This demonstrates how to use the simultaneous rate table with multiple loans on a file. An explanation of each rate table comparator is reviewed to ensure the rate table is pulling the correct file information to calculate the simultaneous rate for each loan on the file as needed. The examples provided will show simultaneous rates as the only available option, or multiple options allowing the user to select as needed on a per-file basis.
|9.1||02/21/2019||Information and screenshots created using version 9.7|
Rate Table Review
Admin/Title Premiums/Rate Types
Edit an existing simultaneous rate table or click Add to create a new simultaneous rate table that applies to lender premiums when additional lenders’ policies are being issued on the same file.
The examples used in this article all use the same simultaneous rate table. The table uses the Condition arguments of 1st Owner’s Consideration >= Lender’s Consideration and 1st Owner’s Consideration < Lender’s Consideration. The Rate Tiers/Based On uses Lender’s Consideration. The rate tables are then set on the underwriter Title Premium Rates Default settings for the product.
This is not focusing on the details of setting up rate tables. However, a review of the options available in the Condition area and the Rate Tier/Based On area is included to guide in the selection when building a rate table. It is important to understand how these options function, especially when dealing with files that include multiple loans. The following is a review of each option and what is compared to calculate the rate correctly.
- Default uses the consideration of the Settlement/Title Charges line on which the premium is being calculated.
- Loan Amount uses the loan amount specific to the rate being calculated.
- Lender’s Consideration uses the lender’s consideration shown on the Settlement/Title Charges line specific to the premium being calculated.
- First Lender’s Consideration uses the lender’s consideration for Loan #1 regardless of the loan for which the premium is being calculated.
- Lender’s Total Consideration uses the total of all loan consideration amounts on the file.
- Aggregate Lender Consideration uses the total lender’s consideration for the current loan and all higher priority loans.
- Aggregate Lender Consideration Not Including Current uses the total lender’s consideration for all higher priority loans and does not include the current loan consideration.
- Sales Price will use the Sales Price on the New Loans panel.
- Owner’s Consideration uses the owner’s consideration shown on the Settlement/Title Charges line specific to the premium being calculated.
- First Owner’s Consideration uses the owner’s consideration related to the first owner’s policy regardless of the policy for which the premium is being calculated.
- Owner’s Total Consideration uses the total of all owner’s consideration amounts on the file.
- Consideration Difference uses the absolute value (positive value) of owner’s consideration minus the lender’s consideration.
- Total Consideration uses the total of either all lenders’ considerations or owners’ considerations, depending on what is being calculated. This works like the Owner’s Total Consideration and the Lender’s Total Consideration, but is not restricted to one or the other, thereby allowing the rate table to be used where either instance may apply.
- Total Consideration Difference uses the absolute value (positive value) of the total of all owners’ considerations minus the total of all lenders’ considerations.
- Aggregate Consideration Difference uses the calculated aggregate difference between the “aggregate owners” and “aggregate lenders” considerations using current and higher priority considerations for each.
The following are only used in the Rate Tiers/Based On area and goes beyond only looking at consideration and actually calculates rates. Examples are not provided in this article.
- Calculated Difference calculates one rate based on the lender’s consideration and one rate based on the owner’s consideration, and returns the absolute value of owner’s rate minus the lender’s rate. Rounding is done on each rate individually and not on the total. This rate is the calculated rate.
- Total Calculated Difference This works similar to Calculated Difference except it uses the totals of all considerations.
Simultaneous Rate Examples on an Underwriter Partner
Admin/Partners/Edit/Underwriter/Title Premium Rates
- Loan #: This drop-down determines the loan on which the rates apply. Settings on Loan #1, Loan #2, Loan #3, and Loan #4 override the Default setting.
Default: All lenders’ and owners’ policy coverage lines for which rates are not configured in one of the other options below, including all loan numbers greater than four. Loan #1: Lender policy coverage lines pertaining to loan one and all owner’s policy coverage lines. Loan #2: Lender policy coverage lines pertaining to loan two. Loan #3: Lender policy coverage lines pertaining to loan three. Loan #4. Lender policy coverage lines pertaining to loan four. The following examples for a purchase product show only the basic rate and simultaneous rate tables needed to give examples that explain the use of the Conditions or Rate Tiers/Based On options available. However, these would certainly apply to all rate tables including discount rates.
In this example, two rate tables are added as Basic in the Lender’s Premium Rates area, a basic rate table and a simultaneous rate table. When setting the simultaneous rate table as the default, all loans on the file using this Default setting will calculate using the simultaneous rate, however, the user does have the ability to change the rate table on the file to calculate using the basic rate if needed. Adding a rate table as Basic in the Owner’s Premium Rates area will apply to all owner’s policies on a file.
NOTE: If the majority of the multiple loans on files use the basic rate, then the basic rate table would be set as the default instead of the simultaneous rate table.
Setting Loan #1 Lender’s Premium Rates Basic and Simultaneous with default rate tables allows the calculation of the TRID compliant premiums to display on the Closing Disclosure as the lender’s premium with the simultaneous discount applying to the owner’s premium.
Loan #2, Loan #3, and Loan #4 can either have rate tables set, which will override the Default settings, or they can remain blank and use the Default settings.
Rate Table Examples on Files with Multiple Loans
The following examples show simultaneous rate table selections for multiple loans on a file.
- Loan #1: Title Premium Rates panel with Lender’s Rate Type set with a basic rate table only and the Lender’s Simultaneous rate set with a simultaneous rate only. This allows the required TRID disclosure of the full basic rate to appear on the closing disclosure while applying the simultaneous discount applied to owner’s premium.
- Loan #2: Title Premium Rates panel with Lender’s Rate Type set only with a simultaneous rate table.
- Loan #3: Title Premium Rates panel with Lender’s Rate Type set with a basic rate and a simultaneous rate. The simultaneous rate table is set to default in this example, however, either could be set as the default.
Simultaneous Loans on Statements
On the Closing Disclosure for Loan #1, net proceeds for each additional loan will appear in the Amount column in the Summaries of Transactions/Section L and the principal amount for each additional loan will be included in the line description. If more than one additional loan is on the file, the greatest loan number will appear on line L04 and all other loans in between it and the Loan #1 will appear on a supplemental page.
2010HUD Closing Statement
On the 2010HUD for Loan #1, net proceeds for each additional loan will appear in the Amount column in the 200 Section: Amounts Paid By Or In Behalf Of Borrower beginning at line 204 and continuing through line 209 with the the principal amount for each additional loan included in the line description. If more than six additional loans are on the file, then only five loans will appear in this section and line 209 will the show See Addendum 209 with a net total of the remaining loans in the Amount column. The breakdown of the remaining loans will display on a supplemental page.