Also, in light of this bit

Assuming we go to a system of giving a list per county, in cases where a borrower in County A is purchasing a property located in County B, for which county should the service provider list be given?

To me, 'service' is a one time thing. Ex: closing, title work, survey, etc.
Home owners insurance is a constant throughout the life of the loan the cost of which fluctuates annually.
So no, I don't see that a 'service provider list' would apply to HOI.

I like that answer.....hope the regulators do too.

Any LaserPro users aware of whether you can print a provider list from LaserPro on a transaction by transaction basis?

Practically, based on the fact that the section you quoted says OR, not and, I'd say pick one and be consistent and you should be ok.
Realistically, most services that you're going to list a provider for work based on where the property is located, not where the borrower lives.
Therefore, unlike the home ownership counseling, I'd give the list of providers for where the property is located.

Definitely...otherwise the cost could be MUCH higher than planned for.

How detailed is everyone getting with the bold language below? It specifically states they must provide services where the consumer or property is located. Is the interpretation of the "where the consumer or property is located" statement that we must list a service provider that is in that specific county? Most service providers will service multiple counties.


A perfect example would be a large metropolitan county and the outlying counties surrounding that area (for this example assume they are contigous). Assume you have a title company that only has an office in the metropolitan county, but they will sell title insurance in the surrounding counties and have done this in the past. Do you feel it would be acceptable to list just the title company in this example that is in the large metropolitan county that will service the nearby counties or is everyone of the stance this is addressed on a county by county basis?

Similarly, a creditor does not comply with the availability requirement in § 1026.19(e)(1)(vi)(C) if it provides a written list consisting of only settlement service providers that are no longer in business or that do not provide services where the consumer or property is located.

You can create provider lists and select a certain list on a transaction by transaction basis now in LaserPro; however, for the TRID applicable transaction, I don't see that option yet. I believe their intention is to incorporate a list in the same manner, so I'm hoping it'll come through on the next update (haven't published the release notes yet).

Where will the closing be held? If you use this company, will customer be obligated to travel for a closing? I think impact must be assessed (and should have been all along). It has to make sense.

I've been looking for the last hour in LaserPro where the box is to select "print service provider list" and i can't find it. I know where it is in today's RESPA world....the GFE screen. But i see no such checkbox on the Loan Estimate screen. How are you getting the Service Provider List to print in LaserPro?

Sorry...just re-read your post....i guess you're asking the same thing i am...it appears LaserPro doesn't have that capability loaded yet.

As for listing Homeowner's Insurance on the list of providers, the Preamble clarifies that it's not required:

"On the question of listing hazard insurance providers on the written list of providers, hazard insurance would not have been among the services that the creditor would have been required to identify pursuant to §1026.37(f)(3). Therefore, hazard insurance providers do not need to be listed on the written list of providers."

I don't know a lot about it, but we had a loan processor go to the LaserPro User meeting and I believe they said that the service provider lists can be built now, but the functionality of choosing a list during the transaction will come with the next update. We haven't gotten to building that yet, so I don't know details.

Thanks for that citation Diane. And thanks for the LaserPro info Gioia.

We had previously reached out to D+H (Laser Pro) and were told that the Service Provider List would be included in the June 30th release.

Rdy2Retire - That is what we heard, as well.

You can't be accused of steering if you meet the "impose reasonable requirements" test (see below). For practical purposes any service provider you pick should be your designated Tier 1 settlement service provider and with that designation make sure that the settlement service provider has the best insurance/policies/procedures/and certifications in that state. Tier 1 settlement agents for example should have a SSAE SOC 1 TYPE 1 Certification at a minimum and post 6/16 they should have attained a SSAE SOC 2 TYPE 1 Certification. Those are reasonable requirements for TIER 1 Vendors. If you have 50 settlement agents with differing standards then this could get you into trouble because you will have to segregate those vendors into Tier 2 or Tier 3 due to not meeting the reasonable requirements test of a Tier 1 settlement agent.

Official Interpretation to 19(e)(1)(vi)
19(e)(1)(vi) Shopping for settlement service providers.
• 1. Permission to shop. Section 1026.19(e)(1)(vi)(A) permits creditors to impose reasonable requirements regarding the qualifications of the provider. For example, the creditor may require that a settlement agent chosen by the consumer must be appropriately licensed in the relevant jurisdiction. In contrast, a creditor does not permit a consumer to shop for purposes of § 1026.19(e)(1)(vi) if the creditor requires the consumer to choose a provider from a list provided by creditor. The requirements of § 1026.19(e)(1)(vi)(B) and (C) do not apply if the creditor does not permit the consumer to shop consistent with § 1026.19(e)(1)(vi)(A).

The point being made was not how you determine who to put on your list. The point being made was that if you gave the applicant a list of 50 providers and required them to pick one from the list, you were not allowing the applicant to shop:

"In contrast, a creditor does not permit a consumer to shop for purposes of § 1026.19(e)(1)(vi) if the creditor requires the consumer to choose a provider from a list provided by creditor."

You might not be steering by having a qualified list...but from the FI's POV, we have to worry about the point Randy is making in order to properly account for tolerance issues. Having a hard-fast list of 50 basically puts you in a 10% no matter which one of the 50 they choose and with varying prices...you are likely to end up in a pickle.

About the only good way that I know of to stay within guidelines is have a list of one if you allow shopping...and know that one's fees for a particular transaction OR require a specific SA and know their fees for a particular transaction.

We serve several small communities which only have 1 small local, settlement service provider. If that provider is selected on the vast majority of our loans (nearly 95% last year) will providing a list with this provider allow us a 10% tolerance?

I guess what I am asking is if there is only one local provider, is a list even worth our time?

We serve several small communities which only have 1 small local, settlement service provider.

Are you saying you have one settlement service provider that services several small communities or are you saying you have several small communities that have only one local service provider located within the community?

You cannot allow the applicant to shop for a service and not provide them a list with at least one service provider listed, if that is what you are asking. That alone is a violation.

Sorry let me try to clarify.

Are you saying you have one settlement service provider that services several small communities or are you saying you have several small communities that have only one local service provider located within the community?

Both, kind of.

Branch 1 & 2 are 30 miles apart and have only one local service provider - Title Company A

Branch 3,4, & 5 are 45 miles apart and have only one local service provider - Title Company B

We would love to give them the ability to shop, but realistically they will be selecting the provider off of our list almost all of the time.

There is no requirement that there be multiple providers in any area. Either way - you could tell them they have to go with these providers - you still would be stuck with 0% tolerance. If you tell them they can shop and they do happen to choose another provider, you are off the hook.

So we will give them the list and allow them to shop. History shows that 5% of the time they will shop and we will have unlimited tolerance.

The other 95% of the time when they select the single provider on our lsit, would you consider us subject to 0% tolerance?

If they choose the provider on your list, yes - those charges are subject to 0% tolerance.