Topic: Title Insurance
-
Can lenders require borrowers to use particular title insurers?
—
by
For consumer mortgage loans secured by the borrower’s principal residence, Illinois law prohibits lenders from requiring borrowers to use a particular title insurance company. The Title Insurance Act prohibits lenders from requiring a party to a contract for the sale of residential real property to use a particular title insurance company or agent. 215 ILCS…
-
Under the HOEPA points and fees test, do we need to include title company fees if we have a title company affiliate, even if we use that company only for our commercial closings?
—
by
No. We believe you would have to include affiliate title company charges in the points and fees calculation only if you used your affiliate for that particular loan. The HOEPA regulations permit you to exclude any “bona fide third-party charge not retained by the creditor, loan originator, or an affiliate of either.” 12 CFR 1026.32(b)(1)(i)(D).…
-
Is there anything in Illinois law that would prohibit a bank from charging a title insurance review or inspection fee to a commercial loan borrower?
—
by
In general, the answer is no. Under Illinois law, there are very few limitations on fees that banks can charge, whether on commercial or consumer loans. Section 5e of the Banking Act states that “[n]otwithstanding the provisions of any other law in connection with extensions of credit” banks may charge any “interest, fees, and other…
-
Should we include in the finance charge calculation a $3 fee charged by our title company for “State of Illinois registration”? What about an “erecording” fee passed on by our title company?
—
by
We believe that the title registration fee required by Illinois law should be excluded from the finance charge calculation, as with other title insurance fees. For mortgage transactions, Regulation Z excludes “fees for title examination, abstract of title, title insurance, property survey, and similar purposes” from the “finance charge” definition. 12 CFR 1026.4(c)(7)(i). In our…
-
One of our title policies lists the homeowners as “John Doe and Jane Doe in joint tenancy.” However, the mortgage lists them as “John Doe and Jane Doe husband and wife.” Do we need to amend the mortgage or the title policy?
—
by
Based on our discussion of this issue with an attorney for a title insurance company, we do not believe that a slight discrepancy between a title insurance policy and the corresponding mortgage (for example, John and Jane joint tenancy versus John and Jane husband and wife) would affect your coverage under the title insurance policy.…
-
On our list of “preferred providers,” we list a national title company, but use only one specific office location. Does the 10% tolerance limit apply if a customer selects a different office that is connected with the same national title company?
—
by
Whether the 10% tolerance will apply to the charges of a title insurance company depends on whether the customer-selected title insurance company should be treated as the same company as the “settlement service provider identified by the loan originator.” 12 CFR 1024.7(e)(2)(ii). We presented this question to the CFPB, and their guidance was as follows:…
-
Some title companies in our area have begun filing “certificates of release” on our mortgages when our customers refinance or sell their homes. Our bank has always complied with the Illinois Mortgage Act and filed a release of our lien with the county recorder within thirty days after a mortgage has been paid off. Is there anything we can do to prevent this practice?
—
by
The short answer is yes. Include a statement similar to the following in big, bold letters in all of your payoff letters: “Notice to All Persons: _______ (“Lender”) objects to the filing of a “Certificate of Release” pursuant to the Mortgage Certificate of Release Act in relation to any and all mortgage liens held by…