Category: Title Insurance


Welcome to Florida: Buyer Pick or Seller Pick?

Here’s a little disclaimer Aaron M. Davis, CEO of Florida Agency Network, likes to give when speaking on title insurance in Florida.

“Florida, where a judgment can attach to a piece of property simply by filing a document with the clerk, and the name doesn’t even have to be spelled correctly.

Florida, where the county may or may not have to actually FILE an enforcement action on a property for it to attach, as long as they were thinking about doing it at some time.

Florida, where an unlicensed contractor can pull a permit on a house to put on a new roof, not close a permit, and 10 years later you have to hire a licensed contractor to go back, fix the prior’s work, and close the permit.

Florida, were the seller picks the title agent or attorney, and pays for title insurance, but only depending on the county you are in. Or, even depending on what PART of a county you’re in.”

Across the country, there are 37 states where the buyer picks/pays for title and 12 states where it’s customary for the seller to do so.

Then there’s Florida.

Where the Buyer picks in:

  • The Panhandle
  • Sometimes around the beach areas in Sarasota
  • South Manatee County (but only to the Manatee River, where North is customary for seller to pick)
  • Miami-Dade County
  • Broward County
  • Collier County
  • Some of Palm Beach County, but not North…..

Then, seller picks in the majority of the other areas…

HUH???

Title scholars, settlement experts, underwriting counsel, and others  who still say things like “HUD statements, policies in triplicate, dot matrix printers, and white out,” have contemplated WHY this occurs in Florida.

Well, Aaron has figured it out!  We can blame two men named Henry. (Of course, it’s a man’s fault.)

Henry Plant and Henry Flagler

These two gentlemen were railroad tycoons who ventured deep into Florida. The areas they ended up in became tourist destinations, with great beaches, water access, and lots of construction opportunities. Plant’s rail line landed in Sarasota, and Flagler’s line had a few stop down the East coast of Florida, landing in Palm Beach and Miami.

With all those tourists and construction came the attorneys who handled those transactions, several of who previously resided in New York. And in New York, you guessed it – it’s customary for the buyer to pick and pay for title.

As for coastal areas, well, those buyers are typically wealthy, so we guess they just get stuck with the bill.

Timeline > Consumer Financial Protection Bureau

Source: Timeline > Consumer Financial Protection Bureau

Timeline

Here’s a full timeline of how we created the Loan Estimate and Closing Disclosure forms, part of our Know Before You Owe: Mortgages project. It’s a look back at our effort to make mortgage disclosures simpler and more effective, with the input of the people who will actually use them.

You can also return to the main page to view an interactive timeline.


July 21, 2010

The Dodd-Frank Wall Street Reform and Consumer Protection Act is signed into law.

The new law required the CFPB to combine the Truth in Lending and Real Estate Settlement Procedures Act disclosures.


December 6, 2010

The Treasury Department hosts a mortgage disclosure symposium.

The event brought together consumer advocates, industry, marketers, and more to discuss CFPB implementation of the combined disclosures.


February 21, 2011

Design begins.

Starting with the legal requirements and the consumer in mind, we began sketching prototype forms for testing.

During this process, the team discussed preliminary issues and ideas about mortgage disclosures. This session set the context for the disclosures and was a starting point for their development. The team continued to develop these issues and ideas over more than a year during the development process.


May 18, 2011

Know Before You Owe opens online.

We posted the first two prototype loan estimates. We asked consumers and industry to examine them and tell us what worked and what didn’t. We repeated this process for several future rounds. Over the course of the next ten months, people submitted more than 27,000 comments.


May 19, 2011 – May 24, 2011

Qualitative testing begins in Baltimore.

We sat down with consumers, lenders, and brokers to examine the first set of loan estimate prototypes to test two different graphic design approaches.

Disclosures tested:

Prototype A
Prototype B


June 27, 2011 – July 1, 2011

Los Angeles, CA

Consumers and industry participants worked with prototypes with lump sum closing costs and prototypes with itemized closing costs.

Disclosures tested:

Prototype A
Prototype B


August 1, 2011 – August 3, 2011

Chicago, IL

Again, we asked testing participants to work with prototypes with lump sum closing costs and itemized closing costs.

Disclosures tested:

Prototype A
Prototype B


September 12, 2011 – September 14, 2011

Springfield, MA

Another round of closing cost tests, as we presented participants with one disclosure that had the two-column design from previous rounds and another that used new graphic presentations of the costs.

Disclosures tested:

Prototype A
Prototype B


October 17, 2011 – October 19, 2011

Albuquerque, NM

In this round, we presented closing costs in the itemized format and worked on a table that shows how payments change over time.

Disclosures tested:

Prototype A
Prototype B


November 8, 2011 – November 10, 2011

Des Moines, IA

We began testing closing disclosures. Both designs included HUD-1-style numbering for closing details, but two different ways of presenting other costs and Truth in Lending information.

Disclosures tested:

Prototype A
Prototype B


December 13, 2011 – December 15, 2011

Birmingham, AL

One form continued to use the HUD-1 style numbered closing cost details; the other was formatted more like the Loan Estimate, carrying over the Cash to Close table and no line numbers.

