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TIL Violation for Not Disclosing Attorney Fee

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Question: 
RESPA/TIL question: We have a residential purchase loan where the attorney who closed the loan did not (also) provide the title insurance policy. FDIC states we have a TIL violation b/c we did not disclose the attorney's fee as a prepaid finance charge. We are not familiar with this being a part of TIL. Your thoughts please.
Answer: 

If you require your loans to close through a settlement agent because you will not close your own loans, then this is the section of the regulation you need to review:

1026.4(a)(2) Special rule; closing agent charges. Fees charged by a third party that conducts the loan closing (such as a settlement agent, attorney, or escrow or title company) are finance charges only if the creditor:

(i) Requires the particular services for which the consumer is charged;

(ii) Requires the imposition of the charge; or

(iii) Retains a portion of the third-party charge, to the extent of the portion retained.

First published on BankersOnline.com 7/15/13

First published on 07/15/2013

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