Escrow Workflow – 12 Steps to Closing with the TRID Forms

On December 21, 2015   /   Blog, Escrow  

As we all know, the Closing Process has changed since the enactment of the new TRID rule. And with the implementation of new forms, lenders and settlement agents work together to determine a workflow for the completion and delivery of the Closing Disclosure during the closing process. Below is one example that illustrates the process and shows which items the Lender typically performs and which items Escrow typically performs.

Download

CFPB Escrow Workflow

Download a PDF of the CFPB Escrow Workflow here.

Who Completes the Closing Disclosure?

Lenders and settlement agents may agree to divide responsibilities with regard to completing the Closing Disclosure with the settlement agent assuming responsibility to complete some or all of the Closing Disclosure.

Who Delivers the Closing Disclosure?

The rule makes the lender responsible for ensuring that the consumer receives the Closing Disclosure. Lenders may work with the settlement agent to have them deliver the Closing Disclosure to consumers on their behalf.

Typical Escrow Workflow:

PERFORMED BY LENDER

PERFORMED BY TICOR TITLE

Open Order

Lender will send order request through Real EC to the Ticor Title Escrow unit. The Escrow unit will open the escrow and request title report and order any payoffs required.

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  2

Confirmation of Order and Preliminary Report

A confirmation is sent to the lender that the escrow order is opened and the preliminary report will be uploaded to Real EC.

Documents Request

A CPL, fee quote, wiring instructions and any other documents that are requested by the lender will be uploaded to RealEC.

 3  
  4

Closing Disclosure Preparation

Upon delivery of lender’s instructions, the escrow unit will prepare the closing disclosure and upload to Real EC for lender review and approval.

Delivery of Closing Disclosure

The Lender or escrow unit will prepare and deliver the closing disclosure to the borrowers as instructed and within the timeframe as required by the lender.

 5

Delivery of Closing Disclosure

The Lender or escrow unit will prepare and deliver the closing disclosure to the borrowers as instructed and within the timeframe as required by the lender.

Closing Instructions and Loan Documents

Lender will prepare Closing Instructions and Loan Documents and send to escrow unit through Real EC.

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Signing / Consummation

Once received, escrow will schedule an appointment with the borrowers to sign the loan documents upon the expiration of the disclosure period.
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Loan Documents to Lender

The escrow unit will return executed loan documents and provide any outstanding conditions through Real EC that are required for the lender to provide funding authorization.

Funding Requirements

Lender provides additional funding requirements to Ticor Title Escrow & Escrow provides requirements to Lender.

 9  

Lender Funds

Lender sends funds to Ticor Title Escrow unit.

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Recordation

Once the wire is received from the lender, the escrow will record the Deed of Trust and any additional required documents with the County Recorder’s office. ~ The original recorded documents will be uploaded to Real EC and sent to the lender as required.
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Final Title Policy

The title company will send the final title policy to the lender as per their lender’s instructions.
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Ticor Title Expands to Spokane Valley

On October 30, 2015   /   Blog, Escrow  
Ticor Title Spokane Valley

Ticor Title Spokane ValleyWe are pleased to announce the opening of our new Spokane Valley Operation and that Mick Templeton AVP / Branch Manager / Escrow Closer, Melody Sarff, Escrow Assitant, and Tricia Osterholm, Escrow Assistant have joined our Spokane Ticor Team and will staff our new office.

Mick and his team have been serving the real estate community in the Spokane Valley area for many years as an independent escrow operation.

Please join us in congratulating the new members of our team!

Mick-Templeton-150
Mick Templeton
AVP/Branch Manager/
Escrow Closer
Melody-Sarff-150
Melody Sarff
Escrow Assistant
Tricia-Osterholm-150
Tricia Osterholm
Escrow Assistant

Where to find us

16201 E Indiana Avenue, Suite 3300
Spokane Valley, WA 99216
(509) 928-9665

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Owner’s Premium & Simultaneous Issue Discount – Under the New CFPB Rules

On September 29, 2015   /   Blog, Escrow  

owners premium simultaneous issue

OP&SI_Discount_Ticor-150Download Owner’s Premium & Simultaneous Issue Discount Article Here

If a buyer opts not to purchase an owner’s policy, in most states they would not receive the benefit of a simultaneous issue discount applied to the loan policy premium. Currently, in a typical residential transaction, a lender quotes the discounted rate on a Loan Estimate.

