Eduation & Training | T-64: Do You Know?

18 Mar

Eduation & Training | T-64: Do You Know?

Some of the questions I have been asked are:

  • Do the commission amounts have to be disclosed on the T-64? Answer- No only the payees on the CDA.
  • Do we have to fill in the recording? Answer- It is optional; however, it is a great practice to fill in all information.
  • Do we disclose all fees paid to settlement agent if we pay fees out of the Escrow fee? Answer- Only the fees disclosed on the CD. If you have an all-inclusive Escrow fee and pay for example: notary fees separate, only disclose the charges on the CD. Any “pass-thru fees” would be paid out of operating.

Below you will find a link to the explanation as well as an example of the form used.

https://www.tdi.texas.gov/rules/2015/documents/txclosureform.pdf

The Texas Disclosure (T-64) is an addendum to the new federal Closing Disclosure form.  On October 3, 2015, the Texas Department of Insurance (TDI) required settlement agents to use the Texas Disclosure in addition to the Closing Disclosure Form. 

Why another form?

TDI states in the Commissioner’s Order 4038:

“Some of the changes in the Closing Disclosure conflict with Texas closing requirements and practices. When the CFPB integrated the HUD-1 and the final Truth-in-Lending disclosure to create the new Closing Disclosure, it removed or combined items that were listed individually on the HUD-1. For example, the current HUD-1 includes a section to disclose portions of the real estate commission paid to third parties, but the Closing Disclosure does not.

The Texas Disclosure will require agents to list portions of the premium or real estate commission paid to third parties. The Texas Disclosure requires settlement agents to separately itemize other fees and charges paid to the real estate agent that may have been aggregated on the Closing Disclosure. The Texas Disclosure also adds a signature line, authorizing the settlement agent to disburse the funds.

In addition, the Texas Disclosure is necessary to show the actual price for title insurance in a simultaneous-issue transaction in Texas. In approximately half the states, including Texas, title companies offer a discount on the loan policy when both a loan policy and an owner’s policy are purchased in a single transaction. However, the instructions for the Closing Disclosure require the agent to list the loan policy at the full, undiscounted premium and to show the simultaneous-issue discount as if it applied to the owner’s policy instead. In Texas and other states, this requirement will cause the owner’s and loan policy premiums on the Closing Disclosure to differ from the actual amounts charged for each policy.  This scenario becomes even more confusing for consumers in Texas, as well as in 30 other states, where the seller pays, or is likely to pay, for the owner’s policy. Because the Closing Disclosure requires the agent to apply the simultaneous-issue discount to the owner’s policy rather than the loan policy, the form will inaccurately state the seller’s contribution to the title insurance costs. Further, by showing the higher-priced full loan policy amount rather than the discounted loan policy amount, the borrower’s cash-to-close number in the Closing Disclosure is rendered inaccurate and overstated.”

In conclusion, the T-64 is important in all of our Texas transactions. This form allows us to combine fees rather than list them all separately. It is also a “double check” if you will to keep us compliant and make sure we are charging fees correctly.

As always, please do not hesitate to reach out to me with any and all questions @ april.roberts@fnti.com.

Write a Reply or Comment