I recently attended a RESPA seminar given by Jack Holzknecht. After digesting the class, I began to rethink what we do regarding required service providers. We require the use of a particular flood vendor, credit bureau, and appraiser, as I'm sure most lenders do. We don't
"require" the use of a specific title agent, but 95% of our title work goes to one particular person. In the seminar it was suggested that one way to handle this was to disclose this provider (a local attorney) as required. Here's where it gets tricky, the attorney in question is also a director of the bank. Per the reg we cannot require the use of a provider that we have an affiliated business arrangement with, unless they are our attorney, credit reporting agency or appraiser. This attorney
is our banks attorney, but the service in question is title work. So, can we cover ourselves by disclosing this attorney as required or should we make it clear to the customers that this attorney is not required for title work, although most of our title work goes to him (the other option given at the seminar).