Source: https://info.idsdoc.com/Compliance/November15
Timestamp: 2018-12-11 08:34:18
Document Index: 747105441

Matched Legal Cases: ['§ 1026', '§ 1026', '§ 1026', '§ 1026', 'art 1024', '§ 1026', '§ 1026', '§ 1026', '§ 1026']

IDS | November15
Can “recording fees” be disclosed on a separate line from “transfer taxes” on the LE/CD?
This topic is currently the FAQ that has been voted on the most times as a helpful response in the Resources FAQ section for TRID:
There is a separate line dedicated to each of these fee types in section “E. TAXES AND OTHER GOVERNMENT FEES” on page 2 of the LE/CD.
1026.37(g)(1)
TAXES AND OTHER GOVERNMENT FEES. Under the subheading “Taxes and Other Government Fees,” the amounts to be paid to State and local governments for taxes and other government fees, and the subtotal of all such amounts, as follows:
1. On the first line, the sum of all recording fees and other government fees and taxes, except for transfer taxes paid by the consumer and disclosed pursuant to paragraph (g)(1)(ii)of this section, labeled “Recording Fees and Other Taxes.”
2. On the second line, the sum of all transfer taxes paid by the consumer, labeled “Transfer Taxes.”
3. If an amount required to be disclosed by this paragraph (g)(1)is not charged to the consumer, the amount disclosed on the applicable line required by this paragraph (g)(1) must be blank.
There are other FAQs regarding recording fees, including why all recording fees are aggregated into one line on the LE/CD, which is also why there is not “paid to” information for recording fees. Although, the CD does show the amounts dedicated to “mortgage” and “deed” out of the sum of all the recording fees. Type “recording” in the search bar on the FAQ page.
Why doesn’t the aggregate adjustment for the escrow account show up on the Loan Estimate?
§ 1026.37(g)(3) of the rule states the following in Official Interpretation-2, which excludes the aggregate adjustment from the LE:
AGGREGATE ESCROW ACCOUNT CALCULATION. The aggregate escrow account adjustment required under § 1026.38(g)(3) and 12 CFR 1024.17(d)(2) is not included on the Loan Estimate under § 1026.37(g)(3). [Emphasis added]
However, the aggregate adjustment is accounted for on the CD, as follows, § 1026.38(g)(3), Official Interpretation-2:
AGGREGATE ACCOUNTING.The method used to determine the aggregate adjustment for the purposes of establishing the escrow account is described in 12 CFR 1024.17(d)(2). Examples of this calculation methodology can be found in appendix E to 12 CFR part 1024. The aggregate adjustment, as illustrated by form H-25 of appendix H to this part, is disclosed as the last listed item in the amounts disclosed under § 1026.38(g)(3). [Emphasis added]
How does the disclosure of recording fees differ between the Loan Estimate and the Closing Disclosure?
IDS Compliance has been asked several times why recording fees are not itemized out on the Loan Estimate and Closing Disclosures. The following clarification comes from the CFPB Response from Webinar dated 11/18/2014:
Well, the Loan Estimate requires the sum of all recording fees to be disclosed as one item. The provision for that is found at § 1026.37(g)(1)(i). The Closing Disclosure also requires the recording fees to be disclosed as one item, but also requires that the amount paid to record the deed and mortgage be itemized separately. The itemized recording fee for the deed and the mortgage should only include the amounts needed to record each of those documents. Recording fees associated with any other documents, except for the deed and the mortgage, are just included as part of the total recording fees and are not separately itemized. See, § 1026.38(g)(1)(i). Please note that the total recording fees are allocated between the consumer, seller and others in the applicable column pursuant to the agreement among those parties. [Emphasis added; highlighted parts correspond with the pictures below].
Even though recording fees are summed together on the LE/CD and disclosed as one item, they are still itemized out in the idsDoc System. This gives the idsDoc System the ability to recognize the amounts that are related to recording a deed vs. a mortgage and properly display this information on the CD. Here’s an example of how the data entry in the idsDoc System corresponds with the requirements outlined in the rule and clarified by the CFPB’s webinar:
The data entry above results in the following compliant disclosures:
For additional information on this subject, please see the FAQ: How does the disclosure of recording fees differ between the Loan Estimate and the Closing Disclosure? on the Resources site.
What fee types go into each of the Good Faith tolerance categories, post TRID?
IDS Compliance has this simple breakdown from the rule:
Good Faith tolerances are referred to in the TRID rule as “variations,” but many in the industry are referring to them as “variances.”
The following list shows the types of fees that make up each category, per § 1026.19(e)(3):
0% Variance Category
Fees paid to affiliate of creditor or mortgage broker
Fees paid for services for which consumer not permitted to shop
10% Variance Category
Fees paid for 3rd-party services consumer permitted to shop for
Amounts placed into escrow
Fees paid to 3rd-party service providers selected by consumer not on list provided by creditor
Fees paid for 3rd-party services not required by creditor. These fees may be paid to affiliates.
So, which fee types fit into a stricter bucket than they did prior to TRID?
Here’s what the preamble to the TRID rule states on this topic:
Similar to existing law, the final rule restricts the circumstances in which consumers can be required to pay more for settlement services – the various services required to complete a loan, such as appraisals, inspections, etc. – than the amount stated on their Loan Estimate form.
Unless an exception applies, charges for the following services cannot increase: (1) the creditor’s or mortgage broker’s charges for its own services; (2) charges for services provided by an affiliate of the creditor or mortgage broker; and (3) charges for services for which the creditor or mortgage broker does not permit the consumer to shop. Charges for other services can increase, but generally not by more than 10 percent, unless an exception applies. The exceptions include, for example, situations when: (1) the consumer asks for a change; (2) the consumer chooses a service provider that was not identified by the creditor; (3) information provided at application was inaccurate or becomes inaccurate; or (4) the Loan Estimate expires. When an exception applies, the creditor generally must provide an updated Loan Estimate form within three business days.
This write-up also appears as an FAQ: What fee types appear in each Good Faith “tolerance” category?