However, any increase in this premium would result in a tolerance violation or increased annual percentage rate. Therefore, the CFPB wrote into the new rules any simultaneous issue discount must be applied to the owner’s policy premium and not the loan policy premium.

Therefore, when the new CFPB rules are implemented, the lender will need to disclose the full lender’s policy premium on the Loan Estimate and the preparer of the Closing Disclosure will charge the full loan premium. The new formula for calculating the owner’s premium with the simultaneous issue discount applied is as follows:

Owner’s Premium
+ Simultaneous Issue Rate
– Full Loan Premium
= Owner’s Rate

The new calculation method applies regardless of which party to the transaction is paying the owner’s policy premium. For example, the premiums on the purchase of a $300,000 residence with a $240,000 loan closed simultaneously with actual premiums are as follows:

Owner’s Policy Premium $1,090
Loan Policy Premium (Full Rate) $ 928
Loan Policy Premium (Simultaneous Issue Rate) $ 469

On a transaction closed prior to the effective date of the new rules the seller would pay $1,090 and the buyer would pay $469. On the same transaction closed after the effective date of the new rules the disclosure would reflect the seller paying the calculated premium of $631 and the buyer paying the full loan premium of $928.

The title provider will still receive all the total premium dollars due to them. However, the seller ends up paying $459 less than obligated and the buyer ends up paying $459 more than obligated.

OP&SI_Discount_Ticor

The only way the formula works is if one of the parties to the transaction is paying both policy premiums, which in most markets is not customary. As a result, our systems have been designed to provide an off–setting debit to the seller for the balance of the owner’s premium and an offsetting credit for the same to the buyer.

The disclosure amounts, and off–setting debits and credits only appear when the Closing Disclosure is printed using the Company’s escrow production systems. Any other document, such as a closing statement or fee ticket, will print the premium dollars in the normal fashion.

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Ticor Title Welcomes John Bloomquist as VP/Area Sales Manager!

On September 17, 2015   /   Blog  

We are pleased to announce that John Bloomquist has joined the Ticor team as Vice President/Area Sales Manager and will be overseeing a sales team in Snohomish County and North King County.

John brings a proven track record of success and excellent customer service.

A Word to Clients

John Bloomquist

“I made this move confident that it will be mutually beneficial. I will continue to show you the same commitment and dedication that I have always shown, with the added benefit of exceptional preparation for the TRID changes and the backing of a truly progressive Fortune 500 company.”

-John Bloomquist

Why Ticor Title was the Right Choice

John chose Ticor Title because of the unique mix of services that Ticor provides:

  • TRID/CFPB Readiness
  • Nationwide Coverage, Including 19 Counties in WA State
  • “Make it Happen” Underwriting
  • Extremely Competitive Fees
  • Regional Lending Centers
  • Forward-Thinking Agent Tools

Contact John Bloomquist

Effective immediately, you may contact John at his new TICOR TITLE phone and email below:

John Bloomquist
206.305.1335
john.bloomquist@ticortitle.com
To set up orders: waorders@ticortitle.com
For customer service needs: cs.wa@ticortitle.com

Read more...

Please join us in welcoming John to our Ticor Family!

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Announcing the Ticor Title TRID Wheel

On September 10, 2015   /   Blog, Escrow  
TRID Wheel

The Ticor Title TRID Wheel is the only wheel that instantly determines earliest Consummation Date!

TRID Wheel to determine Consummation Date
Based on the new CFPB rule that goes into effect beginning Oct. 3, 2015, this carefully crafted and well planned TRID Wheel is designed to eliminate the guesswork in determining earliest Consummation Date.

