Idaho Admin. Code r. 18.01.39.011 requires the following:
“No title entity may accept any order for; issue a title commitment, guarantee, title insurance policy for; or provide services, including but not limited to escrow closing and foreclosure services, to; an applicant if it knows or has reason to believe that the applicant was referred by a producer of title business, where the producer of title business has a financial interest in the title entity to which the business is referred unless the producer of title business has disclosed to the applicant the financial interest of the producer of title business. The disclosure must be made in writing and contain the items required in Section 012 of this rule.”
A “producer of title business” is defined as follows (in relevant part):
“. . . any person engaged in [Idaho] in the trade, business, occupation or profession of:
b. Making loans by interest in real property; and
c. Shall include but not be limited to real estate agents, real estate brokers, mortgage brokers, lending or financial institutions . . . engaged in the sale of real property . . .” (Ibid. r. 18.01.39.010.03)
Due to this requirement, we will now be providing Cx18886, which includes the following disclosures (pursuant to Ibid. r. 18.01.39.012):
1. A heading, in bold-face, type 14 font: “NOTICE OF FINANCIAL INTEREST IN TITLE ENTITY BY PRODUCER OF TITLE BUSINESS”;
2. The following statement in type 12 font:
“We call this interest to your attention for disclosure purposes. [Field 15360] has a financial interest in this title entity [Field 40395]. This financial interest may result in a conflict of interest in our representation of you. Accordingly, you are free to choose any other title entity which is licensed by the Idaho Department of Insurance in the county in which the property is located. A list of title insurers and title agents licensed in the county in which the property is located may be found by contacting the Idaho Department of Insurance.”;
3. The citation “Idaho Admin. Code r. 18.01.39.011 & .012”; and
4. An acknowledgment and signature section, where the borrower acknowledges that he has read the notice and chooses to employ the services of the title entity referred by the lender.
Since this document is only required in cases where the producer of title business has a “financial interest” in the title entity (which is defined under Ibid. r. 18.01.39.010.02 as “any interest that entitles the holder in any manner to Two and one-half percent [2.5%] or more of the profits or net worth of the title entity in which the interest is held”), we will be configuring this document to print under the following conditions:
- “Disclosure Package Type” equals “Initial Disclosure”;
- “Conflict of Interest” equals “Yes”; and
- “State Code” equals “Idaho”.
Because the information necessary for determining whether a “financial interest” exists or not is not passed to us from any LOS, we will be creating a new field (“Conflict: Lender Receives 2.5% or More of Referred Title Company Profits”; Field 82052) which will have a global optional prompt. When the new field is set to “Yes”, field 40122 “Conflict of Interest” will also be set to “Yes,” triggering the new document. Field 82052 can also be mapped, particularly for “lights out” clients.
This change will take effect on August 12, 2014. If you have any questions or concerns about this change, please contact Client Support at 1.800.497.3584.
August 4, 2014