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Under the HOEPA points and fees test, do we need to include title company fees if we have a title company affiliate, even if we use that company only for our commercial closings? – IBA Compliance Connection

IBA Compliance Connection

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Under the HOEPA points and fees test, do we need to include title company fees if we have a title company affiliate, even if we use that company only for our commercial closings?

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No. We believe you would have to include affiliate title company charges in the points and fees calculation only if you used your affiliate for that particular loan. The HOEPA regulations permit you to exclude any “bona fide third-party charge not retained by the creditor, loan originator, or an affiliate of either.” 12 CFR 1026.32(b)(1)(i)(D). The title insurance fee must also be reasonable, and your institution may not receive any direct or indirect compensation in connection with the fee. 12 CFR 1026.32(b)(1)(iii).