June 25, 2014
Agent Minimum Capitalization Requirements Go Into Effect July 3
Recently adopted minimum capitalization requirements will become effective on July 3, 2014. However, most agents will not be required to have their minimum capitalization compliance method in place until November 1, 2014.
An important date to look at is whether or not your agency was licensed before or after September 1, 2010. If your agency was licensed before September 1, 2010, the first amount of unencumbered assets must be in place by November 1, 2014. Each subsequent increase must be in place on November 1 of each year until 100% of the required capitalization is reached. (S.1, II. A.)
If your agency was licensed after September 1, 2010, you must attain 100% capitalization by July 3, unless you establish what the rule defines as a "Solvency Account", in which case your first installment is due November 1, 2014.
Another common misunderstanding under these new rules is that if the cash or cash equivalent option is selected as a means of compliance (S.1, I. B.), the money must be held in a separate account. This is not the case. If you maintain an operating account that's always above the required minimum capitalization amount, then you already meet the requirements and do not need a separate account.
TLTA has a comprehensive website
here and a specific guide
here to help you understand the minimum capitalization requirements. Please contact Aaron Day at 512.810.8800 or
[email protected] if you have any questions.
Is Your Basic Manual Up to Date?
If you have a hard copy of the Basic Manual, you need to make sure it is up to date with these new rules. Here's how to check: Section VI - Administrative Rules should include Rules S.1 through S.7. If your Basic Manual does not include these rules and you're already subscribed to TLTA's Basic Manual Online, login
here, and then download Section VI. If you are not subscribed, you can sign up for the remainder of the year for just $33
here.
Wells Fargo Details Disclosure Reform for Settlement Agents
Wells Fargo recently published its June 2014 Settlement Agent Communications. The newsletter includes important information and their perspectives about recent financial reform changes.
Key points covered include:
RESPA/TILA disclosure reform and the new Closing Disclosure
Updated closing instructions now completed
Copies of supplemental recorded documents are needed
Seller credits must be approved prior to document signing
New form required for Service Provider Verification of Identity
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Housing Inventory Jumps 11.8% but First-time Buyers Still Locked Out
HousingWire | June 23, 2014
After plunging throughout 2012 and for much of 2013, and rising only modestly through the beginning of this year, the inventory of all for-sale homes nationwide spiked in May, jumping 11.8% year-over-year according to Zillow. But most of those gains in inventory were made among homes priced in the middle and top one-third of home values, according to Zillow Real Estate Market Reports. The number of homes available for sale in the most affordable price bracket, those homes most sought by first-time homebuyers, fell year-over-year in 28 of the nation's largest metro areas analyzed by Zillow.
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