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#1639147 - 12/14/11 09:52 PM Seller requested change = Changed Circumstance
mzachau, CRCM Offline
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mzachau, CRCM
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San Francisco
We have a borrower that is purchasing an REO property from another Bank. The Bank (as the seller) initially elected to use title company A, but now has requested that title company B be used.

HUD's April 2010 FAQ states that if the borrower elects a service provider not on the Bank's provider list, but later changes and requests to use a provider that is on the list; this is not a changed circumstance.

If the seller changes the title company, is it OK to redisclose?

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#1639160 - 12/14/11 10:02 PM Re: Seller requested change = Changed Circumstance mzachau, CRCM
#Just Jay Offline
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Putting aside for a moment seller selecting title company...

If the company selected in not included on your 'shopping list' of providers, then you will not be held to a tolerance... what do you gain by redisclosing?

Either way, IMO, no, not acceptable to redisclose.
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#1639173 - 12/14/11 10:20 PM Re: Seller requested change = Changed Circumstance #Just Jay
mzachau, CRCM Offline
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mzachau, CRCM
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I apologize, what I meant to write was the changing of the escrow company, not title company.

The part of the FAQ's I do not fully understand is, if the borrower elects to change settlement companies after the GFE has been issued (say from a non-listed provider to a listed provider) this is not a changed circumstance and a revised GFE may not be issued. How does this make sense? The Bank is moving from a position of "no tolerance" to "10% tolerance", all because of the borrowers election to change providers.

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#1639176 - 12/14/11 10:21 PM Re: Seller requested change = Changed Circumstance mzachau, CRCM
mzachau, CRCM Offline
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mzachau, CRCM
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San Francisco
I do not know specifics as to why the seller is making determinations as to which providers the borrower must use. All I was asked was - is this a valid changed cicumstances. However, it is something I will be looking into.

thank you Just Jay

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#1639178 - 12/14/11 10:38 PM Re: Seller requested change = Changed Circumstance mzachau, CRCM
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When we compiled our list of providers we made sure that the charge that populates the GFE was a "worst case" fee. In other words, we disclose the highest fee of the vendors on our provider list.

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#1639183 - 12/14/11 10:30 PM Re: Seller requested change = Changed Circumstance mzachau, CRCM
#Just Jay Offline
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Originally Posted By: mzachau, CRCM
I apologize, what I meant to write was the changing of the escrow company, not title company.

The part of the FAQ's I do not fully understand is, if the borrower elects to change settlement companies after the GFE has been issued (say from a non-listed provider to a listed provider) this is not a changed circumstance and a revised GFE may not be issued. How does this make sense? The Bank is moving from a position of "no tolerance" to "10% tolerance", all because of the borrowers election to change providers.


But if they are electing to change to one of your recommended providers, this again really shouldn't make a difference... your intitial GFE quote should be based on what your providers will charge for that scenario, not what someone you do not recommend would charge. Hence, why you recommend them in the first place.
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#1639187 - 12/14/11 10:32 PM Re: Seller requested change = Changed Circumstance #Just Jay
mzachau, CRCM Offline
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mzachau, CRCM
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San Francisco
Great point!

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#1639194 - 12/14/11 10:39 PM Re: Seller requested change = Changed Circumstance mzachau, CRCM
#Just Jay Offline
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#Just Jay
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Cheeseheadland
wink
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#1639247 - 12/15/11 03:24 AM Re: Seller requested change = Changed Circumstance #Just Jay
rlcarey Online
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Galveston, TX
"I apologize, what I meant to write was the changing of the escrow company, not title company."

What is the difference? What does an "escrow company" do and why would the seller have any say in the matter?
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