Bulletin: SLS2015017

Date:
December 03, 2015
To:
All Issuing Offices
RE:
UNDERWRITING - Private Lender and Seller Financing Transactions

Dear Associates:

A private lender or seller financier is a “creditor” under TILA-RESPA Integrated Mortgage Disclosure (“TRID”) and must follow the forms, the timing and the delivery requirements of TRID if the private lender or seller financier extends or makes more than five mortgages in a calendar year. See 12 CFR §1026.2(a)(17). We strongly encourage you to carefully consider these transactions as there is potential liability for settlement agents where the settlement agent closes and delivers inaccurate disclosures to the consumer or where the settlement agent knows there is a violation of the rule.12 CFR §1026.19(f)(1)(v).

A sample Affidavit for Private Lender or Seller Financier can be located at: click here. This  sample affidavit is provided to help you ascertain whether or not your lender customer has extended or makes more than five loans in a calendar year. Remember, all standard loan instructions, particularly for those lenders with which you regularly do business, should be carefully reviewed. Be watchful of any provisions shifting responsibility from the lender to you. Consider retaining copies of affidavits as well as any closing instructions in accordance with your company’s evidence of compliance policies and procedures.

Sellers and private lenders should always be advised to seek the advice of legal counsel for any loan transaction, especially as to any potential compliance requirements under TRID. There are other state and federal laws and regulations that may impact the residential loan transactions. RESPA still applies to those loans if they qualify as federally related mortgage loans under Regulation X. State SAFE Acts are also covered by this bulletin. In some states, a residential mortgage for construction of a one to four family structure or a manufactured home permanently affixed with title surrendered as applicable may also be a dwelling. If you are unsure whether the financing is for a residential mortgage covered by TRID, it would be prudent to obtain the affidavit and indemnity from the private lender/ seller financier or contact your own legal counsel to discuss.

While Stewart Title Guaranty Company has reviewed the final TRID rule, we remind you that settlement services are outside the scope of our agency contract. Information, interpretations and views of Stewart Title Guaranty Company are offered as a courtesy only and expressly do not constitute legal advice. You may or may not agree with or follow such views and interpretations. You are advised to consult your own legal counsel in making all decisions regarding laws and regulations pertaining to escrow and closing matters. 

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
12.28 Mortgages
Exceptions Manual:
None
Forms:
None