Effective January 3, 2001

Land Title’s bundled refinance closing fee for Metro Counties* is $330.  Please visit our title insurance rate calculator for instant, accurate rate quotes.

Bundled Closing Fee included all closing fees except recording and releases tracking fees.  For more information or any questions please call or email me.

*Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Elbert and Jefferson Counties.  The fees varies outside of the Metro area.

What is a closing?

The closing is the meeting where all real estate and mortgage documents are signed, and ownership of a property is officially transferred from the seller to the buyer.

Who attends the closing?

The buyer and seller, both real estate professionals, and closer are typically present at the closing. Sometimes the lender will send a representative, and, if a buyer or seller cannot attend, their representative (as designated by a power of attorney) will attend in their place. The title company’s closer usually performs the closing for both resale and refinance transactions, although lenders may send their own representatives.

Where is the closing?

The closing usually takes place at the title company’s office where the closer works. This allows the closer to easily access and print new documents if necessary. Closers occasionally travel to other locations for a closing; more commonly, Land Title can arrange for a closing professional in another Land Title office to handle your closing if the need arises. Be sure to confirm the closing ahead of time with the closer.  Driving directions to all Land Title locations are available on our website at LTGC.com.

What to bring to closing

To avoid delays at the closing table, buyers and sellers will need to bring the following items to closing:

• All buyers and sellers must bring a government-issued ID — a valid driver’s license, a picture ID issued by the state, or a valid passport.
• Lenders typically require buyers to have a second form of ID as well, like a Social Security card or credit card.
  If there has been a change in marital status, let your closer know immediately.
• The party whose name has changed will be asked to provide a driver’s license reflecting the new name, as well as a marriage license or divorce decree documenting the change; it is helpful to have these items prior to the closing, rather than at the closing table, so the closer can make sure all documents are prepared correctly.
• If there is a Power of Attorney, or if there has been a death in the family, make sure the closer knows this information ahead of time.
• Additional documentation will be required at closing, and often documents must be approved by the title company before the closing.
• Colorado law requires that buyers bring good funds to closing. Good funds can be a wire or cashier’s check made payable to Land Title Guarantee Company.
• (Money orders, Western Union transfers, and personal checks are not considered good funds.) Land Title does not accept cash over $500 for employee safety reasons.
• Sellers need to know their Social Security number (or Tax Identification Number) to complete IRS documents at the closing table, since the sale of the closing must be reported to the IRS.
• The seller typically brings house keys to give to the buyer. Other items pertaining to the house (appliance booklets, warranties, garage door openers, etc.) can be left at the property for the buyer when they move in.

How long is the closing?

A typical closing takes an hour to an hour and a half. We are more than willing to provide copies of all documents prior to closing to help speed up the process. Please let your closer know if you or your clients are running even a few minutes late to the closing.

What to expect at the closing table

1. The closer will greet clients and make copies of both the buyer’s and the seller’s required identification so they can
notarize all signatures.

2. The closer explains that the closing is really two transactions — the real estate side and the loan side. (Since the
most time-consuming part of the closing is the borrower side, some agents advise their sellers to arrive 30 minutes after the scheduled closing time in order to allow buyers to sign the loan package.)

3. The closer reviews the settlement sheet with the buyer and seller and answers any questions. The buyer and seller sign the settlement sheet.

4. Real estate documents are reviewed for accuracy and signed, including the Warranty Deed that officially transfers title from the seller to the buyer (real estate side of the transaction).

5. The buyer reviews the new lender loan package from the lender and signs the Deed of Trust and all lending documents (loan side of the transaction).

6. The buyer and lender provide good funds to the title company. (For an early morning closing, lenders are encouraged to wire funds the day prior to avoid any delays.)

7. Any funding conditions are sent to the lender for approval. (This can sometimes add additional time to the closing.)

8. The closer distributes checks to the appropriate parties.

9. The closing agent offers three choices to all parties for how they would like to receive copies of their signed closing
documents:

• Clients may receive paperless documents via email;
• Clients may receive paperless documents on a CD at the closing table; or
• Clients may elect to receive paper copies of all documents before they leave the closing.

10. Keys are transferred.

11. After the closing, the closing agent will immediately record the Warranty Deed, the Deed of Trust and other pertinent documents with the county clerk’s office.

12. The title policy is generally issued within 30 days of the closing. Remind buyers that this is an important document to expect, and to file it with other legal documents.

