List of Service Providers

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.

Personally, I don't like the idea of using national providers because it really doesn't tell the borrower where they can go in their area. Try googling First American Title and you'll see what I mean. While FAT is the underwriter, the name of one of the title companies that writes for them in IL is Woodford County Title. Will the borrower, or your processor for that matter, know that choosing Woodford means they're choosing from your list?

Just wondering ....if the model form has a column designated for "estimates", but we choose not to provide them (since the preamble indicates they are not required), do we just leave them blank?? Silly.

If the space for estimated costs does not go away when not used, yes, just leave them blank.

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

Can you document if any borrowers have gone off list?

I'm sorry but providing a list of 50 service providers and requiring the consumer to initial which one they choose from the list sounds more like they are being steered to the providers listed. Any reasonable person would assume their choices are limited to the numerous providers being presented on the list. If you can't document you have borrowers going off list, and I don't mean just 1 or 2 in the past 100 loans, then I would start a CYA documentation campaign for potential UDAAP allegations from your examiners.

I cannot fathom the upside to listing 50 attorneys.

The other issue is what if the borrower is going to a branch in county A, they see the list and that they can save a few dollars by going to County B Title Company and they choose to go that route. If the Abstract and various other title services are done in a neighboring county, you face some serious additional costs, which your List is not going to account for and you will be bound by the tolerance limits and the fees listed on the LE.

Truffle, while I somewhat agree I would ask from the perspective of accomplishing this how others are doing this? A number of LOS platforms will only let you create these on the back end or admin side (e.g., must be hardcoded and saved to the system). It is easy to build this list on the back end when you know your typical market area and could list providers for each area to suffice. The rub comes when you make loans outside of this area and your list of providers in your market area wouldn't suffice. There is no way to have a list hardcoded into your LOS platform that would address all areas you could ever possibly lend.

I would love to get some thoughts on how this could practically be accomplished. The national service provider was the only solution that came to mind.

Why do you have to use a hardcoded list? Couldn't you just complete different lists for different areas through an excel table or word doc and use them when necessary?

eta: How are you handling provider listS for outside your market area now?

Trying to address when we do a one off loan in an area we don't have a list for. You are correct that we could just complete the list at this time on the model form, but trying to keep this as automated as possible. It sounds as if that may not be a possibility in these instances.

We currently don't allow the borrower to shop (i.e., nothing in block 6). This seems almost impossible to continue with the 0% tolerance for "Required services that we select" under the TRID Rule.

My head is spinning so please forgive me. I am looking at our existing – been around forever – provider list and I questioned the “powers that be” why the list would include appraisers and appraisal companies. I was told that the guy who set the list up years ago was a genius and if he had them on there then it must be correct. Am I missing something? I thought the customers were not allowed to choose their appraiser.

They are not.

Does anyone see a problem with only having one settlement service provider on the list?

No. In fact, I distinctly remember that TRID speaks to having only one. (sorry. no time to find the reference now.)

It would sure make it easier to stay within tolerance!

It is permissible to have only one provider on the list, but if you service multiple markets the one provider on that list must service the market area they are being disclosed for.

Perfect timing, Dan! I'm logging this in our Q&A's and the sums it up quite nicely. Thank you!

Does anyone forsee problems with having one provider per market, but putting all of them on one list under market area headings? We have 5 branches, and our list now is set up that way. We list the county name and then one provider for each service in that county, leave a blank space, then list the next county name and so on.

I have not played with the new required form yet, though, so I have no idea if this is even possible anymore.

Thank you, Dan.

So are you saying same company (provider) but 5 different branches?

No, I mean it looks sort of like:

County Name A
Settlement Agent/Title Services
1. John E Law, PC

Surveyor
1. Max Doubt


County Name B
Settlement Agent/Title Services
1. Dewey, Cheatum & Howe

Surveyor
1. Ima X. Ample


etc.

It lists one provider per service for each county that we serve.

