Despite a Blow to its Authority, CFPB Seems to be Here to Stay

Cynthia Belzl, Operations Officer

Despite a blow to its authority and some added limitations, the Consumer Financial Protection Bureau (CFPB) seems to be here to stay.  On October 11, 2016, the United States Court of Appeals for the D.C. Circuit issued an opinion holding that the CFPB's structure is unconstitutional.  At the same time, the Court rejected a request to strike down the CFPB in its entirety and prevent it from operating.

Read about the decision and its implications:  

CFPB's Structure Ruled Unconstitutional but it Avoids Being Dismantled

CFPB Too Powerful: Federal Court Finds The Agency's Structure Is Unconstitutional

 

FinCEN Expands Geographic Targeting Order

Cynthia Belzl, Operations Officer

In the fight against money laundering and other financial crimes, The Financial Crimes Enforcement Network (FinCEN) has expanded the Geographic Targeting Order (“GTO”) which requires title companies to report information for Residential real estate transactions that meet certain criteria in the following five counties of California: Los AngelesSan DiegoSan FranciscoSan Mateo and Santa Clara. The Order is effective for transactions from August 28, 2016 to February 23, 2017.

Transactions covered under this Order are all-cash, residential transactions of $2,000,000 or more, purchased by an entity in those mentioned counties. If the transaction is a “Covered Transaction” then the filing of form 8300 is required.

  Please use the below link to read more information about this Order from FinCEN:

https://www.fincen.gov/news/news-releases/fincen-expands-reach-real-estate-geographic-targeting-orders-beyond-manhattan

Additional resources to assist you regarding the Order:

·         Select GTO Order to obtain a PDF of the Order

·         To assist Escrow Agents in determining if the transaction is a “Covered Transaction” click CHECKLIST

·         Click FORM 8300 to obtain a PDF of the form to be reported to FinCEN if the transaction is a “Covered Transaction”

Simultaneous Policy

Cynthia Belzl, Operations Officer

There has been so much confusion in the industry about the Simultaneous Policy issue. RBJ has posted a video explaining the reasoning behind the rule and how to accomplish the calculations in RBJ.

RBJ has also written a feature allowing users to key in the full owner’s policy premium as a seller’s debit and the concurrent lender’s rate premium as a buyer’s debit,  for the purposes of the Closing/Settlement Statements, but the software will do the necessary calculations to show the adjusted owner’s premium, full lenders premium and offset as needed to accommodate the rule.  RBJ will be releasing the “Title Policy Adjustment” feature within the next few weeks.

An article has been posted to Housingwire entitled “Here’s how TRID is reshaping title companies.”  The article may be geared towards title companies, but the effects of TRID it discusses pertain to escrow. Here is a short bit from the article related to the simultaneous policy issue.  The full article can be found here.

When asked about the biggest challenges in dealing with TRID, Erin Sheckler, president of NexTitle responded:

“One of the biggest obstacles is disclosing title premiums under the rules of the CFPB. Since the Loan Estimate is intended to mirror the Closing Disclosure Form (CDF), title and settlement service providers must be mindful of how rates and fees are initially conveyed to the Lender – accuracy is critical. Rate calculators and other quoting services need to be updated to ensure that rates are disclosed as required under the rule. The single biggest challenge so far has been the calculation method required by the CFPB. It creates the necessity to disclose inaccurate title premiums in states where the lender’s title insurance premium is reduced when purchased simultaneously with owner’s title insurance. In areas where it is common for the seller to pay for the owner’s title insurance, the “cash to close” disclosed on both the Loan Estimate and the CDF may require manipulation, as well as the “cash from/to the seller” amount on the Seller’s CDF. This has been an incredibly difficult concept to impart to both the settlement agents and the lender. It’s created confusion and inaccuracy despite the stated goal of the CFPB of increased transparency.”

RBJ Announces Integration with Closing Insight

by Hilda Avila, RBJ Sales Manager

RBJ Software, Inc. is pleased to announce integration of RBJ-Edge with RealEC® Technologies’ Closing Insight™ solution. RealEC Technologies (RealEC) is a division of Black Knight Financial Services.

