We currently give customers a List of Service Providers that identifies a Title Service Company, as Title Services are the only required services that we allow them to shop for. Since the new List of Service Providers requires that the Title Services be itemized, will we have to create a new List of Service Providers for each loan product which would list only the required services for that type of loan?

If so, are others having trouble nailing down what is required by banking market?

We've decided to use a national title service provider, so regardless of where the collateral is located, we provide a shopping list, with only this one service provider. If they choose this service provider, we're subject to a 10% tolerance. If they choose a different service provider, that's an unlimited tolerance.

So, have you made all of the LO's get on the same page as to which Title Services are required for every loan product?

If I'm interpreting right, then you have to itemize on the List of S.P. So, the Title Insurance, Lenders Title Insurance, Abstracting, etc would all be listed. You would also have to use a different List of S.P. for each loan type, i.e. for a Refi, we would require Title Insurance, but for a Home Improvement, we would require Title Search. We would have to use a different List of S.P. for each product. Right?

Yes, we are making them do this.

For Title Insurance, we will use the one national service provider. For title reports, we'll use default fees by market locations, and not allow to shop. If it's an "out of market" deal, we use the one nationoal service provider. Our loan products and maybe loan size could drive the requirement of title insurance vs. title report.

The new "List of Service Providers" includes a column for "estimate". We currently provide a list of approximately 50 approved attorneys for our applicants to shop from. We have 12 offices located in two states and seven counties. We currently provide the list to each applicant at the time of application for them to select their attorney from. They initial their choice and we use that choice to contact the attorney prior to issuing the GFE and Early TIL so that our fees are accurate and we are held to the 10% tolerance.

The Model form for "Written List of Providers" includes an column titled "estimate". I cannot find anything in the Regulation that indicates we have to show an estimate although have the column would appear to indicate it is required.

Even if we only list one provider with their services, we will have to update the estimates each time we have a request as some of the charges change based on the loan amount.

Are we required to provide on the "Written List" the same figures as we will do on the LE?

I don't know where in the reg that it says those figures have to be the same, but if you provide more than one service provider (for one service) that have different charges, then you should choose the highest cost of that service to list on the Loan Estimate.

We currently provide a list of approximately 50 approved attorneys for our applicants to shop from. . . . They initial their choice and we use that choice to contact the attorney prior to issuing the GFE and Early TIL so that our fees are accurate and we are held to the 10% tolerance.


If I understand this correctly the consumer has to choose from your list. If that understanding is correct then you do not allow them to shop and these fees are subject to a 0% tolerance. See the Commentary to 1026.19(e)(1)(vi)-1.

Providing a list of 50 providers and if 100% of the providers are being chosen from that list it is going to make it very difficult for you to contend, and prove, you allow the consumer to shop "off" the list.

I have a questions for others as to whether or not they feel this would comply? I looked at a similar process as this seems like the easiest solution to solve for the service provider list and not have to worry about different lists for different areas you were lending in (assuming title was all you were allowing them to shop for). I wasn't thinking this would work based on my reading of the following below.

Section 1026.19(e)(1)(vi)(C) Similarly, a creditor does not comply with the availability requirement in § 1026.19(e)(1)(vi)(C) if it provides a written list consisting of only settlement service providers that are no longer in business or that do not provide services where the consumer or property is located.

Do others think just including a national title company like First American Title Insurance would suffice for this requirement? They will write a policy for all states, but they obviously aren't located in every single possible market and sometimes it is through them directly and sometimes they have agents. Any guru thoughts?

I was wondering about the estimates on the "Written List" and if they needed to match the amounts on the Loan Estimate, as well. Any thoughts?

Also, we use LaserPro and the idea was thrown out today that if we could select which required services the customer could shop for while we were creating the Loan Estimate, than LaserPro should be able to pull that information and automatically fill the List of Service Providers. I'm not sure how LaserPro is going to address the List or if they plan on creating one, since they haven't offered that in the past. Does anyone know how their software companies are addressing the List of Service Providers?

Compliance Regs - obviously, not a guru, but used to be an auditor and I have seen many national brokerage companies who used this method in the past. It doesn't matter where the Title Company is located, only that it offers the services that you are allowing the customer to shop for and in the area that your customer is located. As long as the Title Company does both of those, then your disclosure is accurate and you should be good, in my opinion.

I have seen others use this method as well in the past. Just wondering if this new language would still allow that practice to be considered acceptable? Anyone else like to opine?

