Industry News
August 21, 2012
Federal Government’s Excluded Parties List System
The government has established an excluded parties list system. ALTA held a webinar recently which explained the list and the driving forces behind it.
Individuals and companies discovered to have acted inappropriately can be suspended or disbarred from doing further business with or providing services in relation to a contract or transaction that involves the federal government.
The lender is responsible for ensuring all service providers in a real estate transaction – including the settlement agent and title officers and their companies – do not appear on this list for any new FHA or VA loans. Every lender has its own requirements regarding what information it will accept to clear the potential match, such as an individual’s: Social security number, Middle name or previous name, or Driver’s license.
Since each lender must determine its own compliance with FHA, VA and Fannie Mae requirements, some lenders contract with third party vendors to assist. EPLS contains only the names of individuals or companies who have been suspended or debarred by the Federal Government, and access is free. Settlement agents who receive a request to sign up with a third party company should decline such request, especially if the third party charges a fee.
All individuals and companies must be cleared for any contract or transaction involving the federal government. FHA and VA loans are the most common – but not the only – types of transactions in which the settlement agent may receive a request for additional information. Transactions involving HUD REOs, USDA financing, and VA REOs also require EPLS clearance. Some of these third party vendors charge for their services, and lenders may try to pass this charge on to the escrow or title company.
Again, access is free and can be obtained through: https://www.epls.gov
