Some lending institutions follow the practice of designating specific settlement service providers to be used for legal services, title examination services, title insurance, or the conduct of settlement.

Where this occurs the Good Faith Estimate must clearly state that use of the particular provider is required and that the estimate is based on charges of the particular provider, give the name, address and telephone number of each designated provider, and describe the nature of any relationship between each provider and the lender.

While designated firms often provide the service needed, a conflict of interest may exist. Take, for example, the situation where the provider must choose between your interests and those of the lender. Where legal services are involved, it is wise to employ your own attorney to ensure that your interests are properly protected. It is wise for you to contact other firms to determine whether their costs are competitive and their services are comparable.

A lender may not require use of a provider if the lender and provider are part of a "controlled business arrangement", which is discussed further under "Protection Against Unfair Practices".

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