Title insurance is already a highly regulated industry, but it will become even more so once the new version of Colorado Division of Insurance Regulation 3-5-1 takes effect on May 1, 2010. The revised regulation will further clarify the rules for title insurance products and services, specifically as they affect items of value provided to real estate professionals. Consumers often have little understanding of title insurance and frequently rely on the advice provided by their Realtor or lender. The goal of the regulation is to ensure that real estate professionals who direct title business do so based on the service levels, ethics, reputation, and financial stability of the title entity—not inducements or other remuneration.

New rules for Ownership and Encumbrance Reports

One change that real estate professionals will notice immediately is that all Colorado title insurance companies will begin charging for Ownership and Encumbrance (O&E) reports, a product previously provided free of charge in many markets. The O&E charge must be properly filed with the Division of Insurance the same way that rates are filed.

New rules for To Be Determined (TBD) Commitments

Realtors occasionally request a TBD (To Be Determined) Commitment while they are marketing a property. TBDs can help a Realtor better understand the status of title and eliminate any surprises that might compromise the transaction. Beginning May 1, 2010, title entities must charge for TBD at the time the commitment is provided. The charge paid for a TBD may be credited back to the appropriate party at closing.

Free products allowed

Title entities may provide, without charge, a single copy of the last recorded vesting deed on a property. When issuing a commitment for title insurance, a title entity may give, without charge, copies of the supporting title documents for the property.

New rules for classes for Realtors

A title entity may teach classes on any subject they feel qualified to teach. The new rules, however, focus on which classes may be provided free of charge. If a class is primarily related to the business of title insurance (e.g., commitments, policies, closings, etc.), it may be conducted without charge to the attendees. This includes reasonable expenses for food and beverage and room fees. If a class does not relate to title insurance (e.g., real estate marketing, real estate forms, etc.), then any costs associated with the class must be passed back to the attendees. Here is an example of how costs must be passed back to attendees: Assume a title insurance company sponsors a class on Internet marketing for real estate brokers. The company spends $200 on lunch, $50 on room rental, $10 on printed materials, and $40 on speaker fees, for a total cost of $300. If there are 50 people taking the class, then each attendee must be charged at least $6 for the class. If it costs a title company anything to perform or sponsor the class—even if the costs are minimal—the title company must pass back those costs. If the same costs were associated with a class on how to read a title commitment, or what to expect at the closing table, there is no requirement to pass back any costs to the attendees.

New rules for open houses

A title entity may not give money or any other thing of value to a real estate broker or other settlement producer in exchange for an advertising benefit at an event. Title entities may participate in events if they maintain a physical presence throughout the event. For example, a title entity may have a table at an open house with refreshments and the title company’s marketing materials if an employee of the title entity is present and engaging in the promotion of the entity’s services.

Reasonable title search and exam

All title insurance underwriters are required to create written standards for search and examination for use by title entities (underwriters and agencies). These standards must comply with sound underwriting practices. This is actually not a new practice. Underwriters have routinely provided standards to their agents and direct insurers; the new rule simply codifies the practice.

Generic (“garbage”) exceptions not allowed

A generic exception on a title commitment is defined as any overly broad exception that is not a standard or preprinted exception. Generic exceptions are sometimes refered to as “garbage” exceptions. A generic exception does not refer to a specific recorded document (e.g., “Any and all roads, easements, rights of way, etc.”). These types of exceptions are only permitted in cases where the proposed insured on a commitment has made a written request for a policy form that makes use of them. For practical purposes, it is expected that generic exceptions will only be used for refinance and junior lien transactions. Very few purchase transactions (i.e., owners’ policies) will make use of these exceptions. Aside from the standard or preprinted exceptions, all exceptions on a title commitment or policy must refer to the specific recording information on the document. If a document is not recorded, the title entity should reference any identifiable information on the document. The identifiable information may include dates, names of parties, case numbers, and similar defining information. Again, providing book-and-page exceptions is the industry standard for reputable title insurance companies already, and Realtors, in line with keeping their fiduciary duties to buyers and sellers, generally steer clear of generic exceptions on owners’ policies. The new rules codify the standard for the purpose of offering additional protections to the consumer.

