What Fees Should Go Into The New Line 1101?

Yesterday we talked about how the new aggregate or sum lines function on the 2010 HUD-1 form. Remember,  roll-up lines only pertain to buyer/borrower side charges.  Most roll-up lines are a sum of some other HUD-1 lines.  But the new line 1101 works a bit differently.  It shows one total amount for “title services and lenders title insurance”.  So, under the new rule what is a title service?

Title services are now defined as “services performed by title companies or others, and include fees directly related to the transfer of title (title examination, title search, document preparation), fees for title insurance, and fees for conducting the closing.” 

In this scenario, what would you include in line 1101?  Your exam and courier fees?  Any administrative or packaging fees?  Perhaps you have a document review fee or copying charge, would you now include those items in 1101?  It is likely that on a 2010 HUD-1 you would.
What about your closing fee?  Does it go on line 1102 or line 1101?  To understand that, let’s take a look at some other key features of the 1100s section of the new HUD-1 form.

It is important to note that only line 1101 amounts that are disbursed to 3rd parties must be broken out in additional lines in the series.  So, line 1102 will only show an amount of borrower charges if it is paid to a 3rd party.   Regardless to whom it is paid, it will also be included in the 1101 amount.

So, if you are reading this and asking “If 1101 represents the total of all of my title fees and lenders title insurance, but I’m only breaking out on additional lines those fees disbursed to a 3rd party …. am I correct in thinking that nothing on the new HUD-1 form will add up to total the amount in line 1101 for the borrower?”  Yes, you are right. 

So, shall we talk about that?  How are you going to present that to the borrower?  Will borrowers in your market expect to see an itemization of the individual fees?  Can you think of a way to explain the fee in a lump sum, one price fee for all title services and lender title policy charges?  Remember, they will have seen the lump sum fee at the time of the GFE in Box #4 so, perhaps it will be easier for them to understand than having to explain multiple fees for the work you do.

I would really like to hear your thoughts on this issue.  How will you need to present differently?  How will you need to adjust your fee structure?  What are your thoughts about line how line 1101 works in comparison to the other roll-up lines?