News from Wells Fargo

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Lender issues settlement communication on June 1

Wells Fargo continues to update its settlement agents on a quarterly basis. South Carolina closing attorneys should pay close attention to these newsletters, which may highlight changes in closing processes and documentation. You can read the latest version here.

Significantly, the latest newsletter provides the following updated information:

  • Closing Insight™ training has been completed within Wells Fargo internally, and use of this portal method for communicating about closing files will continue to expand in all geographic areas. Closing attorneys should expect to receive requests to use Closing Insight™.
  • The numbers of “findings” are being reduced by RealEC, meaning some technicalities that were previously reported as closing file irregularities will now be eliminated. This change is good news for closing agents and applies not only to Wells Fargo, but to other lenders as well. An example is that file numbers will no longer trigger a “data mismatch” for dashes (-) if the rest of the file number matches. Another example is that differences in capitalization, formatting, common abbreviations and punctuation will no longer trigger findings.
  • The Service Provider Verification of Identity (SPVI) form has been updated and will now allow all document signers to use one form. Also, the revised form no longer requires details on the method of identification, such as drivers’ license numbers of borrowers.
  • The SPVI form for FHA loans must be send to the lender prior to disbursement. For all other loans, this form may be provided to the lender with the other executed loan documents.
  • Settlement agents are not authorized to sign any documents on Wells Fargo’s behalf. Any documents requiring the lender’s signature should be sent to the loan processor or closer.
  • Wells Fargo Tax Services will no longer provide services as an affiliate. Instead, the tax services will be provided by Wells Fargo Bank, N.A. The tax service fees previously disclosed in Section B or C of the Closing Disclosure will now be disclosed in Section A.

This blog will continue to attempt to keep closing attorneys updated on lender communications as they are distributed.

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Wells Fargo distributes new settlement agent communication

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Note: Settlement agents are scheduled to be re-evaluated

Wells Fargo delivered a memo entitled “News for Wells Fargo Settlement Agents” on March 23. The first paragraph cryptically announced that future communications will detail the Uniform Closing Dataset (UCD) that will become effective for lenders in 2018.

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For insight into the UCD, review Fannie Mae’s or Freddie Mac’s websites. Briefly, the UCD is going to be a common industry dataset to allow information on the Closing Disclosure to be communicated electronically. Fannie Mae and Freddie Mac have developed the UCD at the direction of the Federal Housing Finance Agency in an effort to enhance loan quality and consistency through uniform loan date standards. Stay tuned for more information on this topic and lenders gear up to comply.

The Wells Fargo memo also touted continued expansion of settlement agents who are using Closing Insight™.  Settlement agents who are just getting started were asked to take advantage of the support available at RealEC’s Closing Insight Resource Center at http://www.closinginsightresourcecenter.com or to contact the company at CISupport@realec.com or 800.893.3241. I encourage all South Carolina closing attorneys to get up to speed on this system as soon as possible.

The serious news from Wells Fargo, however, relates to a new effort to evaluate settlement agents.

The memo warned that Wells Fargo will evaluate the population of settlement agents who have closed loans within the past twelve months for problems such as missing documents, execution errors and other frequent problems that require curative work. As a result, settlement agents may receive letters indicating they are being removed from Wells’ list of approved settlement agents.

Processes are in place, however, to accommodate the customer’s choice for a settlement agent who is not on the approved list. Apparently, a new approval process will be instituted, but no detail on this process is provided.

house made of cashThe memo further indicates that attorneys’ ability to act as counsel for customers will not be impacted.  I don’t read this last directive to mean that attorneys who are not on the approved list will be in a position to close loans. They will only be in a position to dispense legal advice, if I am interpreting this correctly.

Settlement agents with questions are encouraged to communicate with Wells at WellsFargoSEttlementAgentCommunicatons@wellsfargo.com. I urge anyone who is interested in continuing to close Wells Fargo loans to hang onto this information.

Finally, the memo is requesting acknowledgement of Master Closing Instructions from all active and approved settlement agencies. Requests for this acknowledgement are coming from Wells Fargo in the form of e-mails to settlement agents. Please respond!

All lenders are beginning to hold settlement agents to higher standards. South Carolina closing attorneys are encouraged to stay abreast of changes and train, train, train staff members.

And, as always, contact your title insurance companies for insight into these matters.

Cyber Incident Preparedness for Closing Attorneys

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And what to do if you suspect a compromise

With the increase in wire fraud that is happening in closing offices around the country, our company recently shared two documents that I thought would be beneficial to pass along to all South Carolina dirt lawyers .

