Bureau Publishes TILA-RESPA Integrated Disclosure Rule Guidance

Thoughtware Alert Jun 16, 2020
A hand on a calculator paying a bill

On June 9, 2020, the Consumer Financial Protection Bureau (Bureau) issued TILA-RESPA Integrated Disclosure (TRID) guidance in the form of a fact sheet pertaining to the reporting of lender’s title insurance and owner’s title insurance on the Loan Estimate and Closing Disclosure. The document, titled “Factsheet: TRID Title Insurance Disclosures,” details the proper reporting of lender’s and owner’s title insurance for different scenarios. 

The fact sheet provides guidance regarding when a consumer obtains lender’s and owner’s title insurance policies from the same title insurance company and obtains a simultaneous rate:

  • The TRID disclosure for lender’s title insurance should be reported as the full lender’s premium, not the simultaneous rate
  • The TRID disclosure for owner’s title insurance should be calculated as (full owner’s policy premium + simultaneous premium for lender’s premium) − full lender’s premium

Examples are given for each of the three scenarios:

  • Lender’s title insurance with no owner’s title insurance
  • Lender’s and owner’s title insurance without a simultaneous rate 
  • Lender’s and owner’s title insurance with simultaneous rate 

In the event the seller agrees to pay the full amount of the owner’s title insurance premium and the disclosed seller credit is greater than the disclosed cost of the owner’s title insurance, the fact sheet lists three ways to report the credit on the Closing Disclosure:

  • Shown as a credit toward the amount of the lender’s premium or any other title insurance costs for premiums or endorsements in the Loan Costs Table or Other Costs Table
  • Added to and shown in aggregate with other seller credits in the Summaries of Transactions tables as a general seller credit
  • Disclosed as a standalone seller credit on another blank line in the Summaries of Transactions tables

The fact sheet cautions lenders that the amount disclosed for each individual policy from title insurance agents may differ from the individual policy amounts shown on the TRID disclosures depending on state law. Finally, the fact sheet clarifies that in the event of a negative owner’s title insurance amount, the Bureau recommends first checking the calculation to ensure the correct rates were used; however, in certain states where the full cost of lender’s title insurance by itself is more than the cost of both owner’s and lender’s title insurance combined, it would be correct to disclose a negative number. 

Read the full fact sheet now. 

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