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Different HUD/GFE Title Fees-Tolerance Violation

Answered by: 
Dan Persfull

Question: 
On purchase transactions where the seller picks the title company (and the borrower and lender have no say in it) if the title fees shown on the final HUD differs from the GFE, is the lender responsible for a tolerance violation and required to pay the difference to the Borrower?
Answer: 

If the seller gave the borrower no say in the title company they have violated 3500.16 and if the buyer wants to push it after closing the seller would be liable to the buyer for I believe treble damages.

The financial institution using the seller chosen title company has allowed the applicant to shop for the service through the seller. If the title company is on your Written List of Providers then you are responsible for any tolerance violation cures to the borrower.

First published on BankersOnline.com 4/9/12

First published on 04/09/2012

Filed under: 
Compliance
Filed under compliance as: 
Fees
HUD
IT

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