Blog Post

CFPB Factsheet on Disclosure of Title Insurance Premiums

michaelchristians • June 9, 2020

On June 9th, the Consumer Financial Protection Bureau (CFPB) published guidance for financial institutions on how to properly disclose title insurance premiums under the Integrated Disclosure Rule (TRID). You can find the CFPB’s fact sheet here.

There are two common types of title insurance applicable to a residential real estate transaction. The first is lender’s title insurance, which protects the creditor in the event of a cloud on title. The second is owner’s title insurance, which protects the borrower in the event of a cloud on title. While creditors generally require a lender’s title insurance policy, the purchase of an owner’s title insurance policy is more often than not at the discretion of the borrower.

The cost associated with a lender’s title insurance policy is disclosed on both the Loan Estimate and the Closing Disclosure under Services Borrower Did/Did Not Shop For (as applicable) in the following manner:
Title – Premium for Lender’s Coverage

The cost associated with an optional owner’s title insurance policy is disclosed on both the Loan Estimate and the Closing Disclosure under Other Costs in the following manner:
Title – Owner’s Title Policy (Optional)

In some instances, a discounted rate is available if both a lender’s title insurance policy and an owner’s title insurance policy are issued simultaneously by the same title insurance company. The CFPB’s factsheet identifies the proper way to disclose such a simultaneous or single issue title insurance policy under TRID. The creditor should disclose the premium for the owner’s policy according to the following formula: (full owner’s policy premium + simultaneous lender’s policy premium) – full lender’s premium.

For example, assume that the premium associated with the owner’s policy is $2,568 and the title insurer will provide a simultaneous lender’s policy for an additional $200. If the policies were purchased separately, the lender’s policy would cost $1,175. The creditor should disclose the full amount of the lender’s policy premium as $1,175. The owner’s policy premium is calculated as follows: ($2,568 + $200) – $1,175 = $1,593.

Finally, the CFPB’s fact sheet provides that in some instances it may be permissible to disclose the owner’s policy premium as a negative number. If the full cost of the lender’s policy alone is more than the cost of the owner’s policy premium plus the simultaneous issue premium for the lender’s policy, then using the formula identified above the owner’s policy premium would be disclosed as a negative number.

Don’t hesitate to reach out to Michael Christians Consulting, LLC with any questions you may have!

The post CFPB Factsheet on Disclosure of Title Insurance Premiums appeared first on Michael Christians Consulting, LLC.

< Older Post Newer Post >

Share this post

Recent Blog Posts

NCUA Outlines Changes to Exam Scheduling Policy

By Michael Christians • February 12, 2025

In Letter to Credit Unions 25-CU-03 , the National Credit Union Administration (NCUA) announced its new exam scheduling policy. Effective January 1, 2025, federally insured credit unions (FICUs) will be examined according to the following schedule: 8 to 12 months following its last examination date FICUs with ANY of the following characteristics - A CAMELS rating of 3, 4, or 5, Considered less than well capitalized, An outstanding enforcement action, or Assets greater than or equal to $10 billion. FICUs with assets between $1 billion and $10 billion, and A CAMELS rating of 3, 4, or 5, or A change in CEO since its last examination. 12 to 16 months following its last examination date FICUs with assets between $1 billion and $10 billion, and A CAMELS rating of 1 or 2, and No change in CEO since its last examination. 14 to 18 months following its last examination date Federal credit unions (FCUs) not included above Once every 5 years Federally insured state-chartered credit unions (FISCUs) not included above The NCUA believes this revised schedule will allow it to better respond to emerging risks and priorities using available resources. It is important to note that nothing in the new schedule limits the NCUA's authority to examine any FICU as frequently as the agency deems necessary.

Eleventh Circuit Vacates New TCPA Prior Express Written Consent Requirements

By Michael Christians • January 29, 2025

Back in December 2023, the Federal Communications Commission (FCC) adopted a new rule amending the prior express written consent requirements under the Telephone Consumer Protection Act (TCPA). That rulemaking would have done a couple of things. First, it would have clarified that a consumer’s prior express written consent can apply to not more than one seller. In other words, the rule would have prevented a company from obtaining a consumer’s consent to the receipt of advertising and telemarketing messages both for itself as well as its affiliates. Second, the rule would have required that a consumer’s consent be logically and topically associated with the interaction that prompted the consent. That second requirement was particularly concerning for financial institutions. The language of the rulemaking seemed to suggest that an institution that captured prior express written consent at the time of account opening could not later rely on that same consent for purposes of sending advertising or telemarketing messages related to loans, credit cards, or other non-deposit products. The Insurance Marketing Coalition asked for a judicial review of the rulemaking at the Eleventh Circuit Court of Appeals. On January 24, 2025, that court vacated the new requirements. In its order, the court found that the FCC exceeded its statutory authority because the amendments to the definition of prior express written consent impermissibly conflicted with the statutory definition of the same term under the TCPA.

CFPB Reminds Institutions Payday Lending Rule Takes Effect March 30th

By Michael Christians • January 25, 2025

Following years of litigation, the Consumer Financial Protection Bureau’s 2017 payday lending rule will take effect on March 30, 2025. Three types of consumer loans are covered by the payday lending rule: Short-term loans that require repayment within 45 days, Longer term loans with a balloon payment, and Longer term loans for which the APR exceeds 36% and automatic payment is required from the consumer's account. Under the rule, covered lenders will have to adhere to both payment restrictions and notice requirements. First, when two consecutive automatic payment attempts have failed in connection with a covered loan, the lender is prohibited from attempting another withdrawal until it has obtained a new and specific authorization from the consumer. Second, the rule imposes the following notice requirements in connection with a covered loan: Written notice before the lender attempts to withdraw the first automatic payment from the consumer's account, Written notice before a subsequent automatic payment attempt that will differ in amount or effective date, and Written notice when two consecutive payment attempts have failed. Lenders that do not originate more than 2,500 covered loans in a calendar year are exempt from the rule’s requirements. Additional implementation resources regarding the payday lending rule are available from the CFPB here .

Address

5438 South Prairie View Drive

West Des Moines, IA 50266

Phone

319-325-1171

Email

michael@mchristiansconsulting.com

Sitemap

Michael Christians Consulting, LLC

This website has been built to be accessible for all users. If you experience any difficulty in accessing this website, please contact us for assistance.

Client Login