Consumer complaint received 2017-02-03
Company: Altisource Portfolio Solutions, S.à r.l.
State: MD
Product: Mortgage
Sub-product: Other mortgage
Issue: Settlement process and costs

Complaint:
My name is XXXX XXXX, I am a settlement attorney in DC-metro area. I would like to submit a formal complaint about Altisource, a mortgage servicing company and it 's subsidiaries operating the Title/Settlement businesses, such as Premium Title. I have worked with Altisource several times and had the same issues several times so I can no longer believe it is simply a processor error. I believe that Altisource intentionally miscalculates the " purchase price '' on the HUD-1 so buyers pay more in title insurance and the title company receives higher title premiums. 

In the HUBZU/Altisource contract, there is a clear misinterpretation of the purchase price figure. The contract lists the " purchase price '' which is the price that the buyer and seller agree upon. However, after they sign the contract, XXXX other fees are listed - " Buyer premium '' and the " Buyer Tech Fee ''. In XXXX places in the contract, it mentions these XXXX figures as the " Total Due from Buyer ''. I do not disagree with that - the buyer is responsible for these fees. However, the processors at Altisource consistently combine all XXXX charges into the " Purchase Price '' on the HUD-1. When questioned about it, they point to the contract which simply states " Total Due from Buyer is the purchase price, buyer premium and buyer tech fee. '' It does NOT state that the total purchase price equals the purchase price, buyer premium and buyer tech fee. Only in the FAQ 's does it state that the total purchase price is the total of these XXXX charges. I believe the contract is intentionally vague as to this point since the FAQ 's are a separate document and I believe the intent is to deceive buyers, knowing it is likely they will not read the FAQ 's. The FAQ 's & the contract do not use the same language - if the contract intended to use the purchase price, buyer premium, and buyer tech fee as the total purchase price, it should ONE time throughout the contract refer to those as the " total purchase price. '' The contract is the binding agreement that is signed This miscalculation of the purchase price creates a financial disadvantage to the buyer. First, the transfer/recordation taxes will be higher to the buyer w/ a higher purchase price. With almost all REO properties that XXXX & Altisource deal in, the buyer is responsible for 100 % of all transfer/recordation taxes. And more often than not, the buyers of REO properties tend to be cash purchases, so traditional lenders are not available to point out any discrepancies. The second issue with the inflated purchase price on the HUD-1 is that the Deed will only reflect the purchase price agreed to in the contract ( exclusive of the buyer tech fee and buyer premium ) yet Altisource will base Owner 's Title Insurance off the higher purchase price ( inclusive of all XXXX charges ). In my opinion, I think this is the motivation behind the trend. Since commission is almost always fixed ( rather than a percentage ) in these transactions, only the buyer is placed at a financial disadvantage. 

XXXX offers buyers reduced closing costs if they go with their title company - Altisource, so buyers are inclined to use them. Most recently, I assisted my brother in a REO purchase working with Altisource. When the purchase price appeared too high on the HUD-1, he questioned the processor who pointed to the contract where it states " Total Due from Buyer equals Purchase Price, Buyer Tech Fee and Buyer Premium. '' He questioned them again and the processor agreed to write an addendum stating that the total Purchase Price shall not include the Buyer Premium and Tech fee. My brother was smart enough to know this brought down his closing costs, why would n't this option be available to every buyer if they realized the consequence. I believe Altisource intentionally deceives uninformed buyers hoping they do n't educate themselves on how the inflated purchase price affects them.

Company response to consumer: Closed with explanation