Posted by Alex Oh on 9/26/06 10:18am
Msg #148526

Disbursement?

Hi, did my first signing yesterday and am wondering about disbursement checks?

It says "all disbursement checks must be delivered by closing agent directly to payee." on a HUD-1 statement. Does that mean the borrower leaves a payment with me that I send back to the lender?

Reply by Jersey_Boy on 9/26/06 10:28am
Msg #148528

You are not the closing agent, so you have nothing to worry about. Ocassionally you will take a check from a borrower and return it to the title company. You will usually be instructed in YOUR instructions on what to collect and how to collect it.

Disbursement = money coming from title and/or lender to any payee.
Payment/Deposit= coming from the borrowers to the TC or Lender.

Reply by Becca_FL on 9/26/06 10:32am
Msg #148529

>>>Does that mean the borrower leaves a payment with me that I send back to the lender?<<<

No. The only time you would collect a check from the brw is if the brw shows funds due in line 1601 or line 303 on the HUD.

>>>"all disbursement checks must be delivered by closing agent directly to payee."<<<

The TC (closing agent) must comply with RESPA and disburse funds as indicated on the HUD.

Reply by Charles_Ca on 9/26/06 11:21am
Msg #148536

Re: Disbursement? Question Becca, I have never been stiffed

for my fees but if I were, could that be construed as a violation of RESPA? I don't know if there is a collection angle here or not? Since the HUD shows a line for Notary Fees and the notary is the only one who is licensed to perform the notary service, not the SS, in my convoluted mind we should be getting paid and then paying the SS a fee (a small fee) for finding us the work. Just kind of thinking out loud here. Why would someone in their right mind contract with someone who is not capable of performing the job: unlicensed SS. When you get a plumbing job done you go to a licensed plumber, when you need to build a house you go to a licensed contractor, when you need legal help you go to a licensed attorney, notice a trend here? I've never understood the wholesale acceptance of the SS as a necessary party in this transaction unless its laziness.

Reply by Linda_H/FL on 9/26/06 11:29am
Msg #148537

Re: Disbursement? Question Becca, I have never been stiffed

I had this thought when my name appeared on the Notary line - is it not a RESPA violation to not cut my check immediately on disbursement?

Reply by Charles_Ca on 9/26/06 1:03pm
Msg #148565

Re: Disbursement? Question Becca, I have never been stiffed

I don't believe that not cutting a check immediately for you wold be a RESPA violation. However I do believe that a title company working with a signing service and not disclosing that they have a relationship with the signing service and then listing the notary on the disbursement line and paying the sigining service would be a specific violation of RESPA. RESPA is one of the reasons that title companies stopped all the goodies they used to provide to real estate agents because of RESPA violations. A lot of people just take things at face value and never analyze the implications. Of course as my friend the attorney says its a "lot easier to ask for forgiveness than it is to ask for permission", but ignorance of the law is no excuse!

Reply by Becca_FL on 9/26/06 2:34pm
Msg #148583

Re: Disbursement? Question Becca, I have never been stiffed

This has been discussed before and both sides were argued very well, but the only time (IMO) RESPA comes into it is if you are NAMED on the HUD, ie: Notary Fees to Rebecca Fair.

I don't have the time to search, but Paul argued this and posted some references some time ago...maybe two years or so.

Reply by ReneeK_MI on 9/26/06 3:37pm
Msg #148595

Re: Disbursement? Question Becca, I have never been stiffed

Correct you are, Becca. If a fee is paid to a third party named on the Hud - then the check must be cut to that third party as named, paid as shown on Hud.

Most Huds show a fee on the Notary line, but do not NAME anyone. The Notary line is within the 'block' of lines that belong to the Settlement Agent. So, unless there is a specific name shown on that line for that fee - that money is a fee being collected by the Settlement Agent.

The one thing few people know or notice is that the Notary fee, THAT LINE (I'm not looking up the number) is a NON-APR line. In that line should ONLY go the amount of money collected specific to notarizations - NOT outside closing fees or SS fees. But the people that work up huds aren't always knowledgeable about that, and you see lump sums there all the time. Some day though - mark my words - that'll hit the fan. Padding the non-apr line keeps the TIL from being accurately disclosed - and that's a biggee. It also keeps the Section 32/High Cost Loan worksheet from being accurate. Another biggee. The only fees that could correctly be place in the Notary fee on THAT line would be the fees allowable by that state for ONLY the notarizations.