See the CFPB TRID Compliance Guide; Section 7.4; page 38

Becca, if you don't have a problem with borrower being in County A, but choosing provider from County B, you would probably be okay. (would not be non-tolerance issue because they ARE on your list).

For this reason, I'm going to one/market because lately I've had them go to just what I've described and I see it being a potential issue.

We have the capability to set up a list per market through our platform (at least in theory), but I have very little faith in our staff's ability to choose the correct list per loan. Plus, our counties are so close together that it is not terribly unusual for a borrower in County A to be buying property in County B and use an attorney in County C.

I think one per market is best so that the customer sees what applies to their loan, and the bank has less chance of them "not shopping" by picking from your list.

I've been discussing this with some of you; i feel a bit silly asking this, but i sure would like some clarity: Would we need to provide a provider list for Homeowner's Insurance? I understand that homeowner's insurance is going to be an unlimited tolerance item, but i don't see how to not give the list based on this from 1026.19(e)(1)(vi)(C):

(C) Written list of providers. If the consumer is permitted to shop for a settlement service, the creditor shall provide the consumer with a written list identifying available providers of that settlement service and stating that the consumer may choose a different provider for that service. The creditor must identify at least one available provider for each settlement service for which the consumer is permitted to shop. The creditor shall provide this written list of settlement service providers separately from the disclosures required by paragraph (e)(1)(i) of this section but in accordance with the timing requirements in paragraph (e)(1)(iii) of this section.

Homeowner's insurance is a required service, and we ARE (of course) letting them shop for it....so would we get dinged for not having a provider list for it?

Also, in light of this bit

Assuming we go to a system of giving a list per county, in cases where a borrower in County A is purchasing a property located in County B, for which county should the service provider list be given?

To me, 'service' is a one time thing. Ex: closing, title work, survey, etc.
Home owners insurance is a constant throughout the life of the loan the cost of which fluctuates annually.
So no, I don't see that a 'service provider list' would apply to HOI.

I like that answer.....hope the regulators do too.

Any LaserPro users aware of whether you can print a provider list from LaserPro on a transaction by transaction basis?

Practically, based on the fact that the section you quoted says OR, not and, I'd say pick one and be consistent and you should be ok.
Realistically, most services that you're going to list a provider for work based on where the property is located, not where the borrower lives.
Therefore, unlike the home ownership counseling, I'd give the list of providers for where the property is located.

Definitely...otherwise the cost could be MUCH higher than planned for.

How detailed is everyone getting with the bold language below? It specifically states they must provide services where the consumer or property is located. Is the interpretation of the "where the consumer or property is located" statement that we must list a service provider that is in that specific county? Most service providers will service multiple counties.


A perfect example would be a large metropolitan county and the outlying counties surrounding that area (for this example assume they are contigous). Assume you have a title company that only has an office in the metropolitan county, but they will sell title insurance in the surrounding counties and have done this in the past. Do you feel it would be acceptable to list just the title company in this example that is in the large metropolitan county that will service the nearby counties or is everyone of the stance this is addressed on a county by county basis?

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.

You can create provider lists and select a certain list on a transaction by transaction basis now in LaserPro; however, for the TRID applicable transaction, I don't see that option yet. I believe their intention is to incorporate a list in the same manner, so I'm hoping it'll come through on the next update (haven't published the release notes yet).

Where will the closing be held? If you use this company, will customer be obligated to travel for a closing? I think impact must be assessed (and should have been all along). It has to make sense.

I've been looking for the last hour in LaserPro where the box is to select "print service provider list" and i can't find it. I know where it is in today's RESPA world....the GFE screen. But i see no such checkbox on the Loan Estimate screen. How are you getting the Service Provider List to print in LaserPro?

Sorry...just re-read your post....i guess you're asking the same thing i am...it appears LaserPro doesn't have that capability loaded yet.

As for listing Homeowner's Insurance on the list of providers, the Preamble clarifies that it's not required:

"On the question of listing hazard insurance providers on the written list of providers, hazard insurance would not have been among the services that the creditor would have been required to identify pursuant to §1026.37(f)(3). Therefore, hazard insurance providers do not need to be listed on the written list of providers."

