On June 9, 2020, the CFPB released a Factsheet on TRID Title Insurance Disclosures and FAQs on lender credits on the total of payments disclosure, the optional signature line, and separating consumer and seller information. The Factsheet explains how to disclose title insurance on the Loan Estimate and Closing Disclosure, including when a negative owner’s title insurance cost disclosure is appropriate. Examples of the disclosure methods are also provided for each of the following scenarios.
The guidance clarifies lender’s title insurance is disclosed as the amount of the premium on the Loan Estimate. The amount can be disclosed as “Title – Premium for Lender’s Coverage,” or any similar language as long as it clearly indicates the amount of the premium disclosed and that the premium is for the lender’s title insurance coverage. On the Closing Disclosure, the cost of lender’s title insurance is disclosed in the Loan Costs Table under either Services Borrower Did Not Shop For or Services Borrower Did Shop For, depending on whether the consumer did or did not shop for the lender’s title insurance, and have a similar label.
With regard to owner’s title insurance, if the consumer obtains owner’s title insurance and the creditor does not require it, the cost of owner’s title insurance is disclosed in Closing Cost Details in the Other Costs Table on the Loan Estimate and Closing Disclosure. For the Loan Estimate, the cost disclosed for the owner’s title insurance policy is not based on any “enhanced” title insurance policy rate, unless the creditor knows or has reason to believe at the time the creditor is issuing the Loan Estimate that an “enhanced” owner’s title insurance policy will be purchased, such as if it is required by the real estate sales contract. When the consumer purchases owner’s title insurance and it is not required by the creditor, this fact is noted on the Loan Estimate and Closing Disclosure through use of the term “optional”. If the seller pays for the owner’s title insurance, the “(optional)” description is not required on the Closing Disclosure. The guidance also addresses Disclosure of simultaneous title insurance on the Loan Estimate and Closing Disclosure.
The CFPB also updated the TRID FAQs to include guidance on the total of payments disclosure, using the optional signature line on the Loan Estimate and Closing Disclosure, and the requirement to include seller information on the consumer’s disclosures if providing separate Closing Disclosures. The questions and answers pertain to compliance with the TILA-RESPA Integrated Disclosure Rule as they relate to the following topics:
- Corrected closing disclosures and the three business-day waiting period before consummation
- Model forms
- Construction loan
- Providing Loan Estimates to Consumer
- Providing Closing Disclosures to Consumers
- Lender credits
- Total of payments
- Optional Signature Line
The Factsheet can found [here] and TRID FAQ [here].
