On the service provider list included with a Loan Estimate (LE), does each charge for title services need to be itemized (“lender policy,” “settlement fee,” “closing protection letter fee,” etc.), or can we simply list “Title Services”?

We believe that each settlement service the consumer can shop for should be itemized on your service provider list.

If a consumer is permitted to shop for a settlement service, Regulation Z requires you to provide a written list “identifying available providers of that settlement service” (with a disclosure stating that the consumer may choose a different provider). At least one available provider must be listed for each settlement service for which the consumer may shop.

Additionally, Regulation Z’s Official Interpretations state that “[t]he settlement service providers identified on the written list must correspond with the required settlement services for which the consumer may shop,” and that, in the LE, “[f]or any item that is a component of title insurance or is for conducting the closing, the introductory description ‘Title –’ shall appear at the beginning of the label for that item.” We also note that the CFPB’s sample service provider list itemizes each title service separately, even though multiple title services are listed under the same provider.

Consequently, we read Regulation Z as requiring the service provider list to itemize each settlement service separately. This approach will allow consumers (and your examiners) to look at each settlement service fee estimated on the LE and see that you have disclosed at least one corresponding service provider for each settlement service on your written list of service providers.

For resources related to our guidance, please see:

Regulation Z, 12 CFR 1026.19(e)(1)(vi)(C) (“Written list of providers. If the consumer is permitted to shop for a settlement service, the creditor shall provide the consumer with a written list identifying available providers of that settlement service and stating that the consumer may choose a different provider for that service. The creditor must identify at least one available provider for each settlement service for which the consumer is permitted to shop. The creditor shall provide this written list of settlement service providers separately from the disclosures required by paragraph (e)(1)(i) of this section but in accordance with the timing requirements in paragraph (e)(1)(iii) of this section.”)

Regulation Z, Official Interpretations, Paragraph 19(e)(1)(vi), Comment 3 (“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. . . .”)

Regulation Z, 12 CFR 1026.37(f)(3), Loan Estimate (“Services You Can Shop For. Under the subheading ‘Services You Can Shop For,’ an itemization of each amount and a subtotal of all such amounts the consumer will pay for settlement services for which the consumer can shop in accordance with §1026.19(e)(1)(vi)(A) and that are provided by persons other than the creditor or mortgage broker. (i) For any item that is a component of title insurance or is for conducting the closing, the introductory description ‘Title –’ shall appear at the beginning of the label for that item. . . .”)

Regulation Z, Appendix H, Form H-27(B) (The CFPB’s sample written list of providers, which includes itemized title fees.)