The problem is that the exam fee/or search fee on the HUD is going to show payable to the title company - not the subcontractor (at least all that I have seen).  Therefore, if XYZ title company charges the customer $200 for an exam fee, that accurately reflects the transaction; i.e. XYZ charged the customer $200 and the customer paid them $200.  The HUD does not reflect that XYZ owes Johnny Abstractor anything.  The transaction between the title company and the abstractor is a contract matter between them and does not involve the consumer.   

Section 8(b) of RESPA provides that "No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed."  I believe that this has been interpreted to mean that the settlement service provider cannot mark-up fees unless they have added value to the service.  In cases where the search and exam are lumped together, the examination the title company performs based on the title search would certainly be an added value.  Even when the title company shows a separate search fee, in addition to the exam fee, they certainly have expenses in obtaining the search that I would think they could legitimately add to the fee.

I guess we will have to wait and see how HUD responds to the complaints that have been filed.  Personally, I don't think that RESPA was intended to encompass this matter. 

This is an interesting discussion. 

Best,
Robert A. Franco
SOURCE OF TITLE