Four Important C's Covered at TRID Forum

by Hilda Avila, RBJ Sales Manager

COMMUNICATION ● COLLABORATION ● CONSUMMATION ● CLOSING

Lexie (RBJ’s Integrated Closing Disclosure guru) and I attended the TILA RESPA Integrated Disclosure (TRID) Forum on January 29 in Los Angeles. The forum was a joint effort of American Land Title Association (ALTA) and Mortgage Bankers Association (MBA) – Los Angeles being the first of five scheduled throughout the nation. The theme repeated throughout the day was communication and collaboration, in particular between escrow/settlement and the lender. The Consumer Financial Protection Bureau’s (CFPB) meaning of consummation and California escrow/settlement practitioner’s definition of closing provided for some lively discussion.

A series of panelists presented six different topics: 1) Latest from the CFPB, 2) Getting from Pre-Application to Loan Estimate, 3) The Rule’s Implications for Closing Settlement, 4) Helping Your Operations Complete the New Forms, 5) Using Technology to Collaborate and Solve Compliance Problems, and 6) Changing the Real Estate Transaction.

What a collection of knowledge, experience, diversity and professionalism in the room!

Spanning from overview to detail about the Loan Estimate and Closing Disclosure, the rule, the form, and the “how-tos”, the forum was rich with information. I’m not going into that detail here, (RBJ will conduct webinars for our clients on use of the form in RBJ’s software, and industry organizations – such as EIC and CEA – will hold seminars and workshops as the year progresses) but rather just sharing some of my takeaways:

I’m glad I don’t work in Software/IT for lenders.

Lenders are still finalizing their systems.

A lot happens on the lender’s side leading up to issuing a Loan Estimate (ever heard of a “non-linear borrower”? And how about “versioning”?).

It’s CRITICAL that there is early and ongoing communication between escrow/settlement and the lender. This means NOW – to know what they are planning, if they will produce the borrower’s Integrated Closing Disclosure, and how they expect to communicate and share information (numbers) with the settlement agent.

Not only must there be good, open communication between escrow/settlement and lender, but collaboration is critical too. Collaboration to make the process as easy, smooth and efficient as possible. Particularly in terms of sharing the disclosure data.

Bring agents into the discussion now. Communicate with the agents you work with. Share information about the upcoming industry changes, the new forms, and make sure they realize how the rule’s waiting periods, delivery and receipt timelines can impact the transaction and the timing of consummation and closing.

Consummation is the day the borrower is obligated to pay. Under California state law, that is the date of signing (loan documents). We know of course that in California this is very different than the “Closing” or “Recording” date. Important to note the rules regarding delivery and receipt are with respect to the consummation date.

The CD can be hand delivered, sent via courier/express mail, electronically sent (must comply with E-Sign requirements), or sent via U.S. Postal Service. Did you know there was a “Mailbox Rule”? If put in the mail, the CD is presumed received three business days after being placed in the mail.

The simultaneous policy issue rate concern is not going away. Borrower’s charge for the lender’s policy will still need to be shown at the full rate (not the discounted simultaneous issue rate), and then a debit/credit between the Seller and Borrower needs to be done to reflect the actual charge.

The effective date of August 1, 2015 is soon approaching. Lenders and escrow/settlement companies/operations must be engaged in timely, active and concrete discussion, planning, implementing, and upgrading of their processes and software now. If your vendor is not able to show you a working (not theoretical, virtual, vapor, power point or story board) software solution now, consider looking for another provider.

Happy to say RBJ Software is already updating clients with the Integrated Closing Disclosure! See it, use it, learn it, get comfortable with it – it’s the real deal!

Lexie and I shared the day with many familiar faces, including current clients and other industry associates. It is always great to take part in an informative, educational event with those we work with. When we discuss, digest, and more importantly, see if we all heard the same thing and came away with the same understanding.

Moderators and panelists included talent from ALTA, MBA, CFPB, CMBA, national underwriters, lenders, and other industry players. Nancy Silberberg, President of Altus Escrow, Inc. and 2015 President of Escrow Institute of California (EIC) was a panelist on Changing the Real Estate Transaction. Juliana Tu of Viva Escrow!, Inc., in San Marino (and 2015 Board member of EIC, CEA, AEA and past President of EASGV) was a panelist on The Rule’s Implications for Closing Settlement.

If you’re not a member of these industry groups, I strongly recommend you join. Just consider the caliber of knowledge and insight you’ll have the opportunity to hear from and connect with!

