2009 new RESPA roll out
Homebuyers will soon have “improved” mortgage disclosures to help with their decision making, the result of Real Estate Settlement Procedures Act rules finalized by the Department of Housing and Urban Development in November.  Although the new disclosures are not required until January 2010, we would expect to see lenders start rolling out the new procedures in 2009, both to make sure they are in place and functioning effectively before the due date and to try and demonstrate they are consumer-friendly.

Under the new RESPA rules, there will be a standardized good faith estimate intended to enable borrowers to more easily review and compare mortgage rates and settlement charges.  The three-page GFE form will consolidate closing costs into major categories and display total estimated charges on the front, so a borrower can easily compare loan offers.  HUD will specify which closing costs can and cannot change at settlement and limit the amount fees can change.

A revised HUD-1 settlement statement, which borrowers receive at closing, would cross-reference the line on the GFE to make it easy to compare estimated and actual charges.  HUD estimates that the new process will save the average borrower $700 on closing costs.  Who knows how in the world they come up with that number.  It’s amazing how the bad work of a few lenders penalizes us all, and the mandated solutions implemented by bureaucrats.  We already provide the lowest rates and costs for our clients without HUD interfering…. we have to, how else would we stay in business??  The markets take care of themselves, if we dont provide the best service at the lowest cost we will not be in business long… the fundamentals of our systems and economy ARE strong.

Lenders would have three days after receiving all the relevant information to provide a mortgage shopper with the GFE.  However, the lender would have to wait for a go-ahead from the potential borrower to verify the information provided in order to give the borrower the opportunity to shop for other offers, if so desired.  Click here to view the new forms at hud.gov      © 2007, Real Estate Information Services, Capitol Assets, & Choice Finance®