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#2212382 - 04/29/19 09:26 PM
Change from "Not Shop" to "Shop"
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Junior Member
Joined: Nov 2015
Posts: 39
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Can a lender change a service that was initially disclosed as not allowed to be shopped (i.e., Section B and no SSPL) to a service that they will allow to be shopped as a change circumstance borrower request?
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#2212462 - 04/30/19 05:07 PM
Re: Change from "Not Shop" to "Shop"
Truffle Royale
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Junior Member
Joined: Nov 2015
Posts: 39
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After disclosing as not shoppable can you re-disclose and change to shoppable (and then allow customer to shop)?
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#2212463 - 04/30/19 05:12 PM
Re: Change from "Not Shop" to "Shop"
B2B
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10K Club
Joined: Jul 2001
Posts: 83,393
Galveston, TX
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What was the new information that allowed this to happen??
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2212488 - 04/30/19 06:52 PM
Re: Change from "Not Shop" to "Shop"
rlcarey
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Junior Member
Joined: Nov 2015
Posts: 39
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Borrower requests and we make the exception to allow the service to be shoppable.
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#2212492 - 04/30/19 07:19 PM
Re: Change from "Not Shop" to "Shop"
B2B
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10K Club
Joined: Aug 2002
Posts: 47,532
Bloomington, IN
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Did you actually allow the consumer to shop or did you just agree to use the provider they requested?
6. Shopping for a third-party service. For good faith to be determined under § 1026.19(e)(3)(ii) a creditor must permit a consumer to shop consistent with § 1026.19(e)(1)(vi)(A). Section 1026.19(e)(1)(vi)(A) provides that a creditor permits a consumer to shop for a settlement service if the creditor permits the consumer to select the provider of that service, subject to reasonable requirements. If the creditor permits the consumer to shop consistent with § 1026.19(e)(1)(vi)(A) good faith is determined under § 1026.19(e)(3)(ii), unless the settlement service provider is the creditor or an affiliate of the creditor, in which case good faith is determined under § 1026.19(e)(3)(i). As noted in comment 19(e)(1)(vi)-1, whether the creditor permits the consumer to shop consistent with § 1026.19(e)(1)(vi)(A) is determined based on all the relevant facts and circumstances.
IMHO you did not allow the consumer to shop. You simply made a concession on the provider you normally use.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#2212495 - 04/30/19 07:33 PM
Re: Change from "Not Shop" to "Shop"
B2B
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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That's what I think it is, too, Dan.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#2212569 - 05/01/19 04:38 PM
Re: Change from "Not Shop" to "Shop"
B2B
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Junior Member
Joined: Nov 2015
Posts: 39
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When you make a concession does that mean that the service is subject to 10% tolerance or 0% tolerance?
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#2213127 - 05/08/19 06:56 PM
Re: Change from "Not Shop" to "Shop"
B2B
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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You did not allow the customer to shop (even though he did) because you identified the service as one that could not be shopped and did not provide a provider shopping list for the service.
It's a 0% tolerance. The concession doesn't change that.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#2213220 - 05/09/19 03:44 PM
Re: Change from "Not Shop" to "Shop"
B2B
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Platinum Poster
Joined: Jun 2014
Posts: 568
Petersburg, VA
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we're talking title which is 10% tolerance Non-shop items are 0% no matter what they're for.
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#2213233 - 05/09/19 04:26 PM
Re: Change from "Not Shop" to "Shop"
B2B
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Platinum Poster
Joined: Jun 2014
Posts: 568
Petersburg, VA
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Maybe I'm confused, but that sounds like for a fee that you allowed them to shop, they did not shop, so they went with the provider on your list. The fee moves from LE Section C-shop to CD Section B-did not shop, and retains the 10% tolerance.
It sounds like the original LE in this case, they did not allow the customer to shop, so the fee estimate was in LE Section B as a 0% tolerance, not disclosed on the SPL. The FI made a concession to allow the applicant to use a different provider, the fee stays in B and the tolerance stays 0%.
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#2213794 - 05/16/19 04:49 PM
Re: Change from "Not Shop" to "Shop"
B2B
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Member
Joined: Jul 2016
Posts: 73
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I have a situation where we have Title Company 123 on our service provider's list....when doing an LE (for the permanent financing of a construction loan) our staff requested a quote for final title work from a different title company who is NOT on our service provider's list...let's say Title Company ABC. They requested from Title Co ABC because on the initial construction loan the customer shopped and used company ABC--so they automatically followed up with final title work with that company....however we did NOT list them on our Service Provider List this time, and we put the fees Did Not Shop bucket.
So basically to sum up--we said they didn't shop, and they didn't but we got the quote from a title company we don't typically use... but didn't put them on the providers list. How to resolve?
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#2213796 - 05/16/19 05:14 PM
Re: Change from "Not Shop" to "Shop"
B2B
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10K Club
Joined: Jul 2001
Posts: 83,393
Galveston, TX
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If you didn't allow them to shop - why would they be on your list? If you don't allow them to shop - you can use anyone you want to.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2213897 - 05/17/19 03:21 PM
Re: Change from "Not Shop" to "Shop"
B2B
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Platinum Poster
Joined: Jun 2014
Posts: 568
Petersburg, VA
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I've never run into this before, but as I read it, it sounds to me like the only compliance-related error was listing the title fees as "did not shop" on the CD.
If Co. 123 was disclosed (listed on the SPL) but they went with Co. ABC, they did shop (no matter who you used on the back end to come up with your estimated figures).
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#2213909 - 05/17/19 04:19 PM
Re: Change from "Not Shop" to "Shop"
B2B
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10K Club
Joined: Jul 2001
Posts: 83,393
Galveston, TX
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The bank chose the title company on the permanent loan. They chose to use the same title that was involved in the construction loan.
How is that letting the consumer shop???
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2213917 - 05/17/19 04:54 PM
Re: Change from "Not Shop" to "Shop"
B2B
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10K Club
Joined: Jul 2001
Posts: 83,393
Galveston, TX
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This is way to convoluted for me I guess. They didn't allow them to shop on the permanent loan - I therefor have no idea why there is any discussion about a SPL.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2213930 - 05/17/19 06:00 PM
Re: Change from "Not Shop" to "Shop"
B2B
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Platinum Poster
Joined: Jun 2014
Posts: 568
Petersburg, VA
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I read from the post that they got the quote for figures to disclose on the perm LE from the title company that the borrower had previously selected and used for the construction loan. Not that the bank didn't allow them to shop on the perm.
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#2213945 - 05/17/19 07:04 PM
Re: Change from "Not Shop" to "Shop"
B2B
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10K Club
Joined: Jul 2001
Posts: 83,393
Galveston, TX
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I read it and could be wrong but that the permanent loan LE was issued at a later date so it would be a standalone transaction. If that was the case, then it would appear the lender selected the provider on this loan, whether or not the consumer picked the provider on the construction loan.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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