Whether the 10% tolerance will apply to the charges of a title insurance company depends on whether the customer-selected title insurance company should be treated as the same company as the “settlement service provider identified by the loan originator.” 12 CFR 1024.7(e)(2)(ii). We presented this question to the CFPB, and their guidance was as follows:

• If a customer selects a different branch of the same title insurance company that is listed in your preferred provider list, then the title insurance fees would be subject to the 10% tolerance.

• If the customer selects a different agent who happens to work with the same title insurance company as an agent that is listed in your preferred provider list, and that agent is a separate legal entity from the agent that is listed in your preferred provider list, then the title insurance fees would not be subject to the 10% tolerance.

Because the answer to your question depends on the legal status of the entities on your preferred providers list, you may want to examine your contracts with the title insurance providers and contact them directly to determine whether they are branches of a title insurance companies or are independent agents that operate as a separate legal entity from the title insurance company.