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#1356746 - 03/12/10 04:19 PM
Re: RESPA changes 1-1-10
rlcarey
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10K Club
Joined: Oct 2006
Posts: 14,390
Cheeseheadland
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Followup to my HUD convo on homeowners on the GFE and HUD for refi's: The HUD-1 can be used in the same manner, but on refinances Homeowner’s insurance does not have to be disclosed on the GFE for refinances since the lender may presume that the borrower is up to date on their insurance, even though you require it to be paid. If not then you can issue a revised GFE based upon changed circumstances if the borrower was not updated on the GFE and show on the HUD-1 the payments that were due prior to closing in the same manner as a purchase. Now that is an interesting response. I think myself and many of my colleagues did not have this interpretation of Box 11 on the GFE. Many of us have felt that since Homeowners Insurance is on the GFE, and the preamble to the Appendix C states “…The required standardized GFE form must be prepared completely and accurately.” Also, since we require that homeowners insurance is required to close the loan, that it essentially is required of the loan, hence to be listed on the GFE and HUD. The ability to ‘presume’ that it is up to date doesn’t seem to be in the spirit of rule, nor is it something we were allowed to do in the past. Several banks, ourselves included, have been cited by examiners for not listed the homeowners insurance as a POC item, even on refinances.
Admittingly, I am hesitant to not list it for refinances unless I could comfortably cite a specific rule or citation in Appendix C, or via some other commentary. Do you know or have something more concrete I can point to that shows that not including homeowners insurance on the GFE and HUD for policies paid outside of closing for a refinance is deemed acceptable?
For clarification, you still must list Homeowner’s insurance on the GFE but if it is a refinance you can assume it is up to date and disclose a “$0” amount in the column on the GFE. If later it becomes clear that the homeowner’s insurance amount is not updated you can re-disclose or show on the HUD-1 the amount necessary in the 1300’s “charges that can increase.” I still do not like his 'assume' commenting. I replied back further about my examining body not so big on making assumptions, and will be retaining his email for their review
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#1356908 - 03/12/10 06:15 PM
Re: RESPA changes 1-1-10
RR Joker
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Gold Star
Joined: Oct 2009
Posts: 257
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My bank does not charge a credit report fee to the borrower in a mortagage transaction. We do however, get a credit report before proceeding with a loan. We eat that cost. That cost is not passed on to the borrower. Would that fee that we are paying to the credit reporting agency be required to be shown on the GFE? It sounds like the new GFE rule requires that we show that fee??? However, I liken it to showing the lender's telephone bill on the GFE since we had to use the phone to call an appraiser or showing our light bill on the GFE since we needed lights to process the loan application. We need the credit report to process the application and we are paying for it.
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#1356955 - 03/12/10 07:00 PM
Re: RESPA changes 1-1-10
Mrs. Rizzo
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Gold Star
Joined: May 2005
Posts: 298
Maryland
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Has anyone put together an example list for changed circumstances? We're working on examples for our staff and thought I would ask.
Thanks!! Don't have a list, but did here a good rule-of-thumb yesterday at a broker meeting: "If it's the borrower's request, it's a changed circumstance. If it affects your profitability, it's not."
Last edited by RobinB; 03/12/10 07:02 PM.
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#1356975 - 03/12/10 07:11 PM
Re: RESPA changes 1-1-10
Working From Home
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Power Poster
Joined: Oct 2009
Posts: 9,086
OK
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Yes you have to disclose the credit report fee. If you want to absorb the fee, show a credit in Block 2. Not commenting on the logic on that .....but this has been discussed ad nauseum in here and you definitely have to show it.
Last edited by raitchjay; 03/12/10 07:13 PM.
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#1356978 - 03/12/10 07:13 PM
Re: RESPA changes 1-1-10
river girl
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10K Club
Joined: Nov 2002
Posts: 20,654
The Swamp
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Management just came to me and said we are signing an agreement with a company to assist us in doing FHA loans. In the agreement is a statement that all loans closed will be assessed a pre-purchase, post closing review fee of $399. This fee will be passed to the consumer. Would I put this in as an admin fee so in block 1? Management also wants to know if they can up the rate 1/8 and not pass this fee to the consumer and then not list anywhere? I told them no. Is that correct? Block 1
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1356982 - 03/12/10 07:16 PM
Re: RESPA changes 1-1-10
Working From Home
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10K Club
Joined: Nov 2002
Posts: 20,654
The Swamp
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My bank does not charge a credit report fee to the borrower in a mortagage transaction. We do however, get a credit report before proceeding with a loan. We eat that cost. That cost is not passed on to the borrower. Would that fee that we are paying to the credit reporting agency be required to be shown on the GFE? It sounds like the new GFE rule requires that we show that fee??? However, I liken it to showing the lender's telephone bill on the GFE since we had to use the phone to call an appraiser or showing our light bill on the GFE since we needed lights to process the loan application. We need the credit report to process the application and we are paying for it. you could run a search in this forum on Credit report fees and probably find all the info you wanted on this topic. The new rules done't require it...the rules have always required it. It's a service provider fee. The phone and electric company are not.