Use the wheel to:

• Instantly determine earliest Consummation Date
• Estimate required closing days by working backwards on the wheel

Reserve Yours Today!

Contact your Ticor Title representative to reserve your Ticor Title TRID Wheel today. Supplies are limited.

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Announcing the Relocation of Ticor’s Gig Harbor Office

On September 9, 2015   /   Blog, Escrow  
Gig Harbor Escrow - Ticor Title

Gig Harbor Escrow - Ticor Title
We are very pleased to announce that Ticor’s Gig Harbor Escrow office has relocated to an updated and more spacious location just a few doors down from the previous location.

The move is part of our plan involving the expansion of our Gig Harbor team and provides a freshly updated space with additional room to accommodate client signings, added escrow staff, and a dedicated Property Information Specialist.

We think you’ll love the upscale look & feel, accessibility, ample parking, easy access to highway 16, and our team of experienced professionals.

Where to find us:

Ticor Title
Gig Harbor Escrow Location

New address:
5775 Soundview Drive, Ste 204B
Gig Harbor, WA 98335

Phone: 253-858-2999
Fax: 253-858-3171

[WRG id=6241]
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How the CFPB Three-Day Waiting Period Works

On August 27, 2015   /   Blog, Escrow  


In addition to the delivery period we discussed in our previous video, lenders must ensure the borrower receives the Closing Disclosure no later than three business days before consummation. This is referred to as a waiting period.

Three Business-Day Waiting Period

The CFPB final rule requires the lender to give the borrower three business days to thoroughly review the Closing Disclosure to enable them to compare the charges to the loan estimate and ensure the cost and loan program they are obtaining are as expected. In our previous video, we explained the waiting period begins on the day the Closing Disclosure is sent. It does not start the next business day!

Waiting Period Example

Closing Disclosure Timeline - CFPB

If the Closing Disclosure is delivered by mail, email, courier or fax on a Monday, it is assumed that the delivery period expires on Wednesday at midnight. Then the waiting period begins, which means the loan may not be consummated less than three business days after the Closing Disclosure is received by the borrower.

The waiting period includes Thursday, Friday and Saturday, therefore the borrower would be able to sign on the next business day which is Monday, unless Monday is a federal holiday.

Exceptions to the Rule

If signing is scheduled during the waiting period, the lender must postpone signing unless closing within the waiting period is necessary to meet a bona fide personal financial emergency. Consumers may waive their right to receive the Closing Disclosure three days prior to consummation only if they have a bona fide personal financial emergency.

Bona fide personal financial emergencies are extremely rare and determining whether one exists is fact intensive. The only example provided by the CFPB is the imminent sale of the consumers’ homes through foreclosure, where the proceeds of the new mortgage can save the home from foreclosure, which isn’t very realistic.

Revisions to the Closing Disclosure

If there are changes to the loans APR, changes to the loan product, or a prepayment penalty is added to the loan after the Closing Disclosure has been delivered to the borrower, then the lender must ensure the Closing Disclosure is revised and a new delivery period and waiting period begins. For any other changes which occur before the consummation that do not include the three we just discussed, the lender must provide a corrected Closing Disclosure with any terms or cost that have changed and ensure the borrower receives it; there is no additional three business day waiting period required.

The lender must ensure only that the borrower receives the revised Closing Disclosure at or before consummation. There is no delivery or waiting period for the seller. The settlement agent must provide the seller its copy of the Closing Disclosure no later than the day of consummation.

Rescission

The rule did not make any changes to the existing rescission requirements under regulation Z. This means if the borrower is refinancing their existing loan, then the delivery, waiting, and three day right to resend applies. Keep in mind the rescission timeline is calculated differently than the delivery and waiting periods. The first day of the rescission period starts the day after all borrowers have received their notice of right to resend.

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How the TRID Closing Disclosure Delivery Period Works

On August 12, 2015   /   Blog, Escrow  


The new TRID rule has very strict requirements as to the delivery of the Closing Disclosure. The Closing Disclosure must be delivered to the borrower at least three business days prior to the consummation of the loan. If the Closing Disclosure is hand delivered, a waiting period commences which we’ll discuss further in a later post.

