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#2251423 - 03/29/21 09:00 PM TRID WLSSP - 10% or Unlimited?
Anonymous
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Out of a desire to make our fees and costs more accurate, we now allow for multiple settlement service providers to be selected for the initial LE. Previously, we only allowed fees to be quoted from Company X. However, now we can quote either Company X or Company Y on the LE and the corresponding company will be listed on the written list of settlement service providers. We will only quote fees from either Company X or Company Y on the initial LE; not both.

My question is: what if we list Company X on the initial LE and WLSSP and then the applicant selects Company Y? Since the applicant shopped, would our title fees then be unlimited tolerance? Or would we need to provided a new WLSSP for Company Y and treat the title fees as 10% tolerance?

Thank you.

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#2251425 - 03/29/21 09:12 PM Re: TRID WLSSP - 10% or Unlimited? Anonymous
raitchjay Online
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3. 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).

I don't see how the situation you talk about wouldn't still be covered by the part i have bolded, which would make it an unlimited tolerance item if they chose someone not on the list that you provided.
Last edited by raitchjay; 03/29/21 09:14 PM.
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#2251427 - 03/29/21 09:24 PM Re: TRID WLSSP - 10% or Unlimited? Anonymous
raitchjay Online
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How do you decide when to quote Company X and when to quote Company Y? Just curious, as i don't really understand the point.
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#2251448 - 03/30/21 01:55 PM Re: TRID WLSSP - 10% or Unlimited? Anonymous
Anonymous
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Thank you. I think it makes sense to treat the tolerance as unlimited if the applicant selects anyone besides who is disclosed on the initial LE.

We are still working out how to determine which company to select, but the main drivers will be location of the title company as well as if we know or not that the applicant has already selected a company.

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#2251473 - 03/30/21 04:01 PM Re: TRID WLSSP - 10% or Unlimited? Anonymous
Dan Persfull Offline
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Bloomington, IN
I think it makes sense to treat the tolerance as unlimited if the applicant selects anyone besides who is disclosed on the initial LE............as well as if we know or not that the applicant has already selected a company

So the MLO knows borrower has chosen Company X, in order to have unlimited tolerance they disclose Company Y on the LE.


How to choose the company should be spelled out in black and white and the MLO, or the person completing the LE, should have absolutely no discretion in which company to choose.
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#2251483 - 03/30/21 04:35 PM Re: TRID WLSSP - 10% or Unlimited? Anonymous
Anonymous
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Thanks for the feedback, Dan. Just out of curiosity, what's the risk of allowing MLO discretion in choosing title companies and not having that process spelled out in black and white?

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#2251486 - 03/30/21 04:48 PM Re: TRID WLSSP - 10% or Unlimited? Anonymous
rlcarey Online
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Galveston, TX
That you are playing games to avoid tolerance issues.
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#2251487 - 03/30/21 04:51 PM Re: TRID WLSSP - 10% or Unlimited? Anonymous
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
What Randy said.
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#2251497 - 03/30/21 05:38 PM Re: TRID WLSSP - 10% or Unlimited? Anonymous
Anonymous
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Got it - unfortunately, our MLOs generally don't care about tolerance issues, so I am not worried about that. However, your point is well taken so I'll ensure the procedures are crisp.

Thank you both.

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#2251530 - 03/30/21 09:58 PM Re: TRID WLSSP - 10% or Unlimited? Anonymous
Rocky P Offline
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Florida
Add Fair Lending, if many of the customers without tolerances are minority (race/ethnicity/gender), you could have a policy with disparate impact implications. Many times, minorities are less likely to question terms, conditions, etc.
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#2251535 - 03/31/21 11:49 AM Re: TRID WLSSP - 10% or Unlimited? Anonymous
Anonymous
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Originally Posted by Anonymous
Got it - unfortunately, our MLOs generally don't care about tolerance issues,

Connect it to their compensation package and they will start to care very quickly.

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#2251654 - 03/31/21 08:59 PM Re: TRID WLSSP - 10% or Unlimited? Anonymous
John Burnett Offline
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John Burnett
Joined: Oct 2000
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Cape Cod
You will be a lot better off locking this down up front and definitely not basing the WLSSP on any information provided by the applicant. It's certainly OK to base it on proximity and availability. You can't knowing list anyone not available to perform the service on or for the property in question or for the applicant due to distance considerations.

Get it nailed down so you don't find yourself explaining how the bank just happened to luck out with unlimited tolerances most of the time.
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