- October 01, 2015
- All Texas Issuing Offices
- UNDERWRITING - Simultaneous Issues in Texas
The Texas Department of Insurance (TDI) recently adopted Procedural Rule P-73 and the accompanying Texas Disclosure (Form T-64). The Texas Disclosure as promulgated is required to be prepared by Settlement Agents for transactions in which a federal Closing Disclosure is required (most closed-end consumer mortgage loans, but excluding home equity lines of credit, reverse mortgages, mortgages secured by mobile homes or by dwellings not attached to property, commercial or business purpose loans, and loans made by creditors that make 5 or fewer mortgage loans in one year).
It is important to keep in mind that the Texas Disclosure is NOT a "settlement statement" but merely a disclosure of information necessary to accompany the required federal Closing Disclosure so that the consumer gets an accurate depiction of title policy premium charges under Texas law.
For further discussion of the differences between the CFPB method and Texas method of calculation of premium see: Stewart CFPB Watch Simultaneous Issuance Premiums: Texas Disclosure and CFPB's TRID Rule and the Stewart podcast titled "Simultaneous Issues Texas vs. CFPM presented by Heidi Junge and John Rothermel in August 2015.
The Texas Disclosure is also an acknowledgment and authorization for disbursement according to the federal Closing Disclosure. Information previously disclosed and/or itemized on the federal Closing Disclosure does not need to be re-disclosed or itemized on the Texas Disclosure, EXCEPT for the following that must be disclosed on the Texas Disclosure:
- Accurate Texas title insurance premiums, meaning title insurance premiums as set by the Texas commissioner of insurance [included under the section of the Texas Disclosure titled "Title Insurance Premium"].
- Separate itemization of all other fees and charges paid to the settlement agent (which may have been combined on the Closing Disclosure) [included under the section of the Texas Disclosure titled "Fees Paid to Settlement Agent"].
- All payments of portions of the title insurance premium (i.e., premium splits) [included under the section of the Texas Disclosure titled "Title Insurance Premium"] or real estate commission to third parties [included under the section of the Texas Disclosure titled "Real Estate Commission Disbursement"].
The Texas Disclosure can also be used to:
- Itemize fees paid to settlement agent (if not itemized on the Closing Disclosure).
- Itemize recording fees not itemized on the Closing Disclosure.
Itemize other fees not otherwise itemized on the Closing Disclosure (example: individual title insurance endorsements).
As of the date of this bulletin, Stewart affiliated office should not prepare or release Closing Disclosures to consumers, but rather shall rely on the lender to do so. All title insurance agents, whether affiliated or independent, are required to complete the Texas Disclosure T-64 to reconcile the simultaneous issue computations.
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.