Well, if it was me, if the title company collected money from the borrower for a fee of theirs that was not on the CD, then I am sure of a couple of things. I would make title company eat the fee, if this is the first you heard about it. Review your closing instructions, as I am sure it specifically tells them that if the CD is inaccurate in anyway, they need to notify you immediately. I am also sure there is a coordinated effort between the title company and the lender prior to the issuance of the final CD for closing with the title company for a pre-closing confirmation of settlement charges. If this is not true, then you need to review your closing processes.
But yes, charging the borrower for the fee is not proper, as while you may have a 10% tolerance if they picked your service provider, any fee charged that is not on a good faith basis is a zero tolerance and adding a new fee at closing is not in good faith considering the facts. If they push back, you might tell them you are going to revisit your preferred provider list.
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