 

RBJ Software, Inc. is an independently owned company, providing software, services and solutions to the Escrow/Settlement industry since 1984. RBJ has successfully completed a SSAE 16 SOC 1, Type 1 and Type 2 audit.

More on Notary Changes

by Cynthia Belzl, RBJ  VP and Operations Officer

My October 7, 2014 blog post covered the specifics of the new notary disclosure effective in 2015. The National Notary Association posted articles providing additional information in the Notary Bulletin that might be helpful.

One appeared in December, 2014, “Five Things You Need to Know about the New CA Certificate Wording.”

The other in January, 2015, “What Business Need to Know about the CA Certificate Wording.”

Q&A RBJ Webinar on SSAE 16

With more than 100 attendees, RBJ recently held a webinar to explain and discuss SSAE 16 and how it relates to compliancy requirements in the escrow/settlement industry.

Jim Jimenez and Tom Roncevich, partners of SSAE 16 Professionals, LLP, a CPA firm specializing in SSAE 16, provided an overview of the SSAE 16 audit process and explained how it aligns with CFPB’s regulatory requirements, ALTA’s Best Practices and EIC’s Model Policy and Procedures.

Hilda Avila, with RBJ marketing, commented on the event.

“We all know there is concern in the industry about these new regulatory requirements, and our webinar helped address those questions and help the SSAE 16 audits to seem less complicated and confusing,” she said. “It was well received, we had many follow up questions, and received lots of good feedback from various attendees.”

RBJ Software, Inc. completed the audit and achieved a SSAE 16 (SOC 1), Type 1 and Type 2. The SSAE 16 is a Statement on Standards for Attestation No. 16, which was developed by the Auditing Standards Board of the American Institute of Certified Public Accountants (AICPA).

Two New Laws Impact Escrow Industry

by Cynthia Belzl, RBJ VP and Operations Officer

Two new laws go into effect January 1, 2015. The first involves added wording    to notarized documents and the other deals with documentary transfer tax disclosure requirements.

Wording Attempts to Clarify Notaries’ Guarantee

Signed into law August 15, 2014, California Senate Bill 1050 requires the following specific consumer disclosure, enclosed within a box, be added to all certificates of acknowledgment, proofs of execution of an instrument and jurats:

“A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.”

For more details visit:

http://www.nationalnotary.org/knowledge-center/news/law-updates/ca-senate-bill-1050

Documentary Transfer Tax is Out in the Open

Also effective January 1, 2015, the amount of documentary transfer tax due and the location of the property will be required to be shown on the face of all recorded documents that are transferring property. This is as result of California Assembly Bill 1888 that was signed into law on June 4, 2014.

In essence, this law deletes the wording that allows the amount of tax due, upon request, to be shown on a separate paper and affixed by the recorder after the permanent record is made.

From the Legislative Counsel’s Digest:

“The Documentary Transfer Tax Act authorizes the board of supervisors of a county or city and county to impose a tax with respect to specified instruments that transfer specified interests in real property. The act requires the amount of tax due and the location of the property to show on the face of the document, and if the party submitting the document for recordation requests, that the amount of tax due be shown on a separate paper affixed to the document. The act prohibits the recorder from recording any deed, instrument, or writing subject to the tax, unless paid at the time of recording, and requires a signed declaration of the amount of tax due on the face of the document or on a separate paper as provided by the act.

This bill would delete the requirement that, upon request, the amount of tax due be shown on a separate paper affixed to the document, and would make a conforming change to the signed declaration requirement.”

For the specific changes to Sections 11932 and 11933 of the Revenue and Taxation Codes, please visit:

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB1888&search_keywords=

To view the deleted wording from Section 11932 visit:

http://legiscan.com/CA/text/AB1888/id/963921

RBJ Edge Means Escrow Security

 

Restricted User Access

Will prevent direct user access by keeping all data on a physical remote server and using Advantage Database Server to access the data.

 

Permissions

Will use database roles and assign user and group permissions to fine-tune levels of access that users can have.

 

Require Logins

Will force all connections to authenticate through the database.

 

Encrypted Communications

Encryption of communications between the client and server application with Transport Layer Security (TLS).

 

FIPS Mode (if required)

Enable FIPS mode to ensure that only encryption algorithms approved for the Federal Information Processing Standard (FIPS) 140-2 are used. With an additional cost.

 

Encrypted Data Files and Documents

All tables and Documents in Electronic Folder (EF), will be encrypted at the database level.

RBJ Leads the Way with Compliance and Security

By Cynthia Belzl, RBJ VP and Operations Officer.

