List of Allowable Service Providers

Compliance > Regulation X - RESPA > Written List of Providers
Q:  Is a borrower viewed as being able to shop for a settlement service provider if the lender has a list of acceptable or unacceptable providers?

A:  In HUD's July 2010 edition of the RESPA Roundup, it indicated that the borrower is not viewed as being able to shop for a provider if the lender has a list of providers that it will allow and the borrower must choose from that list.  In that situation, the lender is viewed as having selected the provider, even though the borrower can choose from the lender’s list.

HUD has indicated orally that, if the lender instead has a list of providers that it will not allow due to unacceptable work, etc., then the borrower will be viewed as having the ability to shop for the provider.  This is because, in that situation, the lender has not restricted the borrower’s ability to shop for a provider in the market.  It has simply indicated which providers produce unacceptable work.
 
 
HUD's RESPA Roundup can be found at http://www.hud.gov/offices/hsg/rmra/res/respa_hm.cfm.

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