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1356992 - 03/12/10 07:23 PM
Re: RESPA changes 1-1-10
RR Joker
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Power Poster
Joined: Oct 2009
Posts: 9,086
OK
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Joker....it may have always been required...but....i know lots of banks didn't use to itemize it on the GFE...our bank for example paid for it out of the doc. fee...i think that's where all the confusion comes from.
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#1357282 - 03/12/10 11:14 PM
Re: RESPA changes 1-1-10
raitchjay
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Diamond Poster
Joined: Nov 2004
Posts: 1,005
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For line 1400 on the Hud 1a, do we include or exclude the items paid outside of closing by either the borrower or by the FI? We are currently excluding those fees p.o.c. from the total showing in line 1400.
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#1357825 - 03/15/10 08:55 PM
Re: RESPA changes 1-1-10
RR Joker
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Diamond Poster
Joined: Nov 2004
Posts: 1,005
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I having trouble finind any reference to correspondent lending. All of the FAQs and other resources only address mortgage broker fees and the new gfe / hud. Do I just follow the mortgage broker guidance for our future correspondent lending relationship and how to reflect their fees on the gfe/hud? Thank you for your help. I am in new territory and am quite confused.
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#1358007 - 03/16/10 01:52 PM
Re: RESPA changes 1-1-10
river girl
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10K Club
Joined: Nov 2002
Posts: 20,654
The Swamp
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POC items would not show in the total.
Regarding correspondent lending. If the "correspondent lender" does not close and fund in their own name with their own funds, then you treat it like a "broker" transaction. The key is who funds...the customer's contact, or a differnt lending institution??
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1358579 - 03/16/10 10:36 PM
Re: RESPA changes 1-1-10
RR Joker
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Diamond Poster
Joined: Nov 2004
Posts: 1,005
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Regarding correspondent lending...I was told We will be closing and funding the loan in our name and then sending to correspondent to purchase.
Does this mean I don't follow any of the guidance in the FAQs for mortgage brokers? It is all too confusing to try and figure this out for something I have no idea about.
In an earlier post I was told to put the correspondent's $399 fee that is being passed to the consumer for the post closing review in Block 1 of the GFE. Is it for sure that we can't we pay the fee and just increase the rate to the consumer?
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#1358744 - 03/17/10 01:43 PM
Re: RESPA changes 1-1-10
David Dickinson
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10K Club
Joined: Nov 2002
Posts: 20,654
The Swamp
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agree with what David said and how he said it...short, sweet and totally on point!
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1358952 - 03/17/10 03:24 PM
Re: RESPA changes 1-1-10
ramona
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Diamond Poster
Joined: Nov 2005
Posts: 1,032
Midwest
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The way I understand it is once a loan has gone by committee, (in your case someone decided you did not not want to loan X but would loan Y-therefore going by committee) it can not be "withdrawn" by the customer and should continue to be processed accordingly. And yes, if you do not approve a loan substantially the same way as applied and the borrower does not take your "counteroffer" it would be a denial and subject to an Adverse Action Notice.
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#1359030 - 03/17/10 03:56 PM
Re: RESPA changes 1-1-10
biz
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New Poster
Joined: Jan 2010
Posts: 6
Ohio
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How would the RESPA cure provision operate if the customer never receives a GFE prior to closing? Would this be tantamount to disclosing a blank GFE necessitating a cure for all fees? Or is the cure provision not applicable, thus leaving no avenue for remedying the violation? Thanks
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#1359098 - 03/17/10 04:32 PM
Re: RESPA changes 1-1-10
RR Joker
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New Poster
Joined: Mar 2010
Posts: 1
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On a GFE...where would I list a broker credit report fee that is not a required service by us, since we pull our own and charge for it?
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#1359209 - 03/17/10 05:54 PM
Re: RESPA changes 1-1-10
Reads Regs
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Platinum Poster
Joined: Jan 2004
Posts: 968
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#1359931 - 03/18/10 04:46 PM
Re: RESPA changes 1-1-10
pjs
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10K Club
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
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High hopes this will be good and not confusing. ROTFLMAO
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The opinions expressed are mine and they are not to be taken as legal advice.
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#1359977 - 03/18/10 05:39 PM
Re: RESPA changes 1-1-10
Truffle Royale
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Junior Member
Joined: Nov 2007
Posts: 49
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Is it just me or has the webcast not started yet? I just have the purple box with the title and says it will start in a minute. It's been that way for 10 minutes now.
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