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#1413906 - 07/12/10 04:27 PM One More Time - Bank Owned Title Company
2old2care Offline
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PA
Going back to my dilemma…. Our Bank owns 49% of a Land Title Company (A). This Title Company is only providing title services. The 51 % owner (non-bank) has another company (B - not affiliated with A) that will be providing settlement service for Land Title Company (A).


Looking at my notes from HUD we should not select an affiliate for a service unless they are on the Service Provider List- so we need to come up with a way to make this work with disclosing Land Title Company (A) providing title services and (B) settlement service provider for Title Company (A) on the SSP.

Is your head spinning yet? So, I the customer could opt to use Company A for the title work but and a different company (Not B) for the settlement services.

How would we set up the proper disclosures? Am I making this harder than it seems?

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Lending Compliance
#1414128 - 07/13/10 01:45 AM Re: One More Time - Bank Owned Title Company 2old2care
jlroberts Offline
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jlroberts
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Ohio
We also have a 49/51 split with a TC and they use one of their affilates to perform the loan closing. This is what we do:

The TC and Settlement Company are the only two companies listed on our required provider list for title services.
We list their fees on the GFE (which are lumped together).
We give the applicant an Affilated Business Disclosure stating our relationship with our TC.

If the applicant choses our TC, they do not have a choice as to which settlement company is used. We code them both as lender select.

Hope that helps.

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#1414157 - 07/13/10 12:42 PM Re: One More Time - Bank Owned Title Company jlroberts
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
Quote:
We list their fees on the GFE (which are lumped together).


JL, are you also listing the fees on the providers list for these two providers? When you separate and use one provider for title services and another for settlement you must list the fees on the providers list.

See Q&A #8 on page 15 of the FAQs.
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#1414178 - 07/13/10 01:03 PM Re: One More Time - Bank Owned Title Company Dan Persfull
2old2care Offline
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Posts: 710
PA
We worked on the provider's list and came up with a unique form to say the least. We will list the Title Company (our partnership) and add a description that they will provide the title work only. Below that we will disclose the company who will provide only the settlement on the loan.

In an area below that we will list the companies that provide both services in one package. This gives the consumer the option. The challange will be if the consumer picks another company for the settlement and our company for the title work. We will have to work closely with the other company.

This seems like a lot of confusion for our income on the "investment."

I beleive listing as I described above we are covered.

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#1414194 - 07/13/10 01:38 PM Re: One More Time - Bank Owned Title Company 2old2care
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
Quote:
We will list the Title Company (our partnership) and add a description that they will provide the title work only. Below that we will disclose the company who will provide only the settlement on the loan.


You need to review the Q&A referenced above if you are not putting fees on the providers list.

If Block 4 services are separated on the Written List of Providers, the associated estimated fee for the component service must be listed next to the header for the list of providers of that service


I also assume you are providing the AfBA disclosure.

9) Q: May a loan originator include an affiliated business on the "written list" of settlement service providers that must be provided with the GFE?
A: Yes. A loan originator may identify an affiliated business on the "written list". The "affiliated business arrangement disclosure" must be provided at the time the GFE is provided to the borrower or at the time of referral, whichever is earlier.


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#1420700 - 07/28/10 01:32 PM Re: One More Time - Bank Owned Title Company 2old2care
2old2care Offline
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Posts: 710
PA
I found the information below on "Attorney Controlled Title Agencies". In it, it states that "an attorney must disclose an AfBA relationship in circumstances in which a RESPA disclosure is not required...e.g., cash or commercial.

Would I substitute "bank" for "attorney" and require our title company to provide the AfBA on commercial loans?

Attorney Controlled Title Agencies:

While the RESPA AfBA disclosure form is probably sufficient for ethics compliance, an attorney must disclose an AfBA relationship in circumstances in which a RESPA disclosure is not required...e.g., cash or commercial transactions, or in which the attorney's interest is less than one percent. Also, although RESPA does not require it, if the attorney requires the use of the adjunct title agency, ethically it would be best to disclose the required use to the client. A disclosure is required "prior to closing" that an attorney is not personally searching the title to property and is, instead, relying on the work product of a title agency (whether an AfBA or not).

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#1420824 - 07/28/10 03:31 PM Re: One More Time - Bank Owned Title Company 2old2care
Dan Persfull Offline
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Dan Persfull
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Posts: 46,761
Bloomington, IN
The above guidance is not any part of RESPA that I have ever seen. Is this some state guidance for attorneys and/or title companies?

For our business purpose loans we provide no RESPA disclosures.
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#1420834 - 07/28/10 03:41 PM Re: One More Time - Bank Owned Title Company Dan Persfull
2old2care Offline
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Posts: 710
PA
Thank you - I will check state regs.

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#2232448 - 03/05/20 06:19 PM Re: One More Time - Bank Owned Title Company 2old2care
bcompliance Offline
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Joined: Sep 2014
Posts: 1,244
We are in the brainstorming stage of creating a bank owned title company. Is anyone willing to share some compliance/risk management considerations to take before going down this path?
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