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#2242660 - 09/17/20 10:38 PM Service Provider List - Show each TItle Fee?
Tarhe Offline
Diamond Poster
Joined: Nov 2006
Posts: 1,271
California
Does the Service Provider List need to itemize each title fee and list a service provider for each title fee?

We list two title companies for title fees, but do not itemize each possible title fee and a title company next to it?

(Examiner citing us for that?)

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TRID - TILA/RESPA Integrated Disclosures Rule
#2242661 - 09/17/20 11:09 PM Re: Service Provider List - Show each TItle Fee? Tarhe
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,651
Galveston, TX
3. Written list of providers. If the creditor permits the consumer to shop for a settlement service it requires, § 1026.19(e)(1)(vi)(C) requires the creditor to provide the consumer with a written list identifying at least one available provider of that service and stating that the consumer may choose a different provider for that service. The settlement service providers identified on the written list required by § 1026.19(e)(1)(vi)(C) must correspond to the required settlement services for which the consumer may shop, disclosed under § 1026.37(f)(3). See form H-27 in appendix H to this part for a model list.
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#2242663 - 09/17/20 11:37 PM Re: Service Provider List - Show each TItle Fee? Tarhe
Tarhe Offline
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Joined: Nov 2006
Posts: 1,271
California
Thank you!

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#2242768 - 09/20/20 08:00 PM Re: Service Provider List - Show each TItle Fee? Tarhe
Love Cruising Offline
Member
Joined: Dec 2019
Posts: 97
We were cited for having listed servicers that were not approved by our BOD. If a consumer selected a servicers listed Not approved for us to use as settlement agents, would that servicer still have a tolerance?

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#2242770 - 09/21/20 11:17 AM Re: Service Provider List - Show each TItle Fee? Tarhe
rlcarey Offline
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rlcarey
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Posts: 79,651
Galveston, TX
Who the heck is telling you that your mortgage loan service providers have to be approved by your board? An appraiser? Sure. Otherwise there is no such requirement. I would be asking for their support of that position.
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#2262205 - 11/05/21 07:23 PM Re: Service Provider List - Show each TItle Fee? Tarhe
Tarhe Offline
Diamond Poster
Joined: Nov 2006
Posts: 1,271
California
We viewed a demonstration from our software provider for automating how we get title fees from our preferred provider. A couple of questions arose:

1) The software will provide a fee for Title Insurance but included in that would be related fees like the Notary Fee - so we'd be disclosing a $500 title fee on the LE (which is $400 for title and $100 for Notary). We would no longer disclose Notary Fee as a separate item on the LE or Service Provider List. Are we required to itemize or is it okay to lump those 2 fees into one?
2) The software's site for generating this information is not located within our state (we are in CA, the vendor is in TX). Our preferred provider is a national title company and we previously disclosed their headquarters in CA for contact information. (We do not lend out of state). The vendor is saying that the hundreds of customers he has in CA have had no problem disclosing a TX title company. My understanding is that we can disclose the headquarters, or the local address of the provider where the consumer or property is located.

Reference:
Level of itemization. The CFPB understands that there is uncertainty as to the extent a creditor must itemize settlement services on the LE and Written Service Provider List (WLSP). In TRID 2.0, the CFPB clarified that creditors need not include all settlement services that may be charged to the consumer, but must include at least those settlement services the creditor required for which the consumer may shop. Comment 19(e)(1)(vi)-4. For example, if a creditor requires the consumer to purchase lender’s title insurance and the creditor permits the consumer to shop for lender’s title insurance, the creditor must disclose the lender’s title insurance on the LE and at least one title insurance company on the WLSP. However, the creditor does not have to provide a detailed breakdown of all related fees that are not themselves required by the creditor but that may be charged to the consumer such as a notary fee, title search fee or other ancillary and administrative services needed to perform or provide the settlement service the creditor requires. The CFPB thinks all detailed breakdown of all settlement services would be information overload for the consumer and thereby hinder the consumer’s ability to shop. 82 FR at 37674.

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#2262212 - 11/05/21 08:46 PM Re: Service Provider List - Show each TItle Fee? Tarhe
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,651
Galveston, TX
Bottom line is if you do not require notary services for your loan closings, but the title company does, you do not technically have to list a charge for notary services. Myself, I have never seen a real estate loan closed that did not require documents to be notarized. So I never really understood that paragraph. This is your preferred provider after all - so tell me how these charges are not a requirement of the loan closing if the borrower selects your provider. Can they opt out of these charges? It just makes no sense in the real world and good luck convincing examiners and auditors otherwise.

Even if you decide you do not need to disclose the notary fee, you cannot lump that fee into the title insurance charge. You need to go up one paragraph from your quotation you provided:

"In pursuit of the original purpose to minimize confusion and compliance burden the Bureau believes it can achieve this purpose by revising comments 19(e)(1)(vi)-2 and -4 to clarify the current itemization requirements under § 1026.19(e)(1)(vi) instead of introducing a new disclosure scheme. "

Disclosing a combined charge for a title policy and a notary fee either has to be itemized if required or the notary fee can be left off if you so desire. But disclosing a combined fee for the cost of the title insurance policy is not in good faith.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2262214 - 11/05/21 08:58 PM Re: Service Provider List - Show each TItle Fee? Tarhe
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,651
Galveston, TX
"The vendor is saying that the hundreds of customers he has in CA have had no problem disclosing a TX title company."

You have to disclose a title company that is reasonably available to the customer. Even if you are disclosing a nationally based title company, you cannot tell me that an office is available that can reasonable be reached by every applicant you might have. In Texas a national title company office might be 100 or more miles away. Also, is your customer really going to pick up the phone and call your preferred title company if you give them contact information from Texas? I would say that borders on UDAAP so that you can say they did not select your preferred provider and give you an unlimited tolerance.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2262216 - 11/05/21 09:11 PM Re: Service Provider List - Show each TItle Fee? Tarhe
Tarhe Offline
Diamond Poster
Joined: Nov 2006
Posts: 1,271
California
Great feedback - thank you so much!!

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#2262739 - 11/19/21 06:59 PM Re: Service Provider List - Show each TItle Fee? Tarhe
Tarhe Offline
Diamond Poster
Joined: Nov 2006
Posts: 1,271
California
Follow up. So, if we decide not to disclose the Notary Fee (because not a "lender requested charge" - per management!), then our Loan Estimate will not include the Notary Fee at all? Escrow will still collect it (it will be on the final settlement statement). Doesn't this throw off our cash-to close then?

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#2262754 - 11/20/21 07:47 AM Re: Service Provider List - Show each TItle Fee? Tarhe
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,651
Galveston, TX
Yes - if you know your preferred provider is going to charge the fee regardless if you require it or not, how is leaving it off of the LE in good faith?
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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