Related Law Firm and Mortgage Company

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Question:

I am an attorney in Florida. I own a mortgage company and a law firm that provides title insurance and closing services. The mortgage company refers title work to the law firm. Does this situation fall within the purview of disclosure, and if, so, exactly what charges for services have to be disclosed?

Answer:

The Mortgage Company will be required to provide the Affiliated Business Arrangement Notice. You, as an attorney, need to review HUD's Regulation X (RESPA) section 3500.15, in particular 3500.15(b)(1)(ii).

The charges must reflect the cost, or a range, usually low to high, of the cost for the particular service you are providing.

You will also want to look at Appendix B and D.

First published on BankersOnline.com 11/15/04