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#2197775 - 11/08/18 04:49 PM
Re: List of Service Providers
Compliance OK
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Junior Member
Joined: Jan 2018
Posts: 31
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Thank you, Truffle and Rlcarey! I should have paid closer attention to the reg.
I appreciate your time in responding!
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#2204272 - 01/29/19 05:05 PM
Re: List of Service Providers
Compliance OK
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Diamond Poster
Joined: Oct 2015
Posts: 1,669
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Another question to add to the list here, figured it might be good to have all the answers in one place  . This may have already been dealt with in another thread, but I couldn't find it. What if the creditor provides multiple providers of a settlement service on their WPL/SSPL - would they all be subject to the 10% tolerance rule? How would that be possible if you only list one on the LE? What costs would you compare against? It just doesn't seem logical, but I don't see anywhere that the Regulation deals with this scenario and they all seem to say if they select a provider off your list, then it's a 10% tolerance rule.
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#2204281 - 01/29/19 05:27 PM
Re: List of Service Providers
Compliance OK
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10K Club
Joined: Jul 2001
Posts: 83,393
Galveston, TX
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That is why listing multiple service providers for a service on your list is sort of like pointing a loaded revolver at your foot and pulling the trigger.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2204378 - 01/30/19 03:20 AM
Re: List of Service Providers
Truffle Royale
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Diamond Poster
Joined: Oct 2015
Posts: 1,669
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So, you would say in your 10% tolerance calculation, you would just match it up with whatever is on the initial LE, regardless of which of the actual service providers was selected to get those estimates from?
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#2204386 - 01/30/19 11:46 AM
Re: List of Service Providers
Compliance OK
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10K Club
Joined: Jul 2001
Posts: 83,393
Galveston, TX
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On the LE you put down $300 for the settlement fee in Section C. You give them a list of multiple settlement service providers. If they choose one of those providers, then the $300 becomes your baseline amount in your 10% aggregate test - regardless of the fact that one of the service providers on your list charges $300 or the one they selected from your list charges $500.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2209806 - 03/28/19 06:31 PM
Re: List of Service Providers
Compliance OK
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New Poster
Joined: Jan 2015
Posts: 8
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Have a couple questions regarding the SSPL. We have been using no list 0% tolerance, and in the process of transitioning to use the SSPL.
First Scenario:
1) We list Settlement Co "A" as our 1 provider, issue the SSPL & LE w/costs from Co "A". Purchase agreement states they want to use Settlement Co "B". Do we re-disclose w/Co "B" costs immediately or just when we get an invoice? Would this then be unlimited tolerance since they didn't choose from our list? If we don't have to immediately issue a new LE but the costs are greater then the assets the borrower has and therefore won't pass underwriting; would it just be better to reissue an LE?
Second Scenario:
2) We order all title work from Settlement Co "C" who was listed on our SSPL. Co "C" invoices for Closing Fee, Wire Fee, Courier Fee; but lists Settlement Co "D" as payee for Lenders Title Insurance and Title Search Fee. Co "D" is not listed on the SSPL. Do we issue an updated SSPL w/Co "D" for the charges which were the same amounts as listed on the LE?
Third Scenario:
3) We set up a standard list for each separate area in which we do business. Pest Inspection Co is listed on the SSPL. A pest inspection is not required. Do we have to remove the Co from the list when we know there will not be any charge associated with the provider?
Thanks!
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#2209808 - 03/28/19 06:45 PM
Re: List of Service Providers
lauraluwho
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10K Club
Joined: Jul 2003
Posts: 17,400
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Have a couple questions regarding the SSPL. We have been using no list 0% tolerance, what is this? If you don't give a list it's 10% tolerance, not zero. Zero only applies on items that cannot be shopped for ever like appraisal and credit report. and in the process of transitioning to use the SSPL.
First Scenario:
1) We list Settlement Co "A" as our 1 provider, issue the SSPL & LE w/costs from Co "A". Purchase agreement states they want to use Settlement Co "B". Do we re-disclose w/Co "B" costs immediately or just when we get an invoice? You don't redisclose just because the borrower picks a different provider. you show the provider's costs on the CD in Section C. Would this then be unlimited tolerance since they didn't choose from our list? yes If we don't have to immediately issue a new LE but the costs are greater then the assets the borrower has and therefore won't pass underwriting; would it just be better to reissue an LE???? You continue to underwrite the loan and list as a condition that the borrower needs 'x' to close. If they don't have it or can't get it, then they will not accept the loan.
Second Scenario:
2) We order all title work from Settlement Co "C" who was listed on our SSPL. Co "C" invoices for Closing Fee, Wire Fee, Courier Fee; but lists Settlement Co "D" as payee for Lenders Title Insurance and Title Search Fee. Co "D" is not listed on the SSPL. Do we issue an updated SSPL w/Co "D" for the charges which were the same amounts as listed on the LE?
Third Scenario: You do not redisclose. You just show the ultimate payee's name on the CD.
3) We set up a standard list for each separate area in which we do business. Pest Inspection Co is listed on the SSPL. A pest inspection is not required. Do we have to remove the Co from the list when we know there will not be any charge associated with the provider?Yes. You can't use canned provider lists. The list must be loan specific so only providers for services actually required on a specific loan can be on the SSPL.
Thanks! [quote][/quote]
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#2209809 - 03/28/19 06:51 PM
Re: List of Service Providers
Compliance OK
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New Poster
Joined: Jan 2015
Posts: 8
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Sorry - we never let them shop before, all charges were in Section B, none in Section C. We are going to now.
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#2209845 - 03/29/19 12:32 PM
Re: List of Service Providers
Truffle Royale
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Junior Member
Joined: Feb 2019
Posts: 40
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Doing as Truffle suggested for #2 could lead to exceptions from your auditors and inquiries from your regulators, although I don't have a better alternative. The fees are supposed to be listed in Section B on the CD if the borrower did not choose/chose the provider on the SSPL, and in Section C if the borrower chose someone not on the SSPL. However, the way the reg is written makes it sound like the fee's location on the CD can be determined based on whether or not the provider listed as the recipient was on the SSPL. The writers of the reg apparently did not understand that the ultimate provider of the service not being listed on the SSPL does not directly correlate with whether the borrower made a choice or not.
So, our auditors (and I presume regulators as well, although I haven't had one bring it up) are only comparing the provider of the service listed on the CD with the SSPL, and we frequently get exceptions when a fee is in Section B and the provider is not on the SSPL. One option we are considering is sending out an informational SSPL as soon as we know this is going to happen, just so there is something in the file for an auditor/regulator to see that would support our position that the fee belongs in Section B because the borrower did not choose.
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#2214601 - 05/30/19 03:21 PM
Re: List of Service Providers
Compliance OK
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Diamond Poster
Joined: Oct 2015
Posts: 1,669
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Also, you would show the estimated costs from "B" in scenario #1 whenever you issue a revised LE, but you do not have to issue a revised LE solely because of this new information. In other words, this isn't a reason why you would need to issue a revised LE, but if one gets issued for another reason, you should update the fee information based on a good faith estimate of the information at your disposal.
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