM-LEACH-BLILEY ACT OF 1999, THE SARBANES-OXLEY ACT OF 2002, OR OTHER FEDERAL OR STATE STATUTES OR REGULATIONS. AGENT AND THIRD PARTIES ARE SOLELY RESPONSIBLE FOR ENSURING THAT THEIR USE OF THE INFORMATION PRESENTED IS IN ACCORDANCE WITH APPLICABLE LAW. IT IS THE AGENTS AND THIRD PARTIES RESPONSIBILITY TO REVIEW CHANGES IN LAWS, REGULATIONS AND ACCOUNTING PRACTICES THAT AFFECT THEIR BUSINESS. Quoting Requirements Providing the Quote Loan and owner s policy premiums quoted separately Simultaneous issue pricing - special formula to be used 1

2 Timeliness & Accuracy of Quotes Lenders Must comply with delivery time limits Will expect timely quotes Understand lender expectations Zero tolerance category expanded Required service provider Affiliates Methods of Quote Delivery Use of lender s platform Lender s form completed First American technologies Settlement Agent form Preparing to Quote 2

3 Included in Quote Title Insurance premiums Owner policy Lender policy Endorsements Escrow/Closing Fees Recording fees Mortgage tax Government fees Transfer tax if paid by consumer Information Gathering Loan purpose Refinance Purchase Construction Home Equity Sale price Loan amount Title policy type(s) Endorsements Property type and location Matters affecting title rate Matters affecting settlement fees Calculating Premiums 3

4 Quoting the Title Insurance Premium Title Insurance and Closing Services must be labeled beginning with Title Owner s title insurance must include (optional) at the end when borrower paid Basic Owner s Rate default Enhanced Owner s Rate may be quoted Required by the Contract If known to lender when issuing the Loan Estimate Simultaneous Issue States Simultaneous Issue States Loan policy premium disclosed without adjustment for simultaneous issue Full Loan premium based on Loan Amount Owner s premium equals: Full Owner s premium plus Simultaneous Loan rate less Full Loan premium 4

5 Disclosed Premiums Required CFPB calculations Actual Premiums State Insurance Regulator rates Owner/Loan Policy Pricing 1. Calculate Actual Premium Full Owner s + Simo Loan Policy $1, = 2, Calculate Loan Policy Alone 1, Disclosed: Loan Premium $1, Owner s Policy $ Simultaneous Pays By Custom or By Contract / Owner s Disclosed on LE $1, $ $1, $ LE / Title Loan Policy $1,500 $200 LE / Title Owner s Policy (Optional) $600 $1,900 Total Premium $2,100 $2,100 CD / Title Loan Policy $1,500 CD / Title Owner s Policy $600 Total Premium $2,100 Required Adjustments $1,300 +$1,300 $0 $0 Adjusted Premiums $200 $1,900 $200 $1,900 5

6 Pays/Owner s on LE $2, $ $1, $ LE Title / Title Loan Policy $1,700 $250 LE Title / Title Owner s Policy (Optional) $650 $2,100 Total Premium $2,350 $2,350 CD / Title Loan Policy $1,700 CD / Title Owner s Policy $650 Total Premium $2,350 Required Adjustments $1,450 +$1,450 Adjusted Premiums $250 $2,100 $0 $0 $250 $2,100 Simultaneous Pays By Custom or By Contract / Owner s NOT Disclosed on LE $1, $ $1, $ LE / Title Loan Policy $1,500 $200 LE / Title Owner s Policy (Optional) $1,900 Total Premium $1,500 $2,100 CD / Title Loan Policy $1,500 CD / Title Owner s Policy $600 Total Premium $2,100 Required Adjustments $1,300 +$1,300 $0 $0 Adjusted Premiums $200 $1,900 $200 $1,900 Pays/Owner s NOT on LE $2, $ $1, $ LE / Title Loan Policy $1,700 $250 LE / Title Owner s Policy (Optional) $2,100 Total Premium $1,700 $2,350 CD / Title Loan Policy $1,700 CD / Title Owner s Policy $650 Total Premium $2,350 Required Adjustments $1,450 +$1,450 Adjusted Premiums $250 $2,100 $0 $0 $250 $2,100 6

7 Simultaneous Pays Basic OP; Pays Enhanced OP & LP + By Custom or By Contract / Increase for Enhanced Owners Owner s Disclosed on LE $1, $ $ $1, $ LE / Title Loan Policy $1,500 $200 LE / Title Owner s Policy (Optional) $900 $300 $1,900 Total Premium $2,400 $2,400 CD / Title Loan Policy $1,500 CD / Title Owner s Policy $600 CD/ Title Enhanced Owner s (Optional) $300 Total Premium $2,400 Required Adjustments $1,300 +$1,300 $0 $0 Adjusted Premiums $500 $1,900 $500 $1,900 Pays Basic OP; Pays Enhanced OP & LP Owner s Disclosed on LE Owner s Disclosed on LE LE Title Loan Policy LE Title Owner s Policy (Optional) Total Premium CD/ Title Loan Policy CD/ Title Owner s Policy CD / Title Enhanced Owner s (Optional) Total Premium Required Adjustments Adjusted Premiums + Increase for Enhanced Owners $2, $ $ $1, $ $1,700 $250 $950 $300 $2,100 $2,650 $2,650 $1,700 $650 $300 $2,650 $1,450 +$1,450 $0 $0 $550 $2,100 $550 $2,100 Thank you! This presentation is for informational purposes only and is not and may not be construed as legal advice. First American is not a law firm and does not offer legal services of any kind. No third-party entity may rely upon anything contained herein when making legal and/or other determinations regarding title practices. You should consult with an attorney prior to embarking upon any specific course of action. 7