RBJ-Edge is RBJ’s recently released Escrow/Settlement software. Written on a .net platform, RBJ-Edge includes Advanced Encryption Standards (AES 256) for an added level of security to aid in compliancy with the Consumer Financial Protection Bureau’s (CFPB’s) regulations.

Closing Insight is a suite of Web-based solutions, enabling integration of lender and settlement agent data that will streamline the reconciliation of fees for final loan closing disclosures between lenders and settlement agents. Using a client-configurable rules engine, lenders and settlement agents will have the ability to generate and review disclosure documents, which will help them meet loan-closing timeline requirements, and to electronically fulfill Title, Closing and Document Signing orders.

We are proud to be one of the few companies named by RealEC to be part of its Closing Insight Partner Network. A number of major lenders have announced they will use Closing Insight to interact with settlement providers. Taking full advantage of this integration option in RBJ-Edge, our clients will experience an easy, efficient, and single data entry electronic method of communicating with the lender for purposes of producing the Closing Disclosure. The analytics, update/change tracking and notation will keep all parties informed and in sync.

RealEC’s Closing Insight Settlement Agent registration will open on Wednesday, April 15, 2015. We would like to encourage settlement agents to register all office locations and users by May 31. RealEC’s Settlement Agent Registration will be available at www.ClosingInsight.com. During the registration process, settlement agents will be asked to provide basic company and user information, including company name and primary address, and software application utilized.

For additional information on Closing Insight including FAQ, transactional pricing and other important resources, please visit www.ClosingInsight.com

RBJ Software, Inc. is an independently owned company, providing software and services to the Escrow and Title settlement industry since 1984. Should you require further information specific to RBJ Software or RBJ-Edge, please contact the following representative:

Hilda Avila at 800.725.9725, or via email at hilda@rbj.com

Changes Coming

by Cynthia Belzl, RBJ VP and Operations Officer

There are changes coming that each escrow company must prepare for. We have already been discussing the Closing Disclosure, effective August 1, (and will continue to do so), but that’s not all. Many of our customers have been responsive to our encouragement of attending various webinars, classes, and conferences, but still, we are getting a lot of questions as to what it means to be CFPB compliant. The best advice we can give you is to get involved, get educated and get prepared.

To clarify, the CFPB is not mandating requirements of settlement companies. CFPB is regulating lenders and telling lenders that they are responsible for their service providers. With this in mind, you may be in a position to answer to lenders in order to be one of their settlement providers.

As a result, Escrow Institute of California (EIC) and American Land Title Association (ALTA) have created guidelines to help you address what the lenders may request.

EIC board members have done an exceptional job outlining best practices for the requirements of today. Here is a link to EIC’s Model Policies & Procedures document: http://www.escrowinstitute.org/2014/eic-model-policies-procedures/

To further help with your preparation, Jennifer Felten, Esq. was kind enough to share with me, and permit me to include in a recent RBJ email to our clients, her firm’s Escrow Policies and Procedures checklist.  Jennifer who was once an Escrow Officer/manager is now an attorney and principal of RELaw, APC. She is assisting escrow companies in these compliance matters. I am listing below four valuable resources for you as you work through these changes:

 

Jennifer Felten, Esq.

RELAW, APC

699 Hampshire Road, Suite 105

Westlake Village, CA 91361

Telephone: (805) 265-1031

Facsimile: (805) 265-1032

E-mail: jennifer@relawapc.com

Website: www.relawapc.com

 

Escrow Institute of California

Website: http://www.escrowinstitute.org/

ALTA’s website: http://www.alta.org/

CFPB’s website: http://www.consumerfinance.gov/

 

It is strongly encouraged for each settlement provider to get involved with an escrow association as the various associations are being proactive in educating its members.

This has been sent to only the contacts we have on record. Please forward to those who you feel would benefit from this information.

Note that RBJ will be holding another webinar regarding the Closing Disclosure. This one will be training on the form using RBJ Software. That will likely occur in May. Watch for the email notice that will be sent when the date is set!

Don’t be scared, be prepared!