Disclosures tested:

Prototype A
Prototype B


January 24, 2012 – January 26, 2012

Philadelphia, PA

In this round, we settled on prototypes formatted like the Loan Estimate, but one included line numbers and the other didn’t. We also began testing the Loan Estimate with the Closing Disclosure.

Disclosures tested:

Prototype A
Prototype B
Prototype C


February 20, 2012 – February 23, 2012

Austin, TX

Participants reviewed one Loan Estimate and one Closing Disclosure (with line numbers) to see how well they worked together.

Disclosures tested:

Prototype A
Prototype B


February 21, 2012

We convene a small business review panel.

A panel of representatives from the CFPB, the Small Business Administration (SBA), and the Office of Management and Budget (OMB) considered the potential impact of the proposals under consideration on small businesses that will provide the mortgage disclosures.


March 6, 2012

We meet with small businesses.

The panel met with small businesses and asked for their feedback on the impacts of various proposals the CFPB is considering. This feedback is summarized in the panel’s report.
(Note: Link to large PDF file.)


March 26, 2012

Back to Baltimore!

We conducted one final round of testing to confirm that some modifications from the last round work for consumers.

Disclosures tested:

Prototype A
Prototype B
Prototype C


July 9, 2012

Proposal of the new rule.

The CFPB released a Notice of Proposed Rulemaking. The notice proposed a new rule to implement the combined mortgage disclosures and requested your comments on the proposal.


November 6, 2012

Comment period on most of the proposed rule closes.

Between the public comment period and other information for the record, the CFPB reviewed nearly 3,000 comments. These comments helped us improve the disclosures and the final rule.


October 11, 2012 – December 13, 2012

We test Spanish language versions of the disclosures across the country.

We conducted qualitative consumer testing on Spanish language versions of the proposed disclosures. We tested in three cities: Arlington, Va. (October 11-12); Phoenix, Az. (November 14-15); and Miami, Fla. (December 12-13).


April 23, 2013 – June 13, 2013

Validating our testing

With the help of Kleimann Communication Group, the contractor who helped us throughout the testing process, we conducted a quantitative study of the new forms with 858 consumers in 20 locations across the country. By nearly every measure, the study showed that the new forms offer a statistically significant improvement over the existing forms.


June 18, 2013 – July 26, 2013

Additional testing with modified disclosures

In response to comments, we developed and tested different versions of the disclosures for refinance loans, which we tested for three rounds. (In our last round, we tested a modification for both purchases and refinances.) We also did one more round of Spanish language testing for the refinance versions. The modified disclosures tested well and are the ones included in the final rule.


November 20, 2013

A final rule

The CFPB issues a Final Rule. The final rule creates new integrated mortgage disclosures and details the requirements for using them. The rule is effective for mortgage applications received starting August 1, 2015.


June 24, 2015

New Effective Date Proposed

The CFPB proposes a new effective date of October 3, 2015 for the Know Before You Owe mortgage disclosure rule.


July 21, 2015

New Effective Date Announced

The CFPB issues a final rule moving the effective date to October 3, 2015.


Can I Get a HUD?

After October 3, 2015 you will no longer be receiving a HUD-1 settlement statement before consummation of a closed-end credit transaction secured by real property.

Say what?!?!

That’s right, I just said consummation of a closed-end credit transaction and no more HUD. There is new jargon to go along with the new, easy-to-read, consumer friendly, disclosures.

Bon Voyage HUD!

After October 3, the ‘HUD’  will be called a ‘Closing Disclosure’ (CD). ‘Closing’ will be referred to as consummation and the ‘Good-Faith-Estimate’ (GFE) will be called a ‘Loan Estimate’.

Take a peek at the new disclosures!

www.closing-disclosure.com

Closing-Disclosure_Page_1 Closing-Disclosure_Page_2 Closing-Disclosure_Page_3 Closing-Disclosure_Page_4 Closing-Disclosure_Page_5


General Requirements for the Loan Estimate Disclosure Post TRID

Stay on top of your game by familiarizing yourself with the general requirements that are going change in regards to the Good-Faith Estimate when the new TILA-RESPA Integrated Disclosure (TRID) rule goes into effect.

First of all, it is no longer going to be called a Good-Faith Estimate but will then be identified as a Loan Estimate.

Guess what?!?!

The jargon isn’t the only thing that is changing! The new disclosure carries with it some timing deadlines as well as a new look and lay out to the forms used instead of the familiar GFE.

The creditor, formally known as the lender, is required to provide all consumers of closed-end transactions secured by real property with a good-faith estimate of credit costs and transaction terms.

Mortgage brokers or creditors may provide the Loan Estimate to the consumer when the mortgage broker receives the consumer’s completed application and must be provided no later than 3 business days after the completed application has been turned in.

This new TILA-RESPA form integrates and replaces the current RESPA GFE and the initial TIL for these transaction types. Creditors must issue a revised Loan Estimate only in situations where changed circumstances resulted in increased charges.