If the Closing Disclosure is delivered by mail, email, courier, or fax a delivery period of three business days precedes the waiting period. The delivery period does begin on the day the Closing Disclosure is sent. It does not start the next business day.

Delivery Example

Closing_Disclosure_Timing4-blue_03If the Closing Disclosure is delivered by mail, email, courier, or fax on a Monday it is assumed the delivery period expires on Wednesday at midnight.

Who Delivers the Closing Disclosure?

The rule makes the lender responsible for ensuring that the consumer receives the Closing Disclosure. Lenders may work with the settlement agent to have them deliver the Closing Disclosure to consumers on their behalf. Lenders and settlement agents also may agree to divide responsibilities with regard to completing the Closing Disclosure with the settlement agent assuming responsibility to complete some or all of the Closing Disclosure.

The lender must maintain communication with the settlement agent to ensure the Closing Disclosure and its delivery satisfy the requirements described above and the creditor is legally responsible for any errors or defects.

In the end, the CFPB will hold the lender responsible for ensuring the preparation and delivery of the Closing Disclosure is done properly regardless of who actually prepares the form and delivers it.

Wells Fargo Leads Industry

Wells Fargo led the industry by informing them of their intention to deliver the Closing Disclosure to the borrower. In September of 2014 they issued a statement which read:

Evidence of delivering the borrower’s Closing Disclosure with receipt at least three business days prior to closing are critical requirements for us. The data to support this must be readily accessible for internal and external audit. We considered many factors, such as the large number of settlement agents who close Wells Fargo loans in local markets, their closing volumes, limited integration capabilities to provide compliance data to us, and the evolving use of electronic delivery within the Wells Fargo loan process.

At this point in time, we believe that this critical compliance evidence can only be provided if Wells Fargo delivers the Closing Disclosure directly to our borrowers to meet the three-day requirement, including when a change occurs that requires the three-day clock to be restarted. We still must work closely with you to ensure we have accurate information on this disclosure, and because of the early collaboration needed, we are hopeful that this will create a smoother closing for everyone.

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Title Products & Rates – How they’re disclosed under the new TRID rule

On July 31, 2015   /   Blog, Escrow  


This video discusses how the charge for the lenders and owners title policy must be disclosed on the loan estimate and the closing disclosure.

Where is the discount applied on the Loan Estimate and Closing Disclosure?

Traditionally, when an owner’s title policy and a loan title policy are issued at the same time, insuring the same property, a discount is applied to the cost of the loan policy. In order to prevent an increase in the loan policy premium paid by the borrower in the event where borrower elected not to purchase an optional owners policy, the CFPB requires any simultaneous issued discount be applied to the owner’s policy premium and not the loan policy premium.

How is the discount disclosed?

The rule states any title insurance policy disclosed on the loan estimate and the closing disclosure must be disclosed by adding the simultaneous issue loan premium discount for the lenders title insurance coverage to the owner’s title insurance premium and then deduct the amount of a full premium rate for the lenders title insurance policy that would be charged in the transaction when the consumer declines the purchase of an owner’s policy.

Mathematically, it all works out if the borrower is paying for both the owners and lenders title policy. Because in the end, the borrower still plays the same.

What if the Seller pays for the Owners’ Title Policy?

In areas where the seller customarily pays for the owners’ title policy, the disclosure requirements on the loan estimate and closing disclosure end up costing the buyer more than they would customarily pay. Here’s why; if the seller agreed to pay for the owners title policy and the buyer agreed to pay for the lenders title policy, but the simultaneous issue discount being offered by the title company can only be applied to the owners title policy, then the seller realizes the benefit of the discount. Keeping in mind, the discount is only offered on the lenders title policy premium.

