Tricks for disclosing "Settlement Agent" information on the Closing Disclosure
Seems so simple, but watch out for these issues.
The debates between closing attorneys (not responsible for mistakes) and the closing department (responsible for disclosing Closing Disclosure accurately) rage on.
There are some legitimate gripes - like how Dodd Frank expanded the scope of fees that need to be disclosed. (From all fees imposed on the consumer by the lender to all fees that "arise in the context of the mortgage loan settlement" - no matter who pays them and no matter who imposes those fees.) But, of course that's not our fault ...
Or, "Why do I need to submit a preliminary Closing Disclosure to you 10 days before closing, you haven't even cleared the loan to close!"
No doubt these struggles will continue. But sometimes the devil's in the details - right now we're seeing debates between closing department and closing attorney over small details. Details that shouldn't be subject to debate. Details that shouldn't be causing so much of a problem!
Here are a few rules to follow in regard to filling out Settlement Agent contact information on the Closing Disclosure
Settlement Agent: Page 1
Under Closing Information on page 1, this should be the firm's name - not the individual attorney.
File #: Page 1
Yes, the File # needs to be filled out on every loan involving a settlement agent. The closing attorney has to give you this because it's the closing attorney's own filing number, whatever that happens to be (sometimes that's just the borrower's last name!, and even that's okay).
Settlement Agent's Contact Information: Page 5
This is where several issues collide. Let's go through them all, rapid fire! (refer to image below as we go)
The "Name" of the Settlement Agent should be the law firm name, not the individual lawyer.
The "ST License ID" will be the license number for the law firm, not the individual lawyer. If none, that will be blank. For example, Rhode Island issues license numbers to limited liability law firms, but not other law firms.
The "Contact" will be the individual closing attorney. It will not be the paralegal, even if the paralegal is doing most of the work and is the primary contact. What if you're working with a large law firm that doesn't know which attorney will close the loan? That's just too bad ... the firm will have to decide in time for you to disclose the loan.
The "Contact ST License ID" will be the individual attorney's law license number - not the ALTA number or any other number authorizing them to issue title insurance. In Rhode Island, this is a "bar number." In Massachusetts, this is a "board of bar overseers number" (BBO #). You should be able to rely on the attorney to provide this number. In some jurisdictions (such as Rhode Island), the license number is not publicly disclosed - the government will not release that number to you (the Supreme Court Clerk's office will tell you whether they're active if you submit a request). In others, such as Massachusetts, a lender can just look up the attorney's license number on the internet.
The "Email" and "Phone" can be the law firm, paralegal, or wherever else the closing attorney can be reached - it does not have to be the closing attorney's personal e-mail or cell phone.
So that's it in a nutshell. Now go back to fighting with attorneys over more important things!
In Other News:
In its 5th installment (now issued monthly), the CFPB's complaint report put a "spotlight" on Connecticut and Bank Account/Service issues. Pretty interesting that the CFPB processed 23,300 complaints in October 2015 alone. For lenders operating in Connecticut, take note that 30% of all Connecticut complaints came from Hartford
Has TRID actually sped up closings? (Comment made by Dave Stevens in interview available here). I'm not sold - I think the key qualifier in that interview is that "[s]ome smaller lenders" are struggling.
Not to overdose on CFPB news, but remember Dodd Frank's focus on diversity and inclusion standards? News is that the "CFPB has been asking entities it supervises about how they incorporate sexual orientation and gender identity into their policies, procedures, and fair lending analyses."
Infographic on how sleep affects the brain.
Poor Malia and Sasha ... Obama's Turkey dad jokes
Recruiting loan officers? Join the crowd. Shrinking margins, heavy recruiting, high turnover - it's a challenge to recruit quality sales officers. And when you do attract someone, can you count on them to stay long-term? Recruiting is especially difficult at the end of the year (right before bonuses vest). Advertisements, good pay, strong back room support - you'll need all those things. But you may need to get creative. What about compensating your current loan officers for recruiting? After all, they are salespeople. How would you do this, and is it compliant? You could structure this any number of ways - a flat referral fee per hire or per interview. Say $1,000 for every loan officer ultimately hired. Some lenders also pay the referring originator a percentage of the recruit's production - say 5 bps on overall production for the first 12 months. Any compliance concerns? Nope. I'd make sure to update your LO Compensation Agreements (remember that everything paid to originators should be in writing somewhere). Other than that, there's nothing wrong with paying a referral fee to attract recruits.
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- Clare Short
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