These general requirement changes are meant to help better inform, protect and serve the consumer. The Florida Agency Network is ready to guide the industry through these changes and looks forward to partnering with you to streamline the process.

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Schedule a Training Class

Max Jackson

Max@FLagency.net.


3 Things to Keep in Mind When Writing Contracts Post TRID

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The TILA-RESPA rule (TRID) is proposed to go into effect this year on October 3. Buyer’s Agents will need to be aware of 3 main things: what type of loan product their client is using to purchase, the expected closing date and if their title partner is approved to do business with their client’s lender of choice. This is especially true when it comes down to writing the contract.

Woman signing a paperNot all Transactions are Covered by the New Rule

Most closed-end consumer credit transactions that are secured by real property are covered by the new rule.

Certain types of loans that are currently subject to TILA but not RESPA are subject to the TRID rule as well, such as construction-only loans, loans secured by vacant land or by 25 or more acres and credit extended to specific trusts for estate planning purposes.

TRID will not cover HELOC’s, Reverse Mortgages or Chattel-dwelling loans. Other exemptions include loans that are made by a person or entity that makes five or fewer mortgages in a calendar year. In addition to, housing assistance loan programs for low- and moderate- income consumers are partially exempt.

It’s All About Timingtiming

The typical timeline of the closing process is going to change not only in the form of new documents and disclosures but on the operational side of things as well. It will take some time for the industry to adjust to these changes. Just after the rule goes into effect, it is recommended to add on an extra 15 days to the closing date when writing the contract. Eventually, as the industry adjusts, the forecast predicts this will move us to a more paperless environment resulting in an even quicker closing timeline of less than the typical 30 days in Florida.

HandshakeIs Your Title Partner Approved to do Business With Your Client’s Lender?

Security is the main issue in regards to compliance between Title Agencies and Lenders due to the obligation both parties must protect Non-Public Information (NPI) data that is exchanged during a transaction. Lenders cannot do business with agencies that do not have compliant software to protect NPI. Technology has a big role in securing data. In an effort to comply, Agencies in the Florida Agency Network use SoftPro to secure the communication of NPI. You can find SoftPro on the American Land and Title Association’s Elite List of 12 Providers that can assist with compliance.

It is best to work with a preferred title partner that is compliant to ensure the least amount of hicups at the closing table. FAN has multiple agencies in our network that are ready to take on these changes. To find an agency in the network near you visit www.flagency.net or contact Max@FLagency.net.

Check out what the CFPB has to say below or visit their site by clicking here:

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Specific Record Retention Requirements for the TILA-RESPA Rule

Blog Headerarchival-records-storageThere are specific record retention requirements of the closing disclosure for the TILA-RESPA rule. Do your lending partners comply?

The creditor must retain copies of the closing disclosure and all related documents for 5 years after consummation.

If the creditor sells, transfers or no longer has interest in the loan the creditor must provide a copy of the closing disclosure to the new servicer.

There is no specific requirement on how the copies must be retained leaving the opportunity to streamline our lives through technology.

You can take a closer look below or to view the CFPB’s Compliance guide here.

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The Florida Agency Network is an industry leader in compliance. All agencies in the Florida Agency Network are prepped and ready to take on this industry game changer. It is important for your title partner to be compliant with the TRID rule once it goes into effect.

To find out more about partnering with a title agency in the network contact:

Max Jackson

Max@FLagency.net

digital document storage


When is the CFPB going to Implement the TILA-RESPA Integrated Disclosure Rule?

As it stands now, the CFPB has proposed the TILA-RESPA Integrated Disclosure (TRID) implementation date be postponed until October 3. The rule is open for public comment until July 7, 2015 leaving the industry grasping for some much needed clarity until a final rule gets locked down.
According to the Congressional Review Act (CRA), before any major new rule goes into effect Congress and the Government Accountability Office (GAO) must receive a rule report. It must contain a copy of the rule and be received at least 60 days prior to the rule taking effect. The CFPB’s failure to turn in this two-page report to Congress on time is the reason for this much appreciated delay.

Stay tuned as we keep you up to date and don’t forget, the best way to prepare yourself is to join the conversation. In an ever changing industry it is important to partner up with a title agency that has aligned and complied with the new regulations. Agencies powered by the Florida Agency Network (FAN) are prepped and ready to lead the way during this immense industry change.

Find out more about partnering with an agency in the network:

Max Jackson

Max@FLagency.net


It’s Going Down in 99 Days!

Blog Header The TILA-RESPA rule goes into effect October 3 of this year. What transactions does it apply to? It applies to almost every closed-end consumer credit transaction secured by real property. Check out what the CFPB had to say below:

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In an industry that is constantly modifying it is important to partner with those who stay abreast of the changes. Title agencies that are in the Florida Agency Network (FAN) have been a part of the conversation and are ready to lead the industry through these changes. To find out more about partnering with an agency in the network contact: Max@FLagency.net

 Curious about compliance with the TILA-RESPA rule?

Check out the CFPB’s site.