The Consumer Financial Protection Bureau released a factsheet on how to disclose title insurance on the Loan Estimate and Closing Disclosure. This includes when a negative owner’s title insurance cost disclosure is appropriate.
Among other things, it explains how to disclose simultaneous title insurance on the Loan Estimate and Closing Disclosure.
“The bureau has a formula to assist lenders in disclosing the required rates consistently, in a way that does not depend on whether the consumer purchases the owner’s and lender’s title insurance policies individually, or obtains the policies from the same company and gets the simultaneous rate, or buys only the required lender’s title insurance. If the consumer obtains only the required lender’s title insurance policy, and no owner’s title insurance policy, the use of this formula by the creditor is not necessary,” the factsheet states.
It also acknowledges the differences between state disclosures and TRID disclosure requirements for simultaneous rates.
“The disclosure of lender’s and owner’s title insurance on the TRID disclosures may differ from disclosures on state forms in some states when the consumer purchases policies from the same title insurance company and obtains a ‘simultaneous’ rate. As stated above, when the consumer obtains a simultaneous rate, the cost disclosed on the TRID disclosures for the lender’s title insurance is the full lender’s premium, not the simultaneous rate. Instead, the cost of owner’s title insurance is disclosed using the following formula: ((full owner’s policy premium) + (the simultaneous premium for the lender’s policy, i.e., simultaneous amount)) – (full lender’s premium),” the factsheet states.
“ALTA has long advocated for a more streamlined and understandable approach to disclose the cost of title insurance for consumers. We will continue work with the Bureau to further our common goal of helping educate consumers in this area," said Diane Tomb, ALTA CEO.