Here’s an example:

Sale price is $180,000, the buyer is obtaining a $162,000 loan towards the purchase of the property. The purchase and sale agreement states the seller has agreed to purchase an owners title policy for the benefit of the buyer. The full premiums for each policy are: owner’s policy premium $838, lenders policy premium, at full premium rate, $727. Remember, if the policies are issued simultaneously, the lenders policy would be less; it would be $360 which represents the charge for the lenders policy premium at the simultaneous issue rate. Keeping in mind the seller is the one who agreed per the sales agreement to pay the full premium amount for the owner’s title policy.

Here’s how it would compute:

Owners’ Title Premium   $838
Simultaneous Discount Off Loan Title Policy + $360
Full Loan Premium – $727
$471

Loan title policy charge on the loan estimate and the closing disclosure is $727 paid by the borrower. Owner’s title policy charge on the closing disclosure is $471, which represents the charge for the owner’s title policy less the simultaneous discount for the loan policy. $838 for the owner’s title premium plus $360 for the simultaneous discount off the loan title policy minus $727 for the full loan premium, the total is $471 paid by the seller. This means the seller needs to give the buyer a credit for $367, which represents the difference between the charge for the owners title policy less the simultaneous discount.

Full Loan Policy Premium   $727
Simultaneous Discount Off Loan Title Policy – $360
  $367

$727 full loan policy premium minus $360 equals $367.

In order to reconcile the charges to comply with the new rule and follow the written mutual instructions of the principles to the transaction as agreed to in the purchase and sale agreement, a debit from the borrower to the seller will have to be shown on the third page of the closing disclosure in the summaries of transactions section.

We have it covered

Don’t worry, all of the company systems are being updated, customers can still obtain accurate fee quotes which would be in compliance with the regulations using our website. Settlement agents’ production systems will be programmed to ensure the charges are disclosed properly and the purchase agreement is followed.

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8 Reasons Why Title Insurance is Worth the Cost [Video]

On July 9, 2015   /   Blog, Title Insurance  
Owners title insurance


When the CFPB wrote the new rule, they didn’t see the need for the cost of the owner’s title policy to be disclosed on the loan estimate if the borrower is not going to pay for it. The new rule only requires the lender to disclose the cost of the owner’s title policy on the Loan Estimate if the borrower will be paying for the policy.

Unfortunately, if the borrower is paying for it, the charge must be labeled as optional on both the loan estimate and closing disclosure. This is a concern because telling a consumer owners title insurance is optional may dissuade home buyers from purchasing the same protection their lender receives. Title insurance is an insurance product like no other. And protects the homeowner for as long as they own their home.

Here are 8 more reasons why title insurance is worth the cost.

  1. Title Insurance protects the interests of property owners and lenders against legitimate or false title claims by previous owners or lien holders. In effect it insures the investment, unlocking its potential as a financial asset for the owner.
  2. We access, assemble, and analyze title information, in addition to handling the escrow and closing process.
  3. Title problems are discovered in more than one-third of residential real estate transactions. These “defects” must be resolved prior to closing. The most common problems are existing liens, unpaid mortgages, and recording errors of names, addresses, or legal descriptions.
  4. An Owner’s Title Insurance Policy protests the owner for as long as he or she has an interest in the property; and the premium is paid only once, at closing.
  5. Title Insurance is different from other forms of insurance because it insures against events that occured before the policy is issued, as opposed to insuring against events in the future, as health, property or life insurance do. Title Insurance is loss prevention insurance.
  6. We rely on a search of existing records to identify possible defects in order to resolve them prior to issuing a policy. We perform intensive and expensive work up-front to minimize claims. The better we do this, the lower our number of claims.
  7. Researching titles may be extremely labor-intensive since only about 15 percent of public records are computerized. The industry invests a substantial amount of time and expense to collect and evaluate title records. As a result, the industry’s claims are low compared to other lines of insurance.
  8. Dollar-for-dollar, Title Insurance may be the best investment a property owner can make to protect their interest.

Share the Value

The CFPB believes the consumer should make a decision to obtain Owner’s Title Insurance coverage based on available information. So talk the talk. Tell your customers about the value of Title Insurance. Share with them these eight values. Direct them to the American Land Title Association website where they can learn more about the importance of an Owner’s Title Policy.

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