Countrywide wholesale closing protocol is morphing and changing. We’re keeping our eyes open and trying to keep up.
Just this week we had to reprint a couple of Closing Services Letters because the fonts for the fill-in fields were different than the body of the letter. That kinda stymied me but I’m going along to get along……
Countrywide has for some time been using closing instructions that are very similar to the Uniform Closing Instructions that are percolating in the MBA and ALTA pots. We know and expect the UCI to deal with affiliations, but I was surprised to see THIS condition in instructions received this afternoon:
THE BROKER AND THE TITLE CO/CLOSING AGENT ARE NOT ALLOWED TO HAVE ANY AFFILIATION WITH EACH OTHER.
Note that there is no further definition or clarification provided so on the face it precludes any and all ABAs and JVs between mortgage brokers and title companies/agents in CW wholesale transactions.
There is no tolerance set out for ownership levels, so presumably any percentage of ownership could constitute an affiliation.
What about family relationships? If you have an employee of a title company married to a mortgage broker, are the two companies prohibited from doing business on CW deals?
Anyone run into this and have more info?
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Diane, in regard to CW’s new condition, it sounds like a pissed off manager wrote that one! I’m sure we’ll find out soon enough how the “real” conditon will read. It’s just too general right now, way too open for interpretation.
Thanks, Rich. That’s sorta why I’m asking if anyone else has seen it. The UCI restrictions flow more to the “closing employee” at the table rather than the title company or closing agent. This is a pretty broad sweep. If it is coming down from CW corporate, maybe we all can give some broad feedback asking for clarification.
I had only one problem with a title agent / broker relationship in 15 years of lending but it was a doozy. I closed a 6 million dollar refi, brokered it through a Southern California lender, who I discovered brokered it to Merrill Lynch. To make a long story short, the borrower signed docs that gave no indication that there was a prepayment penalty (he would never have accepted one), and yet when Lynch got the docs, lo and behold, there was a prepay in the ARM rider (our copies did not have this). Borrower had to pay Lynch over $60,000 in penalties and naturally sued everyone involved. SoCal broker immediately filed BK, escrow officer was promptly fired, and my company and the title co split the settlement to the borrower. So I can see how this kind of colusion could have some awful consequenses, although I don’t think the abuse was especially prevalent. However I am seeing data now that indicates that this sort of thing is on the increase ; I suspect that more lenders may do this as a CYA to avoid being dragged into lawsuits. http://realestateethics.blogspot.com/2007/12/countrywide-no-more-broker-owned-title.html
I have been following the UCI for several months and know that the comment period was to end on 1/30/08. Also, that an MBA convention just concluded. Anyone have any word on the results of the comment period?
I haven’t heard a thing but I notice that ALTA is offering an accredited CE course on the UCI at their next conference. That makes me think there’s a final version on the way.
I haven’t heard anything on a new version but i am hoping.
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