I don't know a lot about it, but we had a loan processor go to the LaserPro User meeting and I believe they said that the service provider lists can be built now, but the functionality of choosing a list during the transaction will come with the next update. We haven't gotten to building that yet, so I don't know details.

Thanks for that citation Diane. And thanks for the LaserPro info Gioia.

We had previously reached out to D+H (Laser Pro) and were told that the Service Provider List would be included in the June 30th release.

Rdy2Retire - That is what we heard, as well.

You can't be accused of steering if you meet the "impose reasonable requirements" test (see below). For practical purposes any service provider you pick should be your designated Tier 1 settlement service provider and with that designation make sure that the settlement service provider has the best insurance/policies/procedures/and certifications in that state. Tier 1 settlement agents for example should have a SSAE SOC 1 TYPE 1 Certification at a minimum and post 6/16 they should have attained a SSAE SOC 2 TYPE 1 Certification. Those are reasonable requirements for TIER 1 Vendors. If you have 50 settlement agents with differing standards then this could get you into trouble because you will have to segregate those vendors into Tier 2 or Tier 3 due to not meeting the reasonable requirements test of a Tier 1 settlement agent.

Official Interpretation to 19(e)(1)(vi)
19(e)(1)(vi) Shopping for settlement service providers.
• 1. Permission to shop. Section 1026.19(e)(1)(vi)(A) permits creditors to impose reasonable requirements regarding the qualifications of the provider. For example, the creditor may require that a settlement agent chosen by the consumer must be appropriately licensed in the relevant jurisdiction. In contrast, a creditor does not permit a consumer to shop for purposes of § 1026.19(e)(1)(vi) if the creditor requires the consumer to choose a provider from a list provided by creditor. The requirements of § 1026.19(e)(1)(vi)(B) and (C) do not apply if the creditor does not permit the consumer to shop consistent with § 1026.19(e)(1)(vi)(A).

The point being made was not how you determine who to put on your list. The point being made was that if you gave the applicant a list of 50 providers and required them to pick one from the list, you were not allowing the applicant to shop:

"In contrast, a creditor does not permit a consumer to shop for purposes of § 1026.19(e)(1)(vi) if the creditor requires the consumer to choose a provider from a list provided by creditor."

You might not be steering by having a qualified list...but from the FI's POV, we have to worry about the point Randy is making in order to properly account for tolerance issues. Having a hard-fast list of 50 basically puts you in a 10% no matter which one of the 50 they choose and with varying prices...you are likely to end up in a pickle.

About the only good way that I know of to stay within guidelines is have a list of one if you allow shopping...and know that one's fees for a particular transaction OR require a specific SA and know their fees for a particular transaction.

We serve several small communities which only have 1 small local, settlement service provider. If that provider is selected on the vast majority of our loans (nearly 95% last year) will providing a list with this provider allow us a 10% tolerance?

I guess what I am asking is if there is only one local provider, is a list even worth our time?

We serve several small communities which only have 1 small local, settlement service provider.

Are you saying you have one settlement service provider that services several small communities or are you saying you have several small communities that have only one local service provider located within the community?

You cannot allow the applicant to shop for a service and not provide them a list with at least one service provider listed, if that is what you are asking. That alone is a violation.

Sorry let me try to clarify.

Are you saying you have one settlement service provider that services several small communities or are you saying you have several small communities that have only one local service provider located within the community?

Both, kind of.

Branch 1 & 2 are 30 miles apart and have only one local service provider - Title Company A

Branch 3,4, & 5 are 45 miles apart and have only one local service provider - Title Company B

We would love to give them the ability to shop, but realistically they will be selecting the provider off of our list almost all of the time.

There is no requirement that there be multiple providers in any area. Either way - you could tell them they have to go with these providers - you still would be stuck with 0% tolerance. If you tell them they can shop and they do happen to choose another provider, you are off the hook.

