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#2078874 - 05/16/16 08:08 PM Title company fee section C moved to section B
Chocaholic Offline
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Northwest
This is an item we permit borrowers to shop for and provide a list and list our estimate in section C. Having said that we have a situation where the borrower did not choose, so we did and moved the amount to section B on the CD. The amount on the CD is correct and matches what the LE showed in section C... Now however, the section B is out of tolerance more than the 10%.

Reading the regulation commentary indicates:
. Services for which the consumer may, but does not, select a settlement service provider. Good faith is determined pursuant to § 1026.19(e)(3)(ii), instead of § 1026.19(e)(3)(i), if the creditor permits the consumer to shop for a settlement service provider, consistent with § 1026.19(e)(1)(vi)(A). 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), 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). If, however, the consumer chooses a provider that is not on the written list, then good faith is determined according to § 1026.19(e)(3)(iii).

Does this really mean that we have a tolerance issue by moving the same amount from section C to section B when the amount for title is exactly the same and need to make the customer whole ?... perhaps I am over thinking this

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#2078879 - 05/16/16 08:15 PM Re: Title company fee section C moved to section B Chocaholic
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
You should not be a out of tolerance. Check your software to make sure the charges are properly identified. When we first started we had a similar situation when the charges moved from C to B. It was a simple matter of checking a box that showed the service as lender identified.
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#2078909 - 05/16/16 10:23 PM Re: Title company fee section C moved to section B Dan Persfull
Chocaholic Offline
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Northwest
Thank you, this helps!

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#2079338 - 05/19/16 02:55 PM Re: Title company fee section C moved to section B Chocaholic
lauraluwho Offline
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Joined: Jan 2015
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So would the same hold true if we gave the borrower a written provider list, disclosed under Section B instead of Section C; but switched it to Section C on the CloD?

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#2079395 - 05/19/16 05:56 PM Re: Title company fee section C moved to section B Chocaholic
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
If you disclosed a service they cannot shop for and you later decided to let them shop for the service and they chose someone not on the list that would move the service to Sec. C and would not be subject to the tolerance.
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#2079807 - 05/23/16 02:46 PM Re: Title company fee section C moved to section B Dan Persfull
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Midwest
I had a similar situation I posted in (scenario 1) in Post# 2078807.

My instinct says I shouldn't have a tolerance issue for title fees moving from section C on the LE to section B on the CD, but I'm getting a different opinion.

Dan - do you have any thoughts on my scenario?
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#2079816 - 05/23/16 03:06 PM Re: Title company fee section C moved to section B Chocaholic
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,961
Bloomington, IN
I can't add anything additional or different than what John stated in his reply.

Scenario #1 you have a $36.30 cure to provide the borrower.

Scenario #2 you can issue the LE with updated figures but since they are still within tolerance you cannot reset your baseline for comparison purposes.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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