Document Updates: Addenda to Closing Disclosure (Cx18566) and Spanish Closing Disclosure (Cx18991)

When TRID 1.0 took effect, 12 C.F.R. § 1026.38(g)(1) required the creditor to, within Section E of the CD, disclose “an itemization of each amount that is expected to be paid to State and local governments for taxes and government fees” (see 78 FR 80123 [2013]). However, the Official Staff Commentaries only indicated that transfer taxes should be itemized (see 12 C.F.R. Pt. 1026, Supp. I, Paragraph 38[g][1] – 2, as set forth in Supra 80353 [2013]), leading to ambiguity as to whether recording fees should or should not also be itemized.

Under TRID 2.0, the CFPB attempted to clarify within 12 C.F.R. Pt. 1026, Supp. I, Paragraph 38(g)(1) – 3.ii that recording fees are not itemized (other than the amounts for recording both the deed to the subject property and the security instrument) and that the total disclosed was an accumulation of all recording fee amounts. To wit:

“Section 1026.38(g)(1)(i)(B) requires, on the first line under the subheading ‘Taxes and Other Government Fees’ and in the applicable column [under Section E], disclosure of the total amounts paid for recording fees, including but not limited to the amounts subject to § 1026.38(g)(1)(i)(A) [recording fees for deed and security instrument]. The total amount disclosed under § 1026.38(g)(1)(i)(B) also includes recording fees expected to be paid to State and local governments for recording any other instrument or document to preserve marketable title or to perfect the creditor’s security interest in the property. . . .”

The CFPB was more explicit on this matter in their analysis to the final TRID 2.0 rule:

“As to some industry commenters’ request to permit the full itemization of each document recorded in the transaction, the Bureau notes that permitting such a break out for the recording cost of each recordable document would, in some instances, require many more lines, potentially more than could be accommodated on a maximum of two pages . . . and is unlikely to improve consumer understanding of the Closing Disclosure. While not present in all residential mortgage transactions, the list of separate documents that could be required to be recorded depending on State law requirements can include, but is not limited to, certificates of satisfaction or partial satisfaction, contracts, deeds transferring ownership of various types, leases, modification agreements, mortgages or deeds of trust, easements, assumption agreements, covenants, declarations, liens, judgments, and powers of attorney. However, the Bureau notes that the creditor is permitted to provide a further listing of recording fees, at its discretion, as information used locally in real estate settlements pursuant to § 1026.38(t)(5)(ix) in order to comprehensively describe the cost of each document included in the recording fees disclosed under § 1026.38(g)(1)(i). . . .” (82 FR 37728 [2017])

To accommodate clients who wish to provide an itemization of recording fees in the manner outlined by the CFPB, we will be modifying the “Addendum to Closing Disclosure” which appears in both Cx18566 and Cx18991 to include an “Itemization of Recording Fees” table. This table will only print within the addenda when new field “Print Breakdown of Recording Fees on CD Addendum” (FI 148871) is set to “Yes”.

This table is similar in format to Section E and is placed within the middle of the addenda, to meet the requirements of Supra Paragraph 38(t)(5) – 5. However, the table will not:

• Have line numbers (i.e., it is not meant to be a “spillover” from Section E, but an itemization for settlement agents and auditors);
• The “Deed” and “Mortgage” amounts disclosed in Line E.01 will be disclosed within the far-left columns within the first two lines, with no designation as to when or whom they are paid by (i.e., the cells within the remaining columns for these two lines will be shaded gray and left blank); and
• The table will reference Section E for the totals of the itemization, rather than separately disclosing them superfluously.

These changes will take effect on April 21, 2021 and are available now on Stage servers for testing. Questions or concerns about these changes should be directed towards Client Support at 1.800.497.3584.

TW 341056
DR 341736