So we will give them the list and allow them to shop. History shows that 5% of the time they will shop and we will have unlimited tolerance.

The other 95% of the time when they select the single provider on our lsit, would you consider us subject to 0% tolerance?

If they choose the provider on your list, yes - those charges are subject to 0% tolerance.

If the customer chooses on your list, it seems like that should be subject to a 10% tolerance.

But it is not; it is considered "not shopping". In order to shop, the customer must go "off list"!

OK - there was a typo in my last response yesterday. So I would like to clarify.

If you provide them a list and they choose the provider on your list, then those charges are lumped into the 10% aggregate tolerance bucket.

If they choose a provider not on your list, it would fall into the unlimited tolerance bucket.

It really doesn't matter if 95% of the people will most likely select the one on your list.

If the Written List of Settlement Service Providers isn't given to the consumer at all, would the tolerance drop to 10% or 0% tolerance? I have been using 0% for procedures, but now I am hearing this is wrong, it should be 10%. Can someone set me straight? I have been reading through 1026.19(e)(1)and (3)....I think I am going cross-eyed.

It depends on the service you're talking about.
If you're talking title insurance, if no list is provided then whoever is chosen is deemed to be on the list and it's 10% tolerance.
If you'd given a list and the borrower chose someone who was not on it, then tolerance would be unlimited.
I'm not sure how or why you think it would revert to 0% tolerance....

MY train of thought has been, that if we did not provide the list, we did not give the consumer opportunity to shop; therefore, 0%. I know that wasn't the case under the old rules, but for the new rules, I have always thought it was 0%.

Cheli - It would depend on where you disclosed the fee on the Loan Estimate. If you disclose in section B (Services You Cannot Shop For), then it would be zero tolerance. If you disclose in section C (Services You Can Shop For), and you don't provide a shopping list, then you're subject to 10%. I would recommend putting at least one provider on the list, that way if the customer goes off list, then it would be unlimited tolerance.

[quote][/quote] Sounds like your train got sent on the wrong track somewhere.... Been there, done that, got the t-shirt.

Care to explain why Cheli is off track? If you don't give them a list, then you failed to comply with .19(e)(3)(ii). You don't get the 10% tolerance on any items in which you fail to disclosure them pursuant to .19(e)(3)(ii). No list, you don't comply with .19(e)(3)(ii) - the charges go to 0% tolerance.

19(e)(3)(ii) Limited increases permitted for certain charges.

1. Requirements. Section 1026.19(e)(3)(ii) provides that certain estimated charges are in good faith if the sum of all such charges paid by or imposed on the consumer does not exceed the sum of all such charges disclosed pursuant to § 1026.19(e) by more than 10 percent. Section 1026.19(e)(3)(ii) permits this limited increase for only the following items:

i. Fees paid to an unaffiliated third party if the creditor permitted the consumer to select a settlement service provider that is not on the list provided pursuant to § 1026.19(e)(1)(vi) and discloses that the consumer may do so on that list.

You found what I was looking for, Randy - again, I didn't go far enough into the reg. You would think I learned my lesson by now? Yes- This area is what led me to make the decision to cure our mistake of not providing a Settlement Service Providers List by ensuring our fees at closing does not exceed what was disclosed on the last (valid) LE. It's only happened once since TRID went into effect, but still...I received a document from the ABA today that states:

Failure to Provide Shopping List:
Consider rule requires that 10 percent tolerance will apply and cure should be based on lender being held to tolerance (some are applying 0% cure based on CFPB webinar that appears to contradict rule)...

My research led me to this discussion....Thank you.

This is from the commentary to 1026.19(e)(3)(iii)-2
If the creditor permits the consumer to shop consistent with § 1026.19(e)(1)(vi)(A) but fails to provide the list required by § 1026.19(e)(1)(vi)(C), good faith is determined pursuant to § 1026.19(e)(3)(ii) instead of § 1026.19(e)(3)(iii) regardless of the provider selected by the consumer, unless the provider is an affiliate of the creditor in which case good faith is determined pursuant to § 1026.19(e)(3)(i).

