Title Insurance Association Expresses Concern

The American Land Title Association (ALTA") has expressed concern that the new TILA-RESPA Integrated Disclosure form to be used as a "Closing Disclosure" does not properly provide for the disclosure of title insurance premiums.  In a post on BusinessWire.com ALTA expresses its concern that the new Closing Disclosure that replaces the HUD-1 Settlement Statement as of August 1, 2015 will mislead consumers as to exactly what is being paid for title insurance premiums.  ALTA is the national association of title insurers and others involved in land title matters. 

ALTA indicated that the form as developed by the Consumer Finance Protection Bureau ("CFPB") is contrary to state insurance regulations in about half of the states in the Country.  ALTA is urging CFPB to "take swift action to ensure consumers receive the most accurate information about their mortgage costs, including title insurance premiums and settlement services".  Assuming the CFPB form is not changed, ALTA stated that, "Title and settlement agents will have to provide additional disclosure forms to consumers at closing to show the actual title insurance premiums charged and to prove compliance with state law governing industry-filed rates. We support a cleaner real estate transaction but not at the expense of consumers' understanding of their actual mortgage costs".

Various versions of the "Closing Disclosure" form can be found HERE.  There are annotated forms, completed sample forms and blank forms for both the "Loan Estimate" (the initial disclosure form to be used in lieu of the GFE), as well as the Closing Disclosure. 

I have been using the HUD-1 Settlement Statement and separate TILA disclosures for more years than I care to remember and may be a bit biased, but I think those forms worked well.  I think the new forms create more confusion than they eliminate.  Of course regardless of the forms used, there are buyers and sellers who will be confused beyond belief.  All the more reason that real estate professionals need to be familiar with these new forms and the regulations on which they are based.