When providing the LE, we obtain quotes from the Title Company the applicant thinks they will use, if they already have someone in mind. In light of the amendments to update all other information when providing a revised LE how should the following be handled?

At application the applicant thought they would use Title Company A, therefore quotes were obtained from Title Company A and Title Company A is listed on the Written List of Providers. During the underwriting process we become aware that there is a Right-of-Way issue and now the transaction will need a Right-of-Way agreement. We also now know that the applicant decided to use a different title company, Title Company B. Do we obtain a quote for the Right-of-Way agreement from Title Company A since this is who was originally quoted and disclosed - thereby having no tolerance limits for the new fee? or Should we obtain a quote from Title Company B and put Title Company B on the Written List of Providers - thereby having a 10% tolerance for the new fee?

Additionally, are we under any obligation to obtain quotes from Title Company B for all other title services since we know they will be used so that they can be updated on the revised LE (typically we don't know the final title services costs until we are preparing the CD)? and if we did so, are we muddying the waters for the tolerance test and obligating ourselves to a 10% tolerance instead of no tolerance.

Does knowledge of changes, such as in the service provider, obligate a FI to go out and get updated quotes? Or does our obligation rely on having received the information in the natural progression of the transaction - so for title services it would be just before closing before we had actual final dollar amounts?

Thanks in advance.

Let's start with this:

At application the applicant thought they would use Title Company A, therefore quotes were obtained from Title Company A and Title Company A is listed on the Written List of Providers.

Why would you do this? You should have "your" preferred provider on the original LE regardless if you think the applicant might have their own. You then go from there.

^^^this.
You put the charges for the title company YOU would chose on the LE and you list that company on the SSPL.
The borrower can go with the provider you list or they can pick anyone else. That's the idea of shopping.

As for the Right of Way, why would the bank chose who is going to write it? You condition the loan for the Agreement and redisclose to capture the cost of the attorney you're going to put on the SSPL you have to give when you require another service as a condition of granting the loan. The borrower can use that one or pick anyone else.

It was a decision, not by me, to do what is currently being done. They are aware that they are subjecting themselves to a 10% tolerance by getting quotes from the title company on the sales agreement and putting that company as the provider on the Written List of Providers. It was a decision based on some tolerance issues (with recording fees) we've had and also based on the fact that because of the nature of some of the fees, they did not feel right getting quotes from a service provider they knew the applicant had no intention of using, which is an inconvenience to that provider to do work quoting fees but will not get the job. They also felt that they did the customer a disservice quoting fees from our preferred provider which was much lower than the prices of the one on the sales contract. It was a rare occasion (if it ever happened at all) that any applicant decided to pick our preferred provider over the one that the real estate agent suggested (likely convinced them they had to) they use and indicated on the sales agreement.

If we have the right to disclose any preferred provider we want, I see no compliance risk with disclosing who the applicant wanted. Yes, we are subject to 10%, but the quoted fees are always honored at closing. So we no longer have any tolerance issues with recording fees and no longer getting quotes from a third party that will not make any income from the transaction.

I have no control over this decision, and I likely will not be able to change their minds when I couldn't convince them the first time around.

I even bounced this off of BOL users back when management was wanting to go this path and those that responded did not see any compliance violations in what we were doing, only that we were subjecting ourselves to tolerances we would not have otherwise been subject to.

I guess what I really need to know is there any obligation to get updated costs during the loan process in order to include the most up to date information on a revised LE (in the event one is being provided due to a CIC)? I don't think so, but I wanted to be sure.

It was my understanding that we would just update information that we happen to have but that we had no obligation to go out and ask for updated information.

My other question about quoting the fee for the new service needed due to a CIC, I think Truffle answered. We could obtain from and quote the original provider's fee even if we know they will like use the other title company since they are using them for all their other title services.

If you are providing a revised LE, the information on the LE must meet the standard (for loans the applications for which you receive on or after October 1, 2018) in comment 19(e)(3)(iv)-5, which was added under TRID 2.0:

5. Best information reasonably available. Regardless of whether a creditor may use particular disclosures for purposes of determining good faith under § 1026.19(e)(3)(i) and (ii), except as otherwise provided in § 1026.19(e), any disclosures must be based on the best information reasonably available to the creditor at the time they are provided to the consumer. See § 1026.17(c)(2)(i) and comment 17(c)(2)(i)-1. For example, if the creditor issues revised disclosures reflecting a new rate lock extension fee for purposes of determining good faith under § 1026.19(e)(3)(i), other charges unrelated to the rate lock extension must be reflected on the revised disclosures based on the best information reasonably available to the creditor at the time the revised disclosures are provided. Nonetheless, any increases in those other charges unrelated to the rate lock extension may not be used for the purposes of determining good faith under § 1026.19(e)(3).

That's the same standard as the estimates on the original LE.