Saturday, January 30, 2010

using an itemization of line #1101 for HUD prep

If you are not already using your own form, consider creating one.  It has made the process so much easier and maybe that is why I am enjoying prepping these new HUDs.

Here's how I do it.  As you know, we are doing our first PRELIM at the time we issue the title commitment, so at that time I have in hand the GFE with the provider list.

First I post all the GFE data in the system.  When I post the title services figure, I check the list to see if our company is on there.  Our software has a box that is checked if yes.  So, I either leave a check mark in there if our name is on the list or I remove the check mark if it is not.

After posting the GFE data, I go into the HUD form.  At this stage I know alot about the transaction and so I build as much of the HUD as possible .  I want the lender to get as much of a picture as possible as early as possible so they can think through issues.

When I get to the title services section, I pull our itemization form and work through the premiums and services we are providing.

Since PA is a simultaneous issue state, first I write down the owner coverage and the loan coverage.  If the owner coverage is higher, I calculate the two premiums, figure the difference and that figure goes on line 1103.

Our form has all of our standard fee/service categories on it, so I just go down the line and fill in what we need to charge for the transaction.  This would include things such as doc prep, wire, courier, out of office settlement, tax certifications/lien letters, premium, endorsements, etc.  I then run a total on the list.

Next I add the title premium to the endorsements and calculate the underwriter portion.  That figure goes on the HUD.

If a payee is other than my company, I like to separate it out on the HUD so I'll put those items on the extra lines in the 1100 section.

The loan policy part of the premium is added to the endorsements and placed in its spot on the HUD.

Our software has a calculator for the premiums which used to work on the old HUD but seems too goofy to me on the new HUD so I do the premium calculations manually and insert the figures myself.  It's faster than monkeying around and I am sure they are right.

Finally, any other charges payable to my company including reimbursement for lien letters, if applicable, get lumped together into a settlement fee.

After that I add together 1101 and 1103 and compare it to my itemization sheet total.  If it doesn't match then I recheck all the figures.  The itemization sheet should match the total of those two HUD lines.

We have found that lenders really appreciate getting this itemization form.

When we do the final HUD for closing, we include a final itemization for the borrower and lender as part of the closing package.  The borrower initials that form for our records and since we operate under TIRBOP rules in PA, we have a record that we disclosed our fees and services according to TIRBOP.  I feel this is important because the RESPA 2010 HUD  doesn't conform to TIRBOP guidelines.


TitleEd said...

What production software do you use?


Diane Cipa said...

We use Displaysoft and I love it.

Dan Coleman said...

Is the lender obligated to provide the title company with the entire GFE?

Diane Cipa said...

In my opinion, no, but we've taken the position that we want the entire GFE before we issue the title commitment. We are taking this stance to control our work flow and an effort to avoid last minute complications.