Skip to content
GeoDataVision
Thread Options
#612677 - 09/13/06 03:16 PM Flood Determination Company Req. Provider on GFE
johnsbb Offline
Junior Member
Joined: Apr 2006
Posts: 30
The bank uses one flood determination company for flood certs. for all r/e secured loans. We were told we had to list them as a required provider on the GFE even though the customer pays the bank who then pays the flood determination company. Does this also hold true for our credit bureau company we use to pull their credit report?

Return to Top
Lending Compliance
#612678 - 09/13/06 03:35 PM Re: Flood Determination Company Req. Provider on GFE
JSD Offline
Platinum Poster
JSD
Joined: Oct 2000
Posts: 512
USA
YES

Return to Top
#612679 - 09/13/06 03:40 PM Re: Flood Determination Company Req. Provider on GFE
ahou Offline
Power Poster
ahou
Joined: Aug 2002
Posts: 3,094
If your bank requires the use of a particular settlement service provider & imposes any part of the cost on the borrower, you must disclose it.
_________________________
Opinions are my own and not of my employer.

Return to Top
#612680 - 09/13/06 03:45 PM Re: Flood Determination Company Req. Provider on GFE
johnsbb Offline
Junior Member
Joined: Apr 2006
Posts: 30
Reg x 3500.7(e)states the bank shold disclose as a required provider for "legal service, title exam service, title insurance or to conduct settlement" ie requiring a consumer to use a specific title comapny or attorney which we do not. Hows does this carry over to a credit reporting company or a flood determination company?

Return to Top
#612681 - 09/13/06 04:06 PM Re: Flood Determination Company Req. Provider on GFE
Tom at HOME Offline
Diamond Poster
Joined: Oct 2005
Posts: 1,139
Quote:

Reg x 3500.7(e)states




(e) Particular providers required by lender.

(1) If the lender requires the use (see § 3500.2, ‘‘required use’’) of a particular provider of a settlement service, other than the lender’s own employees, and also requires the borrower to pay any portion of the cost of such service, then the good faith estimate must:

    (i) Clearly state that use of the particular provider is required and that the estimate is based on the charges of the designated provider;
    (ii) Give the name, address, and telephone number of each provider; and
    (iii) Describe the nature of any relationship between each such provider and the lender.

I don't see your reference.

Return to Top
#612682 - 09/13/06 05:09 PM Re: Flood Determination Company Req. Provider on GFE
johnsbb Offline
Junior Member
Joined: Apr 2006
Posts: 30
My point is it states "settlement service". A flood determnation company is not a settlement service ie title company or attorney providing a settlement service.

Return to Top
#612683 - 09/13/06 05:19 PM Re: Flood Determination Company Req. Provider on GFE
P*Q Offline

Power Poster
P*Q
Joined: May 2001
Posts: 8,458
Somewhere
Yes john, it applies to both flood determination and credit bureau company.

Return to Top
#612684 - 09/13/06 06:08 PM Re: Flood Determination Company Req. Provider on GFE
Tom at HOME Offline
Diamond Poster
Joined: Oct 2005
Posts: 1,139
Note the definition of “Settlement Service” in Reg x 3500.2. It includes:

    (11) Provision of services involving hazard, flood, or other casualty insurance or homeowner’s warranties;

And, just incase they missed the flood determination company, they include:
    (15) Provision of any other services for which a settlement service provider (such as the bank) requires a borrower or seller to pay.
Last edited by Tom@BBCON; 09/13/06 06:10 PM.
Return to Top
#681724 - 02/07/07 03:41 PM Re: Flood Determination Company Req. Provider on GFE Tom at HOME
Jan94 Offline
Platinum Poster
Joined: Mar 2001
Posts: 828
USA
If the borrower does not pay the fee for the flood determination are we still required to show the name of the vendor as a required provider? Section 3500.7 states that in a "no cost" loan we would still have to show the fee as POC on the GFE.

The section above states:

e) Particular providers required by lender.

(1) If the lender requires the use (see § 3500.2, ‘‘required use’’) of a particular provider of a settlement service, other than the lender’s own employees, AND ALSO requires the borrower to pay any portion of the cost of such service, then the good faith estimate must:"

Emphasis on "AND ALSO". If the bank pays the flood determination fee, then we would not be required to show the vendor as a required provider. Is that a correct understanding?

Thank you.

Return to Top
#681962 - 02/07/07 06:08 PM Re: Flood Determination Company Req. Provider on GFE Jan94
hhughes Offline
New Poster
Joined: Jan 2007
Posts: 20
Yes

Return to Top
#682412 - 02/07/07 11:09 PM Re: Flood Determination Company Req. Provider on GFE hhughes
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Sorry, but I have to disagree. Halito's understanding is correct. The fee needs to be listed on the GFE and Settlement Statement, but it is NOT a Required Provider fee unless the borrower pays for it.

The key word is the "AND" in §3500.7(e)(1).
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top

Moderator:  Andy_Z