Off the CNL network, third party service providers are almost always selected by the lender, even though the borrower pays for the service. The third party service providers compete for the patronage of lenders, which is sometimes referred to as “perverse competition”, because it raises prices to consumers rather than lowering them. The result is that these services are generally over-priced relative to what they would cost in a market where service providers marketed directly to consumers.
Such direct competition now exists on the CNL network. If the prices posted by third party service providers on the network are lower than those of the service providers selected by your lender, you can inform the lender that you want to use the CNL service provider.
If you must purchase mortgage insurance, the insurers who post their premiums on the site will offer three different premium plans, and you will be able to select the plan that is least costly to you. Off the CNL network, borrowers are seldom if ever offered this choice.
For more information, read Are Settlement Services Overpriced?
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