Holding money

When a title insurance company collects money from clients or third parties, all money belonging to others must be deposited in a bank account that is separate from any other funds. This includes portions of premiums that will be sent to an underwriter, earnest money, loan proceeds, escrows, etc. This account must be labeled or named “fiduciary account,” “trust account,” “escrow account,” or another similar name that identifies the account as one to be used solely for holding these funds. A title entity is prohibited from mixing these funds with any others. A title entity is also prohibited from using the funds for any purpose other than what is set forth in writing for a specific transaction. A title entity may deposit fiduciary funds (money belonging to others) into a sweep account or any type of account that uses that money as an investment or revenue generator. The title entity must get written authorization from the owner of that money before depositing it into the account. Not getting written authorization, or getting it after the money is in the account, will be viewed as a violation of the Regulation. A title entity may earn interest on fiduciary funds as long as a disclosure is provided to all parties that interest has been or will be earned. The disclosure may be given at any time up to and including closing. There are additional rules for title insurance agencies that receive earnest money without written instructions.

The Colorado Division of Real Estate has repealed and re promulgated Regulation 3-5-1 (it’s purpose is to protect the consumer and to insure that the title industry in Colorado is freely and fairly competitive and provides valuable products and services to consumers at reasonable rates) and goes into effect on May 1, 2010.

Beginning May 1, 2010, all title entities must begin charging for O&E reports.

To read the entire letter from the Colorado Division of Real Estate click here.

This information was put together by Jessica Meyers & Les Martin with Land Title Guarantee Company.

General:

Q: Where is the total cash to close or monthly payment disclosed on the GFE?

A: This information is not disclosed on the GFE.

Purchase specific:

Q: Are the HOA dues or fees disclosed on the GFE?

A: No, they are not disclosed.

Q: If a lender requires a condominium certificate and questionnaire, where does the charge go on the GFE?

A: If a lender requires a condominium certificate and questionnaire, the service is performed by a third party and the borrower is not permitted to shop for the provider of that service, the charge must be disclosed in Block 3 of the GFE (10% tolerance).

Q: If a seller typically pays for the owners title insurance, does the charge still have to be shown on the GFE?

A: Yes, an estimate of the cost must be shown in Block 5, ‘owners title insurance’ for all purchase transactions regardless of who is selecting or paying for it. In Colorado, it is common for the seller to pay this, in which case the title company will list a debit/credit on page 1 of the HUD to offset the charge.

Q: Does a transfer tax (payable to a government entity, not to an association) need to be disclosed on the GFE?

A: Yes. On a purchase there will always be a State doc fee disclosed. Most commonly found in resort communities, transfer taxes must also be disclosed on the GFE. Use of the GFE calculator and confirmation of fees will provide this information if applicable, as does the commitment when issued.

Changed Circumstance:

Q: If there is a ‘changed circumstance’, when does the loan originator issue a new GFE?

A: When there is a ‘changed circumstance’ and the loan originator intends to issue a revised GFE, the loan originator must do so within three business days of receiving the information sufficient to establish changed circumstances. A loan originator may issue a revised GFE reflecting only the increased charges resulting from the ‘changed circumstance’.

Q: What is considered a ‘changed circumstance”?

A: (1) Acts of God, war, disaster, or other emergency; (2) Information particular to the borrower or transaction that was relied on in providing the GFE and that changes or is found to be inaccurate after the GFE has been provided, which information may include information about the credit quality of the borrower, the amount of the loan, the estimated value of the property, or any other information that was used in providing the GFE; (3) New information particular to the borrower or transaction that was not relied on in providing the GFE; or (4) Other circumstances that are particular to the borrower or transaction, including boundary disputes, the need for flood insurance, or environmental problems.

The discovery of previously undisclosed circumstances affecting settlement costs such as unreleased liens could be considered a ‘changed circumstance’.

The property address provided by the applicant, turns out to not be the correct, legal address could constitute a ‘changed circumstance’.

After the GFE is issued, parties are added to or removed from title or the property is moved into or out of trust, or it is determined that a party will be using a POA to sign, which may require additional work and fees could be considered ‘changed circumstances’.

During or as part of the transaction, it is determined that the property use may change, such as from owner-occupied to rental property, this could constitute a ‘changed circumstance’.

The borrower’s credit score changes or additional services are required such as upgraded appraisal, survey or other requirement by the loan originator may constitute a ‘changed circumstance’.

GFE Block Description:

Q: What charges are part of the charge in Block 1 (zero tolerance) of the GFE, ‘Our origination charge’?

