February 8, 2024 at 5:26 pm EST #343527MeagenParticipant
We currently use a third-party vendor who obtains the initial settlement services and fees from the service provider. The vendor also integrates with our LOS to populate the Written Providers List. The vendor breaks the Written Providers List into two sections—one section for Settlement Services and a separate section for Title Services. This is not an issue if Title and Settlement services will be provided by two different providers; however, the services are broken out this way even if all services are going through one provider. For example:
Title – Courier Fee XYZ Title and Escrow 123 Main St
Title – Electronic Doc Delivery Fee Anywhere, USA
Title – Settlement Fee
Title – CPL (Closing Protection Letter) XYZ Title and Escrow 123 Main St
Title – Endorsement Fee Anywhere, USA
Title – Lender’s Title Insurance
We are undergoing a third-party audit and have received the following criticism: “The title and the closing services are provided by the same vendor. The regulation does not breakdown these services other than the appropriate prefix of “title” and these must be listed in alphabetical order.”
I see the logic the vendor is using; however, I cannot find regulatory support. Have you seen this before or know of any regulatory citation that would support the disclosure as above? I’m looking for support one way or the other for when I go back to either the auditor or the vendor.February 20, 2024 at 4:28 pm EST #343573Kimberly Boatwright, CAMS, CRCMKeymaster
The section of the regulation that speaks to Written List of Providers is Paragraph 19(e)(1)(vi) – 3. It states –
If the creditor permits the consumer to shop for a settlement service it requires, § 1026.19(e)(1)(vi)(C)[Written List of Providers] requires the creditor to provide the consumer with a written list identifying at least one available provider of that service and stating that the consumer may choose a different provider for that service.
The settlement service providers identified on the written list required by § 1026.19(e)(1)(vi)(C) must correspond to the required settlement services for which the consumer may shop, disclosed under § 1026.37(f)(3). See form H-27 in appendix H to this part for a model list.
Creditors using form H-27 in appendix H properly are deemed to be in compliance with § 1026.19(e)(1)(vi)(C). Creditors may make changes in the format or content of form H-27 in appendix H and be deemed to be in compliance with § 1026.19(e)(1)(vi)(C), so long as the changes do not affect the substance, clarity, or meaningful sequence of the form. An acceptable change to form H-27 in appendix H includes, for example, deleting the column for estimated fee amounts.
I’m not sure I understand your question or why your Audit firm is saying it is a violation as long as you have identified one vendor for the service and have them listed in ABC order having the same one listed for different services they offer doesn’t appear to be an issue.
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