If we put a charge in Section C of the LE and fail to provide a service provider list, we put the fee in the 10% category.

Well, okay dokay then. There you have it. 10% it is.

Ah-ha. Thank you, Bville and Randy.

I have a weird situation where the list was not provided with the original LE but with a subsequent one. However, both the first and 2nd LEs were delivered within 3 business days of the application.

Would the charges that the borrower shopped for still be subject to no tolerance because the list was provided within 3 business days albeit not provided with the initial LE ? Or, would the charges be subject to 10% tolerance because the list was not provided with the initial LE even though the list was provided within the timing requirements?

I have another List of Service Providers question to add to the thread.

Our service provider list has a specific location listed. This is a local title company within the county that operates multiple locations.

Apparently the fees may differ from one location to another. The consumer picked the same company but a branch in a city 20 miles away. The department placed the fees in the shopped for/unlimited "good faith" category on the Closing Disclosure. I asked why they did not include it in the Services the Borrower did shop for section and they said that it was because the different locations had different fees and they picked a different location.

There was not a tolerance issue either way, but the question is if it is the same company.. shouldn't it be treated the same and considered subject to the 10% aggregate tolerance?

Thank you!

You tell them how to contact them. Whether they get the services at the contact location that you give them is not the issue if this is actually one company. It is still they who are providing the service.

That was my assumption as well. Thank you Randy!!

I'd like to revive this thread if possible, what if the SSPL was provided, however it was not itemized for the different title fees the borrower could shop for? What that create a zero tolerance issue because the borrower's did not have the actual title fees listed on their shopping list?

The costs are already listed on the LE in Section C. There is no requirement to repeat them on the provider list.

When researching, the model form example H-27(B) from the CFPB breaks down the different fees/services for the title company for example. It is not a requirement to have the SSPL broken down to list all services the borrower can shop for?

http://files.consumerfinance.gov/f/201403_cfpb_mortgage-loans-transactions_cover_H27B.pdf

The sample form includes that information but nowhere in the regulation or commentary is it required.See 1026.19(e)(1)(vi) and related commentary.

Your software most likely gives you the option of displaying (or not) the fees

I know this is an old thread, but an issue somewhat similar as come up. What if the creditor did provide the SSPL, but certain services, such as title or escrow, were left off. If these fees were correctly disclosed in Section C of the LE, would the services omitted be subject to 0% or 10%?

See Bville's post above for your answer and the regulatory support too.

They closed this issue in the new commentary in TRID 2.0:

19(e)(3)(iii) Variations permitted for certain charges. - Comment 2

If the creditor permits the consumer to shop consistent with § 1026.19(e)(1)(vi)(A) but fails to provide the written list required under § 1026.19(e)(1)(vi)(C), good faith is determined under § 1026.19(e)(3)(ii) instead of § 1026.19(e)(3)(iii) unless the settlement service provider is the creditor or an affiliate of the creditor in which case good faith is determined under § 1026.19(e)(3)(i). As noted in comment 19(e)(1)(vi)-1 whether the creditor permits the consumer to shop consistent with § 1026.19(e)(1)(vi)(A) is determined based on all the relevant facts and circumstances.

Thank you, Truffle and Rlcarey! I should have paid closer attention to the reg.

I appreciate your time in responding!

Another question to add to the list here, figured it might be good to have all the answers in one place . This may have already been dealt with in another thread, but I couldn't find it. What if the creditor provides multiple providers of a settlement service on their WPL/SSPL - would they all be subject to the 10% tolerance rule? How would that be possible if you only list one on the LE? What costs would you compare against? It just doesn't seem logical, but I don't see anywhere that the Regulation deals with this scenario and they all seem to say if they select a provider off your list, then it's a 10% tolerance rule.

That is why listing multiple service providers for a service on your list is sort of like pointing a loaded revolver at your foot and pulling the trigger.

