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#174843 - 03/30/04 06:31 PM RESPA
Anonymous
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After reading RESPA, I am more confused than when I started! Therefore HELP! Bank A has a Director that is a majority owner in a Title Company. I believe that RESPA requires that whenenver the Title Company performs title work (search) the AFBA must be delivered but only if the Title Company is a required service provider. However, I am hung up on the "required service provider." It would appear that RESPA would prohibit the Title Company from being a required service provider given the Directors ownership interest in the Title Company. The bank does not "require" the use of the title company but uses it the majority of the time. We do have a list of five or more service providers and provide this information on the GFE. What actually constitutes "required service provider" and would a title company fall under the "attorney" exception for required use?

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#174844 - 03/30/04 07:10 PM Re: RESPA
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Don't confuse a required service provider with a particular service provider. A required service provider is any provider that you require their service in relation to the transaction. A particular service provider is a specific provider that you require their use, therefore this title company cannot be a particular service provider.

You should be giving the AfBA notice to all applicants referred to the title company.

No, the title company does not fall under the attorney exception.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#174845 - 03/30/04 09:08 PM Re: RESPA
Anonymous
Unregistered

Is the test for required service provider only that the bank REQUIRES the use of a particular service provider and not that a particular service provider provides the majority of the work? So, do you agree then that the bank could use the title company provided that the bank gives the AFBA and the bank does not list the title company as a required service provider on the GFE?

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#174846 - 03/30/04 09:48 PM Re: RESPA
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Quote:

So, do you agree then that the bank could use the title company provided that the bank gives the AFBA and the bank does not list the title company as a required service provider on the GFE?




As long as you give the AfBA and do not require the applicant to use that particular title company, I see no reason why they cannot be used. If they are part of your service providers, why leave them off your list? As long as you give the AfBA notice and you do not "mandate" their use you should be fine.

I look at a "required service provider" as appraisers, credit bureaus, PMI companies (if applicable), etc. They are service providers that we require their service in relation to a transaction.

A "particular service provider" is a required service provider that we say you have to use this provider, there is no other choice.

If anyone disagrees with my assessment please chime in.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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