This demonstrates the setup for the requirement to balance premiums between owner’s and lender’s premiums when dealing with simultaneous rates.
Fee Quotes on the Website
When a fee quote is obtained online, both the simultaneous premium and the basic premium (full lender’s rate) will be disclosed. Both of these amounts will be needed by the lender.
- In order to turn on the balancing premium functionality on the website, the partner employee must have the website role enabled, Website Costs: Balance Premiums for CD.
- This role can also be enabled for a Partner Type by going to Admin/ Partner-Related/ Partner Type Default Website Roles.
- The other area this functionality is utilized is on the Settlement/Reports tab, when using the Balance Premiums option.
When Balance Premiums is checked on Settlement/Postings, the Title – Lender’s Title Insurance line will show the lender’s coverage at the full calculated amount for the lender’s insurance provided and the Title – Owner’s Title Insurance (optional) line will show the calculated owner’s coverage premium plus the simultaneous issue premium, less the amount shown on Title – Lender’s Title Insurance.
If Balance Premiums isn’t checked on Settlement/Postings, the totals on Title – Lender’s Title Insurance and Title – Owner’s Title Insurance (optional) will match what’s on the lender’s coverage and owner’s coverage lines on Settlement/Title Charges and the CD will not be balanced.
If the file is located in an area where it’s customary for the seller to pay the owner’s coverage, the Title – Owner’s Insurance (optional) settlement statement line on Settlement/Title Charges can be set to a seller debit and the CD will show adjustments for the difference between the full loan premium and the simultaneous loan premium as a Title Premium Adjustment on both the buyer and seller side on Page 3.
The settlement statement will not reflect the balance premium functionality per state guidelines. The TRID rule requires the balancing only on the closing disclosure.
The setup for the default rate tables on the underwriters in the system may need to be changed to allow these calculations and this disclosure to work properly. Here is one example of how to setup the rate table defaults to be able to utilize this functionality.
On a purchase product, for the lender’s rates, the applicable basic rate table (full lender’s rate) is set as the Basic Rate and the simultaneous rate table is set as the Simultaneous Rate.
Simultaneous Rate Table
When you are creating a simultaneous rate table, be sure to flag it as such.