RBJ Software is an independently owned & operated settlement and title software development company working with escrow and title companies of all sizes for 30 years. This allows a smaller company to take advantage of technology that puts them on equal standing with larger competitors.

RBJ executive staffers are constantly attending seminars, workshops and industry-related association meetings to not only keep their software current, but to keep you abreast of changes in compliance, state-wide rules & regulations, and topics that will make your business safer and run smoother.

In mid-August, Hilda Avila, our Sales Manager from RBJ, and I attended a seminar produced by The Escrow Training Institute (ETI), a leading provider of escrow training in Southern California. The speakers were Jennifer Felten, Esq. and Michael Haas, CPA who both provided a wealth of information. The topics covered regulatory changes in our industry such as the CFPB Closing Disclosure ruling, ALTA’s Best Practices, and EIC’s Model Policy & Procedures. Some of the topics discussed at the recent ETI seminar are as follows:

 

CFPB Disclosure Ruling

The CFPB has posted a Disclosure comparison at: http://www.consumerfinance.gov/knowbeforeyouowe/compare/

As you know, mortgages can be complex transactions. Since consumers currently receive different, but overlapping, federal disclosure forms with the terms and costs of mortgage loans, Congress directed the CFPB to create new forms. The CFPB requires lending and closing companies to adopt these new forms effective August 1, 2015. The web page (link above) shows the before and after comparisons of the Truth in Lending (TIL) Disclosure + Good Faith Estimate forms, and the new Loan Estimate forms.

Please also refer to this document from the CFPB, “Final Rule on Simplified and Improved Mortgage Disclosures

Another CFPB reference is titled,  “What the New Simplified Mortgage Disclosures Mean for Consumers”

As we near the implementation date for the new Closing Disclosures, RBJ will take an active role in preparing its customers for the proper usage of the Closing Disclosure.

For your reference, please review the “TILA-RESPA Integrated Disclosure rule implementation”.  This page has many resources that could be valuable to you.

 

Marriage Rules

California SB 1306 Amends Statutory Marriage Rules to clarify that laws relating to marriage and the rights and responsibilities of spouses apply equally to opposite-sex and same-sex spouses.

The new law is “marriage is a personal relationship arising out of a civil contract between 2 persons.” Also, references to “husband” and “wife” in the Family Code have been revised to “spouse.” The new bill says that California will recognize any marriage that was legally consummated under the rules of any other state.

 

Vesting Best Practices

Attendees were reminded at the recent ETI seminar to obtain vesting instructions, however, do not recommend vesting to your clients. RBJ automatically updated its vesting instructions form to reflect the current law regarding marriage.

 

“Encryption” Stands For Security

RBJ has developed new software ready to be released. It offers complete encryption for documents and data at rest and in transit using Advanced Encryption Standard (AES 256) and file transfer security using Transport Layer Security (TLS). These new encryption methods will assist you to safeguard your clients’ personal information.

For current RBJ clients, we will be announcing the roll-out of this new software and allow you to review its new design and features. We will be contacting you in the near future, so watch for our communications. Put “support@rbj.com” in your favorites list.


RBJ Software has been serving the escrow and title industry with state of the art software engineering for 30 years. Please visit our website regularly for industry related information and announcements about our improved software updates. RBJ is well known in the industry for providing exceptional customer care, personal service, and technical support.

This blog is coming to you from RBJ Software, the premier software development company for the settlement and title industries.

We take our customer care very seriously.

Sincerely,

 

Cynthia Belzl, Vice President

Operations Officer

(626) 357-9725

support@rbj.com

www.rbj.com

Following the Changes

SECURITY.  Perhaps one of the most widely heard words in the Settlement industry lately.  Together with compliance, CFPB, Closing Disclosure, NPI, cyberfraud, clean desk policy, and vetting – the industry lingo evolves as do your business and operational concerns.

Just last month, RBJ employees attended a number of CEA Regional and Escrow Institute of California (EIC) dinner/education meetings and learned more about Federal activity regarding the CFPB and third-party service providers, Lender compliance with the new rules, legal aspects of escrow, and much more.

In March we’ll be attending ALTA’s Business Strategies Conference in Nashville.  Some of the educational sessions we’ll be attending include those on ALTA’s Best Practices, handling NPI (non-public, private information), CFPB Mortgage Disclosure Rule, the Closing Disclosure, and identity fraud.  We’ll be sure to share our insights and takeaways with you.

The Bluebird Café and Country Music Hall of Fame are on the conference agenda too – let’s see if we get to mix a little fun with all that education!