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Our Bank normally closes all our consumer TRID home loans. Ocassionally, an out of town realtor will will request that a title company/attorney’s office to close the loan when it is a purchase. Because we close our loans we do not usually list a settlement/closing fee on the loan estimate and we do not have any closing title insurance companies listed on our providers list for closers. If we already disclosed a loan estimate without a closing fee which is also a prepaid finance charge, do we have to redisclose the LE? Is a settlement/closing fee always a prepaid finance charge even if we do not retain a portion of it? Also if did not disclose the fee on the LE and issued the closing disclosure is it a violation and we have to reimburse the borrower the a portion or the entire fee? Or is it not a violation because we do not have closing companies on our providers list?
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Yes, you must tell the borrower on the LE all the fees they will be paying. It is your responsibility to provide them the best information available for all fees they will be paying, even if it is out of town. Which the scenario you are describing sounds like creating a special providers list for them. Also based on the scenario is sounds as if a third-party is dictating your process, with the release of the interagency guidance on third-parties in June of 2023, you may want to consider more controls over those realtor third-parties. Mortgage third-parties have been looked at more stringently in the last few years.
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