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#2067496 - 03/04/16 01:33 PM Title Ins and Shopping Lists
#Just Jay Online
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#Just Jay
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Cheeseheadland
We are getting so many conflicting interpretations on this item from our vendors, investors, our title companies and even national consultants, and we still seem to be trying to nail this down:

Bank allows the borrow to shop for title (section C on LE). Borrower chooses our recommended provider (moves to section B on CD). Since the borrower was allowed to shop and choose our recommended provider, are those title charges subject to 10%, or 0%.

I know this shouldn't be hard, but I am amazed at how this one keeps bouncing back and forth.
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TRID - TILA/RESPA Integrated Disclosures Rule
#2067497 - 03/04/16 01:38 PM Re: Title Ins and Shopping Lists #Just Jay
RR Joker Offline
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The Swamp
My understanding is that even though you move it to 'did not shop', it remains at 10% because in fact, you didn't mandate a specific provider...they could have (and may have) shopped.
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#2067505 - 03/04/16 01:47 PM Re: Title Ins and Shopping Lists #Just Jay
Jerod Moyer Offline
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Jerod Moyer
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If you allow them to shop list the service in Section C of the LE and provide a list with at least one provider. If they select the provider from your list then list the service in Section B of the CloD because according to TRID they did not shop. Shopping as it relates to the CloD means the borrower picks a a provider not listed by the bank. The tolerance related to your listed provider will be 10% unless the listed provider is an affiliate under TRID then it's 0%.
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#2067511 - 03/04/16 02:15 PM Re: Title Ins and Shopping Lists #Just Jay
#Just Jay Online
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#Just Jay
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Cheeseheadland
I would concur, but I have a large investor as well as FAQs from a large Comply consulting firm stating otherwise. So frustrating.

Throwing it to our state bank legal association... their word will be our final word.
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#2067522 - 03/04/16 03:04 PM Re: Title Ins and Shopping Lists #Just Jay
Jerod Moyer Offline
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Jerod Moyer
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Sioux Falls, SD
Interesting but I don't understand how this is even something that is up for debate:

1026.38(f)(2) Services borrower did not shop for. Under the subheading “Services Borrower Did Not Shop For” and in the applicable columns as described in paragraph (f) of this section, an itemization of the services and corresponding costs for each of the settlement services required by the creditor for which the consumer did not shop in accordance with § 1026.19(e)(1)(vi)(A) and that are provided by persons other than the creditor or mortgage broker, the name of the person ultimately receiving the payment for each such amount, and the total of all such itemized amounts that are designated borrower-paid at or before closing. Items that were disclosed pursuant to § 1026.37(f)(3) [LE Section C] must be disclosed under this paragraph (f)(2) if the consumer was provided a written list of settlement service providers under § 1026.19(e)(1)(vi)(C) and the consumer selected a settlement service provider contained on that written list.

OSC 19(e)(3)(ii) #3

...Section 1026.19(e)(3)(ii) provides that if the creditor requires a service in connection with the mortgage loan transaction, and permits the consumer to shop for that service consistent with § 1026.19(e)(1)(vi), but the consumer either does not select a settlement service provider or chooses a settlement service provider identified by the creditor on the list, then good faith is determined pursuant to § 1026.19(e)(3)(ii), instead of § 1026.19(e)(3)(i). For example, if, in the disclosures provided pursuant to §§ 1026.19(e)(1)(i) and 1026.37(f)(3), a creditor discloses an estimated fee for an unaffiliated settlement agent and permits the consumer to shop for that service, but the consumer either does not choose a provider, or chooses a provider identified by the creditor on the written list provided pursuant to § 1026.19(e)(1)(vi)(C), [b]then the estimated settlement agent fee is included with the fees that may, in aggregate, increase by no more than 10 percent[ for the purposes of § 1026.19(e)(3)(ii).
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#2067528 - 03/04/16 03:10 PM Re: Title Ins and Shopping Lists #Just Jay
ahou Offline
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ahou
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I'm with Jerod. Seems very clear.
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#2067531 - 03/04/16 03:22 PM Re: Title Ins and Shopping Lists #Just Jay
Compl101TX Offline
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Compl101TX
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W. TX
This sounds similar to when the title company told us to move the fees from section B to section C, because "that's how we were told to disclose it."

I did try to explain to them why they belong in section B, how we have this list of providers that they are in...

Your situation is different because of the investor, but most of the time the title companies are wrong.
Last edited by Compl101TX; 03/04/16 03:22 PM. Reason: spelling
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#2067775 - 03/07/16 02:52 PM Re: Title Ins and Shopping Lists #Just Jay
Banker 1025 Offline
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For what it's worth we are treating this as a 10% tolerance item: we gave them the opportunity to shop, they chose the provider we identified (who is not an affiliate) on the written list of providers, so it's 10%. When I get pushback from an attorney/title company I just copy and paste from the Reg and the commentary and provide the backup for our process. In the end we have to answer to our primary regulators and ultimately the CFPB so we can't let the title companies dictate our procedure for compliance with Reg Z. I just wish they understood what we are up against when they make these decisions.

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#2067801 - 03/07/16 03:38 PM Re: Title Ins and Shopping Lists #Just Jay
John Burnett Offline
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And you cannot let investors control when it comes to an issue of complying with the regulation, when the investor is wrong. It's one thing to have an investor who insists on using the optional signature lines for confirmation of receipt of the Loan Estimate and Closing Disclosure. You won't violate the regulation by toeing the investor's mark on that question. But when an investor tells you to place a service and cost in Section C when you know it belongs in B, you have to insist on complying with the regulation.
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