FLTA Survey- Loan Closing Instructions

We have become aware of lenders sending out loan closing instructions that could result in additional liability for the agent or are otherwise problematic.  We would like to hear your experience with loan closing instructions since TRID went into effect.  Responses are anonymous. 

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* 1. Generally speaking, how far in advance of closing are you receiving your loan closing instructions?

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* 2. When you receive “master” loan closing instructions, are they transaction specific or are they general and meant to apply to all subsequent transactions with the lender?

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* 3. Do you generally receive notice when a particular lender updates its master closing instructions?

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* 4. If you do receive notice of master updated closing instructions, how is this notice provided?

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* 5. Are lenders requiring your agency to pay/absorb fees that were not initially reflected on the preliminary closing disclosure? Example: Doc stamps increase because of the addition of a 2d title holder/co-borrower not contemplated at the outset of the file.

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* 6. If you answered “yes” to No. 5 above, estimate how much your agency has paid out since October 3, 2015.

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* 7. Have you received loan closing instructions that require you as the agent to agree to provide affirmative coverage for matters regardless of your underwriter’s guidelines or coverage that exceeds your underwriter’s guidelines? For example, in a condo transaction, lender requires you to affirmatively insure that the unit does not encroach on another unit or any of the common areas or facilities?

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* 8. Have you received loan closing instructions that demand you waive fees, costs and/or title premiums or has the lender demanded that you agree to provide future work such as issuing endorsements upon any future assignment of the mortgage at no charge?

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* 9. Have you received loan closing instructions in which you, as the title agent, agree to indemnify the lender(s) for the lender(s)’ failure to comply with current regulations and/or statutory obligations such as matters under TRID or Truth-In-Lending?

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* 10. Have you received loan closing instructions where you are being asked to agree to comply with conditions that are impossible to accomplish? Example: Lender requires that the mortgage be printed only on legal size paper (recording requirements do not allow for legal size paper to be recorded).

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* 11. Have you received loan closing instructions that require you to render what could be seen as legal opinions or certifications which may be considered the unauthorized practice of law? For example, (addressing mineral rights) lender requires “a certification that the known facts do not import exercise, or impending exercise of such outstanding rights in such a manner as to materially alter the contour of the mortgaged property or impair its value or usefulness for its intended purposes, and generally that such outstanding rights are similar to those customarily acceptable to prudent lending institutions, informed buyer, and lending attorneys in the community.”

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* 12. Have you received loan closing instructions that purport to create an attorney/client relationship with your company or law firm? Example: Title Agent acknowledges that it represents and acts as attorneys and legal counselors for Lender, its subsidiaries and affiliates.

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* 13. When you receive closing instructions with the types of provisions asked about in this survey, how are you addressing them?

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* 14. If you have modified or attempted to modify closing instructions you deemed problematic, what percent of the time have the lender(s) allowed the instructions to be modified?

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* 15. In situations where you were unsuccessful in modifying the instructions, did you sign them anyway?

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* 16. How would you like to see our industry and/or the FLTA address problematic closing instructions?

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* 17. Please provide any other information you think may be helpful.