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#592236 - 08/02/06 06:06 PM Affiliated Business Disclosure-Signature??
lstark Offline
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Joined: Nov 2005
Posts: 440
Does the Affiliated Business Disclosure have to be Signed? I cannot locate in the regulation where it stipulates a signature as does the Mortgage Servicing Disclosure.

Also, when should this disclosure be given? The regulation states prior to the referral--not sure what is meant by this. We often do not know within 3 days who will be providing what service. We do disclose required providers within 3 days, but affiliated businesses do not go on the required provider list. Thanks for the help.

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Lending Compliance
#592237 - 08/02/06 06:59 PM Re: Affiliated Business Disclosure-Signature??
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,765
Bloomington, IN
There is no direct requirement in 3500.15 for the disclosure to me signed. However one can argue there is an implied one because 3500.15 states the disclosure is to be given in the format of Appendix D and 3500.15 does not give an option to change it.


The regulation says a person must give the disclosure not later than the time of the referral, not prior to the referral. If you are the lender and require a particular provider then you can make the disclosure at the time of application or you can make the disclosure with the GFE.

I would be giving the AfBA with the GFE, or I wouldn't be using the affiliate.

Also, other than a homeowner insurance affiliate, why wouldn't these affiliated settlement service providers be on your particular provided disclosure or on your bank maintained or approved list? Either way, they would still require the AfBA disclosure.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#592238 - 08/02/06 07:31 PM Re: Affiliated Business Disclosure-Signature??
lstark Offline
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Joined: Nov 2005
Posts: 440
I was under the impression that the bank cannot require the use of an affiliated business provider and if they are on the required provider list the bank is stipulating that they be used. Should they be on the required provider list? Maybe I got a little too deep with that issue??

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#592239 - 08/03/06 04:05 PM Re: Affiliated Business Disclosure-Signature??
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,765
Bloomington, IN
You are correct you cannot require their use.

Listing them on the particular provider list is not saying they must be used. Every appraiser on your approved list, every PMI company you use, every CRA you use, etc. is a particular provider of settlement services. Unless I'm missing something I don't know of any reason they could not be listed on your approved list of providers. But as disclaimer I don't deal with affiliates.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#592240 - 08/03/06 04:47 PM Re: Affiliated Business Disclosure-Signature??
Denny Offline
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Denny
Joined: Jun 2002
Posts: 79
Pa
Dan, I thought a bank can require a borrower to use an affiliate to provide settlement services if the affiliate is an attorney, an appraiser or a credit reporting agency. No other affiliates could be required to be used.

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#592241 - 08/03/06 05:12 PM Re: Affiliated Business Disclosure-Signature??
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,765
Bloomington, IN
That is also true, but I don't think lstark is referring to such an affiliate. And I'm not speculating.

3500.7 explains fairly well what you can and cannot do in respect to particular providers.
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The opinions expressed are mine and they are not to be taken as legal advice.

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