Section 1026.19(e)(1)(vi)(C) Similarly, a creditor does not comply with the availability requirement in § 1026.19(e)(1)(vi)(C) if it provides a written list consisting of only settlement service providers that are no longer in business or that do not provide services where the consumer or property is located.

Compliance One has a list. You can select all, some or one of the providers you have entered for a service. You can also elect to, or not to show the estimates.

I have a bit of a different spin. I am concerned about making sure a revised list is updated whenever a CoC happens and a new service is added to the LE. Does anyone see any compliance issue with initially giving the borrower an initial list of providers that also includes services that aren't on their initial LE? For instance, we don't normally require a pest inspection or survey but on occasion there is a reason to require it determined later in the process. If we give the customer a shopping list that includes not only the services on their LE initially but providers for any that could possibly be added in the future, then we could be sure it was provided.

You can create a Service Provider List in the Libraries section of LaserPro. I haven't done it yet because up to this point we've kept our own list outside the system, but with the new required format I guess we'll have to make use of this option. If I get around to it in the next few days I will report back - hopefully someone else with LP experience will chime in before then, though.

The applicant can choose off the list if they want to.

I'm confused, CQ1. ^^That's not what you said here: Are there more than fifty attorneys in your area so they can go off list?

RR Joker -

I didn't realize that it was an option not to list the estimates. I know the reg doesn't formally address it, but I would be worried about straying from the model List.

CQ1 - we are limiting customers to only one option for each required service in order to mitigate the risk of a tolerance violations. I would be concerned about keeping all 50 attorneys' fees up to date, as well.
Also, if you normally use Attorney #1, but they actually have a relationship with Attorney #48 and choose to use them; you would still be bound to the amount that you listed on the Loan Estimate. This factor would become an even bigger issue, if you had an application that was not face to face and had to send the Loan Estimate and the List of Service Providers without the customer selecting a service provider in person for you to put on the Loan Estimate.

I misspoke. The applicant can go off list. However, we have 12 branches located in 7 counties in two different states (GA and FL) and there are multiple attorneys in each city/town that are also not on our list so the applicant could actually go off list.

I'm using the new rules as an excuse to hone our service provider list. We have 24 branches in two different states so I'm trying to create a service provider list for designated areas. Each list will provide only one servicer for each service listed. I hope our system upgrades can accommodate that but haven't been able to find out yet.

Re the estimated fee on the service providers list...from page 295 of the preamble of the final rule (the typed, not Federal Register version):

"With respect to questions about the creditors obligation to disclose the fees of the settlement service providers the creditor lists on the written list of providers, the Bureau notes ß 1026.19(e)(1)(iv) does not require creditors to list the estimated fees of the service providers, although form H-27(A) of appendix H to
Regulation Z adopted in this final rule does provide creditors the space to do so."

It is an option, not required.

Sorry to ask this again, but this question was skipped over with everything else going on in this thread. I was really hoping others could weigh in. I would think this would be a question that many are asking.

The creditor must be sure that the providers listed provide services in the area for the particular loan. Again from the preamble:

"With respect to the argument that small settlement service providers may be harmed because a creditors likely response to reduce compliance burden would be to list a small number of very large providers that offer services over a wide area, the Bureau believes that the creditor would not comply with the availability requirement in ß 1026.19(e)(1)(vi)(C) if the service provider listed does not provide services where the consumer or the property is located. But the Bureau understands that small, independent settlement service providers may be more likely to operate outside of large metropolitan areas than larger settlement service providers.

Accordingly, creditors may have to list small, independent settlement service providers in some areas, rather than larger providers, to comply with ß 1026.19(e)(1)(vi)(C)."

Page 292 of the non Federal Register version.

Thanks KB! My thinking was that this practice wouldn't work. I must say though that the "may" wording below still leaves this somewhat open for interpretation as to whether or not it will be an acceptable practice. If this service provider (title insurance in this example that they sell nationwide) will sell that service in any area it still seems hard based on the wording in the preamble to definitively state that practice would not work.

Accordingly, creditors may have to list small, independent settlement service providers in some areas, rather than larger providers, to comply with ß 1026.19(e)(1)(vi)(C)."

It means that if the large providers are not in an area, you will have to list local providers. The may doesn't give you an option, it is referencing that national providers may not be in a small area, and local providers will have to be listed. If they are in an area, you won't have to change to a local provider.