Wells Fargo announced several reminders in its Settlement Agent Communications released March 6 to help companies align to expectations for the future, especially as the settlement services industries prepare for implementation of the Real Estate Settlement Procedures Act (RESPA)/Truth in Lending Act (TILA) financial reform changes.
Wells Fargo also announced the company will continue to expand and enhance third-party oversight capabilities for title and settlement companies in order to monitor and measure performance.
“As expectations on lenders increase, so will expectations on third-party service providers. Our goal is to continue to support the customer’s choice for their title and settlement service provider, so long as that choice is one able to consistently meet all applicable requirements,” the March 6 announcement stated.
In January 2013 the American Land Title Association (ALTA) published its Title Insurance and Settlement Company Best Practices. These best practices are intended to “illustrate to consumers and clients the industry's professionalism and best practices to help ensure a positive and compliant real estate settlement experience.”
Wells Fargo stressed the need for companies to consider the ALTA Best Practices moving forward.
“If your company is not yet following the ALTA Best Practices — do you have a plan in place for adoption? If your company is already following the ALTA Best Practices — do you have written policies and procedures in place to document it and inspection processes to validate it?” the Settlement Agent Communications read.
Wells Fargo also included a reminder on expectations for lenders to charge exact and actual fees and to issue refunds and updated HUD-1s to the customer in instances where it is determined after closing that the actual amount was less than the amount charged on the HUD-1.
“For those who are not yet complying with this expectation, your compliance is critical to avoid any potential interruption to your eligibility to close Wells Fargo loans,” the Settlement Agent Communications stated.
Finally, Wells Fargo stressed the need for settlement service providers to better collaborate in the future for the advancement of all parties across the industry.
“Financial reform changes — particularly for RESPA/TILA — will significantly change how we work together and require us to partner more and much earlier in the loan process than is typical today,” the Wells Fargo communication read. “As an example, Wells Fargo is exploring solutions to replace current processes for faxing or emailing preliminary HUD-1s back and forth with updated, collaborative processes to share data, jointly review and approve final fees to enable efficient and consistent delivery of the new Closing Disclosure and other closing documents to the customer three days prior to closing.
“There will always be variations in closing requirements and practices from state to state and from lender to lender. However, the more that our industry can partner to align and act on common expectations and practices — in all states and for all lenders — the more we can advance and accelerate our common goals for professional, error-free closings and satisfied customers.”