The first document is a Public Service Announcement from the FBI dated August 27, 2015 concerning Business Email Compromise (BEC). BEC is defined as a sophisticated scam targeting businesses working with foreign suppliers and businesses that regularly perform wire transfers. Legitimate e-mail accounts are compromised through social engineering and computer intrusion to conduct unauthorized wire transfers.

We have seen this happen in more than one law firm in South Carolina!

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This PSA states that the total number of victims from October 2013 through August 2015 was 8,179 and the total exposed dollar loss was $798,897,959!

The second document was prepared by Linda Grahovec, the Director of Education and Marketing for our company. This document provides two cyber incident checklists, one for use in preparing, and the other for use if your office is attacked.

Here are three pieces of advice for all closing attorneys:

  1. Use an e-mail system that requires two-factor authentication;
  2. Never wire funds based on the content of an e-mail. Always assume e-mail has been compromised, and validate the information by phone. A good practice would be to refrain from sending wiring instructions by e-mail.
  3. If you suspect fraud, contact the bank immediately.

Please remain vigilant! Read everything you can on this topic, and continue to update and guard your systems. One incident could easily put a law firm out of business. Title insurance companies are excellent sources of information and training on these topics! Call on them!

BB&T Follows the Lead of Other Large Lenders

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It will produce and deliver Closing Disclosures

BB&T logo 2BB&T announced on May 26 that it will be responsible for completing and delivering borrowers’ Closing Disclosures after the Consumer Financial Protection Bureau’s (CFPB’s) TILA-RESPA Integrated Mortgage Disclosures (TRID) rule becomes effective on August 1.

By making this announcement, BB&T joins Bank of America, Chase, Citi, Wells Fargo, SunTrust and Freedom Mortgage in removing the responsibility for preparing the borrower’s settlement statement from the hands of settlement agents (closing attorneys in South Carolina). Closing attorneys will prepare the seller’s CD as well as other forms necessary for disbursement. It is clear that the borrower’s CD will not contain sufficient information for disbursement, which will continue to be the responsibility of the closing attorney.

Like the other lenders, BB&T confirmed in its announcement that it will continue to work with closing attorneys to determine the fees and other information required for the Closing Disclosure.

stay tunedBB&T also announced, like several other large lenders, that it will use the web-based portal, Closing Insight™, to gather the information and data required to complete the CD. Closing attorneys were encouraged to register with Closing Insight™ immediately.

BB&T promised to provide further communications and training to settlement agents prior to August 1.

Three New Lender Announcements in Early May

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They keep rolling in as August 1 approaches!

town crierWe’re 60 business days away from implementation of TRID, and lenders continue to make announcements about how they will approach the closing process in the new environment. I am committed to keeping South Carolina closing attorneys informed about these continuing revelations, so here is a synopsis of the most recent developments.

Freedom Mortgage announced on May 7 that it will prepare and deliver the borrower’s Closing Disclosure and will employ Closing Insight™ as its method of exchanging information with settlement agents (closing attorneys in South Carolina). Other methods of exchanging information (e-mail, fax) will no longer be used, and closing attorneys were encouraged to sign up for this information portal by visiting www.closinginsight.com.

Chase Mortgage Banking recently repeated that it will deliver the borrower’s CD and will provide a copy of that document in the closing package. The closing attorney will prepare and deliver the seller’s CD and will provide Chase with a copy.

Chase stated it will rely on closing attorneys for transaction numbers such as seller credits, broker’s commissions, seller and purchaser attorneys’ fees, real estate agent bills, external mortgage payoffs, adjustments, prorations, taxes, recording fees and title fees. All of this information should be given to Chase ten days prior to closing.

Chase also stated that it will continue to use encrypted secure email (iSentry and/or Voltage) to provide documents to closing attorneys.

Bank of America announced on May 6 that closing attorneys should register with Closing Insight™, but that registration will not insure a place on BofA’s “Written List of Providers” (WLP). Those interested in being including on the WLP should apply at www.bankofamerica.com/suppliers, but applying does not insure that applicants will be added to the list. BofA representatives will engage prospective candidates for consideration as opportunities for expanding the supplier base become available. Those currently on the WLP do not need to reapply.

BofA also announced that it will absorb the cost of Closing Insight™. To our knowledge, no other lender has made a similar announcement.

It is encouraging that lenders continue to think through their processes and to provide us with additional information. The more knowledge we have up front, the fewer surprises we will experience after August 1. I promise to continue to distribute this news as it is announced to the letstalkdirtsc.com audience.