Hello, we have a board member that owns a title company. Is this consider an affiliated business agreement if we list her company on our written service providers list

Yes.

7. Relation to RESPA and Regulation X. Section 1026.19 does not prohibit creditors from including affiliates on the written list required under § 1026.19(e)(1)(vi)(C). However, a creditor that includes affiliates on the written list must also comply with 12 CFR 1024.15. Furthermore, the written list is a “referral” under 12 CFR 1024.14(f).

And if they select them, you are looking at 0% rather than a 10% tolerance.

Thank you.... so just for knowledge even if say she has no ownership in the bank just basically on the board correct? IF we decide to put another title company on the list and the borrower chooses to use "board members" title company do we still have to give out the affiliated business arrangement disclosure?

Yes. Refer to section 2602(8) of the Act itself.

From 1024.15
c) Definitions. As used in this section:
Associate is defined in section 3(8) of RESPA (12 U.S.C. 2602(8)).

Control, as used in the definitions of “associate” and “affiliate relationship,” means that a person:
(i) Is a general partner, officer, director, or employer of another person

Thank you Dan! Sorry for all the questions i am just new to the ABA with the new bank i am at..... So say we have a different title company on our providers list and the customer chooses to use the board member title company and we provide the ABAD this does not make us subject to the 0% tolerance because they are not on our list correct?

I am sorry to bring this back up, however our auditing company has indicated that we only need to provide the ABA agreement and that the tolerances does not apply. Basically this is what was said.

This issue actually came up when I did your REG Z/RESPA audit last year. The conclusions we came to are:
• You do have an affiliate Business Relationship which requires the disclosure under RESPA
• You do not have an affiliate under the TRID tolerance rules. Therefore, those title fees would be handled the same as any other title company. (ie...if they are on your list of providers and they select them their fees go in box B and they are subject to the 10% tolerance in aggregate)

can someone please let me know if this is correct?

For TRID purposes it does not appear the director's title company would be an affiliate.

Official Interpretation

19(e) Mortgage loans—Early disclosures.

1. Affiliate. The term “affiliate,” as used in § 1026.19(e), has the same meaning as in § 1026.32(b)(5).
(5).


1026.32(b)(5)

Affiliate means any company that controls, is controlled by, or is under common control with another company, as set forth in the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.).

Hello,

A question surrounding this topic. One of our bank's directors (non-shareholder) is also residential real estate developer, and the Bank is considering the placement of a click-through on the developer/community's site to refer potential mortgage applicants to the Bank. There are no fees paid to the developer or community for clicks/applications/loans closed, etc., and no special treatment will be given to applicants (rates/fees, etc.) that get introduced to the Bank in that manner. However, given the director's relationship/interest to both the Bank and developer, my concern pertains to potential self-dealing provisions that would need to be addressed or documented?

Thanks in advance.

considering the placement of a click-through on the developer/community's site to refer potential mortgage applicants to the Bank.

The director/developer is giving the bank free advertising. If Federally Related Mortgage Loans can be referred to the bank through this link you may want to review RESPA's Sec. 8.