We are have a major debate on what constitutes a Required Service Provider. Per RESPA 3500.7 (e)(1) If the lender requires the use (see 3500.2,"required use") of a PARTICULAR provider of a settlement service......

My arguement is: If we require insurance, but do not require a particular insurance company then we do not need to list the name of the company as a required provider.

We have a regulator saying that we do need to list the company as a required privider because of the green reference in the reg above.

Which is correct?

If we go with what the regulator says then don't we have to have a database of all insurance companies available in each branch location. This would be impossible. RESPA 3500.7 (e)(4)

I would point the regulator back to the definiton found in 3500.2:

Required use means a situation in which a person must use a particular provider of a settlement service in order to have access to some distinct service or property, and the person will pay for the settlement service of the particular provider or will pay a charge attributable, in whole or in part, to the settlement service.

The key word in the definition that they have conveniently skipped over was "particular". If the bank requires insurance, but does not care who the "particular" provider is, there is no required use.

I agree - if you do not mandate a specified 3rd party, it's not a required svce. provider under RESPA. Even if that party is the only game in town (small town, only one attorney, for example), if you are willing to accept any qualified party, it's not a required svce. provider needing disclosure.

Everyone is right except the examiner! The purpose of the required service provider disclosure is to alert the customer to possible cost fixing. That isn't a concern when the customer chooses the provider. That examiner should read more carefully.

However, if you want ulcers, read up on HUD's proposal to revise the good faith estimate. It's in today's Federal Register.

yes, I just received the Federal Register and it does give you ulcers, just to read. There are 30 questions but many questions within the 30 questions. I first thought this applied to mrg. brokers but it appears it includes all bank lenders as well. Have anyone read yet and what do you think?

Do you have a link?

Here you go...from the BankersOnline Top Stories...

http://www.bankersonline.com/topstory/fedreg/67FR49133.txt