RREAL IN – The form only title agents see

As most people involved in real estate are aware, the past few years have seen the State of Indiana and the federal government focus on mortgage fraud.

As a part of those efforts, since January 1, 2010, Indiana has required closing agents to fill out an electronic form for every closing involving single-family residential first lien mortgage loans whether purchases or refinances (practically all mortgages). The form was developed through the Indiana Department of Insurance (IDOI) which regulates and licenses title insurance and closing agents and is known as RREAL IN, which stands for Residential Real Estate Acquisition of Licensee Information and Numbers Database for Indiana, and is mandated by Indiana Code 27-7-3-15.5. The purpose is to develop an electronic system for collection and storage of information about persons participating in or assisting with applicable transactions.

Some of the information the RREAL IN form calls for must be provided by persons or companies closing agents don’t deal with, which makes filling out the form problematic. For example, closers rarely see appraisals but must report the appraiser’s name and license number, the appraisal company’s name and license number, the amount the property appraised for, and the appraisal completion date.

Here’s a list of other information the closer must enter:

1. Name & license number of each:
a. salesperson or broker;
b. principal broker;
c. mortgage loan originator;
d. mortgage brokerage company;
e. mortgage loan originator company;
f. title agent (closer); and,
g. title agency;
2. Name of each seller;
3. Name of each buyer;
4. Purchase price;
5. Property description by tax parcel number & street address;
6. Date closing instructions received; and
7. Date of closing.

As mentioned previously, the RREAL IN form is electronic. It’s accessible only online. Unfortunately, it can’t be filled out partially and saved. Long pauses between entries void the form, meaning closers have to start over again if, say, they take a phone call during data entry. Closers chuckle when IDOI says it takes only 2 or 3 minutes to fill out the form; in reality 20 minutes is more likely. Much of the information on RREAL IN is already on the Sales Disclosure Form (another “simple” form title agents have been required to fill out for years), which leads me to wonder whether anyone at state-level considered combining the forms into one. My cynical side says probably not. Of course, double entry adds to the workload and drives up costs. Maybe no one thought of that either.

While we title agents and closers are doing our part in exposing mortgage fraud (we have strict rules on funding, disbursing, anti-flipping, etc.), we hope agencies tasked with combating the problem are looking at data we’re submitting. But if the targets of RREAL IN are fraudsters, why is House Bill 1273 making its way through the 2011 Indiana General Assembly? Curiously, HB 1273 makes RREAL IN applicable to cash transactions. Which raises the question: What is the actual purpose of RREAL IN?

- Morrie Erickson