On June 9, 2020, the Consumer Financial Protection Bureau (CFPB) published four new TRID FAQ’s and a TRID Factsheet. The Factsheet provide examples, such as on page 7 that addresses a situation in which there is a simultaneous issuance owner’s and lender’s title insurance and the seller will pay the full cost of the owner’s premium.Because of the CFPB disclosure approach, the cost of the owner’s title insurance premium is disclosed at an amount that is less than the actual cost, so the result is that there is a left over amount of the seller credit that needs to be applied so that the borrower actually receives the full benefit of the seller payment.The Factsheet provides that the leftover credit can be disclosed in one of three ways:

 

 
1. Shown as a credit towards the amount of the lender’s premium or any other title insurance costs for premiums or endorsements in the Loan Costs Table or Other Costs Table (12 CFR §§ 1026.38(f) and (g)); or

 

 
2. Added to and shown in aggregate with other seller credits in the Summaries of Transactions tables as a general Seller Credit (12 CFR § 1026.38(k)(2)(vii)); or

 

 
3. Disclosed as a stand-alone seller credit on another blank line in the Summaries of Transactions tables (12 CFR § 1026.38(k)(2)(viii)).

 

 
Therefore, the CFPB approaches force a splitting of the seller payment for the owner’s title insurance premium between the owner’s title policy and one of options noted above.
 
CLICK HERE to read more of Rich Andreano's commentary.
 
CLICK HERE for the Factsheet on Title Insurance Disclosures.
 
CLICK HERE for the Updated FAQs.