You are not listing a provider on your LE, you are listing a cost.
Basically what you're saying with your SSPL is that the cost you're showing on the LE is what the provider(s) listed will charge.
So unless you can guarantee that every provider you put on your list will come in within 10% of the cost shown on the LE, you're looking at Randy's loaded revolver.

So, you would say in your 10% tolerance calculation, you would just match it up with whatever is on the initial LE, regardless of which of the actual service providers was selected to get those estimates from?

On the LE you put down $300 for the settlement fee in Section C. You give them a list of multiple settlement service providers. If they choose one of those providers, then the $300 becomes your baseline amount in your 10% aggregate test - regardless of the fact that one of the service providers on your list charges $300 or the one they selected from your list charges $500.

Which is why most of us only put one service provider on the list and that's the one who charges the fee we're putting on the LE.

Have a couple questions regarding the SSPL. We have been using no list 0% tolerance, and in the process of transitioning to use the SSPL.
First Scenario:
1) We list Settlement Co "A" as our 1 provider, issue the SSPL & LE w/costs from Co "A". Purchase agreement states they want to use Settlement Co "B". Do we re-disclose w/Co "B" costs immediately or just when we get an invoice? Would this then be unlimited tolerance since they didn't choose from our list? If we don't have to immediately issue a new LE but the costs are greater then the assets the borrower has and therefore won't pass underwriting; would it just be better to reissue an LE?
Second Scenario:
2) We order all title work from Settlement Co "C" who was listed on our SSPL. Co "C" invoices for Closing Fee, Wire Fee, Courier Fee; but lists Settlement Co "D" as payee for Lenders Title Insurance and Title Search Fee. Co "D" is not listed on the SSPL. Do we issue an updated SSPL w/Co "D" for the charges which were the same amounts as listed on the LE?
Third Scenario:
3) We set up a standard list for each separate area in which we do business. Pest Inspection Co is listed on the SSPL. A pest inspection is not required. Do we have to remove the Co from the list when we know there will not be any charge associated with the provider?
Thanks!

[quote][/quote]

Sorry - we never let them shop before, all charges were in Section B, none in Section C. We are going to now.

Doing as Truffle suggested for #2 could lead to exceptions from your auditors and inquiries from your regulators, although I don't have a better alternative. The fees are supposed to be listed in Section B on the CD if the borrower did not choose/chose the provider on the SSPL, and in Section C if the borrower chose someone not on the SSPL. However, the way the reg is written makes it sound like the fee's location on the CD can be determined based on whether or not the provider listed as the recipient was on the SSPL. The writers of the reg apparently did not understand that the ultimate provider of the service not being listed on the SSPL does not directly correlate with whether the borrower made a choice or not.

So, our auditors (and I presume regulators as well, although I haven't had one bring it up) are only comparing the provider of the service listed on the CD with the SSPL, and we frequently get exceptions when a fee is in Section B and the provider is not on the SSPL. One option we are considering is sending out an informational SSPL as soon as we know this is going to happen, just so there is something in the file for an auditor/regulator to see that would support our position that the fee belongs in Section B because the borrower did not choose.

Also, you would show the estimated costs from "B" in scenario #1 whenever you issue a revised LE, but you do not have to issue a revised LE solely because of this new information. In other words, this isn't a reason why you would need to issue a revised LE, but if one gets issued for another reason, you should update the fee information based on a good faith estimate of the information at your disposal.

I don't recall that I ever read Learned's post above.
With regard to what amounts to a sub-contractor (Co D) title company, I don't think Learned or their auditors are correct.
If I order title work from ABC company and they list Fidelity Title as the payee for Lenders, most people in the industry would know that ABC is my local company while Fidelity is the Nationwide provier of the actual insurance.
It's the same with Jones Insurance Company being the provider for State Farm Insurance.
There is no such thing as an 'informational SSPL' either.
I stand by my statement that you just show the payee on the CD and that, coupled with a copy of the invoice in your file, is sufficient for any auditor or examiner.