When there is an affiliated business arrangement, what should fees appearing on a closing disclosure be based on?

In an affiliated business arrangement, the fees that appear on a closing disclosure should be based on services actually rendered. This principle ensures that the charges reflected in the closing disclosure are tied directly to the work performed during the transaction, reflecting a fair value for the services that the consumer is receiving.

This requirement aligns with regulations designed to protect consumers from inflated charges that may arise merely from the affiliation between businesses, ensuring that transparency and accountability are maintained throughout the closing process. Consumers should not be charged for services that were not performed or that do not correspond to the work provided.

The focus on services actually rendered helps maintain integrity in the transaction and supports the overall goals of the Real Estate Settlement Procedures Act (RESPA), which seeks to promote fair practices and prevent abusive practices in the real estate industry.