A: Block 1, ‘Our origination charge’ on the GFE contains all charges for origination services performed by or on behalf of a lender and/or a mortgage broker. Origination services includes, but is not limited to, the following: taking of the loan application, loan processing, underwriting of the loan, funding of the loan, acting as an intermediary between a borrower and lender, obtaining verifications and appraisals, and any processing and administrative services required to perform these functions.

Q: What services belong in Block 3 (10% tolerance if directed by the lender), ‘Required services that we select’?

A: Block 3 of the GFE contains the charges for all third-party settlement services (except title services) for which the loan originator requires and selects the provider of the service. Examples of these charges for services generally include but are not limited to, appraisal, credit report, tax service, flood certification and up-front mortgage insurance premiums.

Q: Where should the quote for the Lender‘s title insurance policy premium be disclosed on the GFE?

A: The Lender‘s title insurance premium is part of Block 4 (10% tolerance if lender selected or on the provider’s list and selected by the buyer/borrower), ‘Title services and lender‘s title insurance’ on the GFE, along with any fees for title searches, examinations, endorsements and all charges associated with the title services and settlement (closing) agent services.

Q: What charges are disclosed in Block 6 of the GFE?

A: Block 6 of the GFE includes third party services required by the lender where the borrower is permitted to shop for the provider, other than Title services and lender’s title insurance (Block 4) and Owner’s title insurance (Block 5). These types of charges include, but are not limited to: survey, pest inspection and other types of inspections required by the lender. Charges that are part of the sales contract, but are not required by the lender, are not disclosed on the GFE.

Q: What is included in the GFE boxes #4, 5, 7, 8 as it relates to title and escrow?

A: #4 – title services, 5 – owner’s title policy, not applicable on a refinance, 7 – recording fees, 8 – transfer tax and state doc fee, not applicable on a refinance in Colorado but may be in other States

Q: What fees show in the GFE calculator?

A: The buyers side only, seller paid items aren’t listed, according to the questions answered within the GFE calculator (real estate closing fee split 50/50)

Basics on the HUD:

Line 1101 includes the title policy, real estate closing fee if applicable, loan closing fee, tax certificate, courier fee, e-doc fee and release tracking on a refinance

Line 1201 includes the recording fees

Line 1102 and below list the seller paid fees, which aren’t bundled into 1101

Provider List:

Q: If a mortgage broker provides the GFE and the written list of settlement service providers and the borrower chooses to use a provider identified on the written list for a service, is the lender subject to tolerances for those services?

A: Yes, if the lender permits a mortgage broker to issue the GFE and the written list of providers, the lender is subject to the tolerances for the services in which the borrower chooses to use the identified provider.

Q: If the borrower chooses a settlement service provider that is not on the written list, does the tolerance apply?

A: No, if the borrower chooses a settlement service provider that is not on the loan originator‘s written list of providers, the amount paid for that service is not subject to a tolerance.

Q: May a loan originator state on the “written list” that the loan originator is not endorsing the quality of a settlement service providers service?

A: Yes, the loan originator may include a statement on the “written list” that the listing of a service provider on the “written list” does not constitute an endorsement of that service provider.

Talking points regarding the ‘provider list’:

By choosing Land Title as a provider, we guarantee accuracy and confirmation of fees with the GFE Calculator.

By choosing Land Title as a provider, you will have the consistency of service on refinance transactions, where ‘other’ providers may not provide the same level of service.

If an unknown title company is chosen as a provider in order to avoid tolerance variables, but use of your normal service provider remains, there is a higher risk of audit.

In addition, by choosing your provider for the list, it provides benefit in creating a larger dollar amount variance on the 10% tolerance bucket so there is a larger cushion for error or potential loss.

TIL/APR:

TIL/APR related title and closing fees include, but are not limited to, the closing fee, courier fee and release-tracking fee.

An APR calculator is available at: http://www.efunda.com/formulae/finance/apr_calculator.cfm

The information contained in this web site is the opinion of Jim Renshaw and provided “as is” without warranty of any kind, either express or implied, including without limitations any warranties of merchantability or fitness for a particular purpose.

• Reduce or even eliminate GFE revisions
• Stay within the new tolerances
• Accurately complete GFE blocks 4, 5, 7, 8

Land Title GFE Quote Calculator

When preparing a GFE you are now required to quote title insurance fees in Colorado.