Skip to content
GeoDataVision
Page 5 of 94 1 2 3 4 5 6 7 93 94
Thread Options
#1255210 - 09/23/09 01:56 PM Re: RESPA changes 1-1-10 M Cockrell
avigal Offline
New Poster
Joined: Jul 2006
Posts: 6
Northeast
Appendix C in the new rule says that title services are excluded from the list of service providers you need to supply for block 6. The faqs say that all costs associated with the closing agent are title services, and should be included in block 4. I am interpreting this to mean that even if we allow a borrower to select a title company/closing attorney, we would not have to provide a list of title company/closing attorneys. Do you agree?

Return to Top
RESPA
#1255236 - 09/23/09 02:17 PM Re: RESPA changes 1-1-10 jlroberts
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Originally Posted By: jlroberts
According to #7, last sentence, we are required to provide a list of providers that are likely available to provide the settlement service for the borrower. However, I have not been able to find out how many providers we are required to list on our "written list". Is it permissible to only list our title company affiliate as a title provider? If the borrower doesn't want to use our title company, do we just tell them to research companies themselves and that they are required to contact us with a company name within three business days since we are required to provide them with a properly disclosed GFE within three days? What about surveyors, we only have three in our area.

There is no further guidance on the "recommended providers", other then what we have in these Q&As. In fact, it really isn't brought out in the regulation itself. It's a one sentence instruction in Appendix C: "Where a loan originator permits a borrower to shop for third party settlement services, the loan originator must provide the borrower with a written list of settlement service providers at the time of the GFE, on a separate sheet of paper." That's all we get.

There's no guidance on how many providers, their address/phone #, etc. The FAQs do clarify these are referrals. Also remember the affiliated business arrangement rules. They are still in effect.

Quote:
I also can not find anywhere where the borrower is allowed to change their mind. Such as we give them the written list, they say “I don’t know just use them” (pointing to a name on the list) then they go home, talk it over with their spouse and they decide they don’t want to use someone on our list. Can the borrower give us a letter stating they changed their mind and they want to choose their own provider? Would this be considered a “changed circumstance”? If not how does this requirement protect the borrower? Or do we tell them to withdraw their loan application and reapply for another loan so we can disclose to them some estimated charges for the company they have chosen (which we'll have to estimate since there are hundreds of title companies out there and we can not possibly know the charges for all of them). And btw since you're choosing the provider, you'll be SOL if they charge you more at the closing than we estimated on the GFE (some companies charge fees for items such as copy fees, fax fees, email fees, whereas other companies may not have these charges).

If you give the borrower the right to choose their own provider, you MUST give them a list. They can choose someone from this list or choose another provider. If they choose someone from your list, the fee is limited to the 10% tolerance. If they choose someone not on your list, their is an unlimited tolerance. Some of our clients are thinking they'll just lock this down and not allow applicants to choose. That way they know who is being used and they'll live with the 10% tolerance. Some clients are thinking they would rather have the applicant choose anyone they want so they can get the unlimited tolerance. However, the lender MUST give a list of recommended providers in this case.
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top
#1255252 - 09/23/09 02:27 PM Re: RESPA changes 1-1-10 OldSchoolBanker
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Originally Posted By: OldSchoolBanker
Regarding the list of providers, is this list designed to include pest control firms, surveyors and homeowners insurance? If so, it really complicates the situation for national lenders who lend in all 50 states. We are a national lender and are struggling at the thought of having to list local providers in any locale. We have title and appraisals covered but I cannot imagine having to find local surveyors.

If you give them the right to shop, you must give them a list of providers. This does not include insurance. It only pertains to Block 3-6 items. Refer to Appendix C - "Your Charges for All Other Settlement Services".
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top
#1256481 - 09/24/09 06:23 PM Re: RESPA changes 1-1-10 David Dickinson
Amos Offline
100 Club
Joined: Nov 2004
Posts: 237
USA
FYI: I emailed HUD with the following:

The first edition of the New RESPA Rule FAQs dated August 13, 2009, included the following FAQ in the GFE – General section:

13) Q: Does a prepayment penalty include the requirement of paying interest on a monthly basis on an FHA loan?
A: No. FHA loans accrue interest on a monthly basis. The payment by a borrower of accrued interest upon payoff of an FHA loan is not a prepayment penalty.

This FAQ was then omitted from subsequent versions of the New RESPA Rule FAQs, without any explanation from HUD for the deletion.

We are not sure how to interpret this action. We would appreciate a new FAQ which would explain how lenders are to fill in the prepayment penalty section on the new GFE for an FHA loan. There is some confusion, as the FHA program guidelines state there is no prepayment penalty, while the requirement to pay interest for the entire month when a loan is paid in full on any date other than the 1st of the month may be considered a prepayment penalty under Regulation Z.

Here is HUD's response:

Thank you for contacting the Office of RESPA. RESPA has no jurisdiction over prepayment penalties. Prepayment penalties are covered by the Truth In Lending Act (TILA). Please contact the Federal Reserve at (202) 452-3693 or www.federalreserve.gov. I am sorry for the confusion.

Return to Top
#1256652 - 09/24/09 07:51 PM Re: RESPA changes 1-1-10 Amos
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 79,633
Galveston, TX
That is their way of back peddling as they screwed up with the original Q&A and they have no idea on how to now instruct the lenders.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1257941 - 09/28/09 05:33 PM Re: RESPA changes 1-1-10 RR Joker
Amos Offline
100 Club
Joined: Nov 2004
Posts: 237
USA
I am wondering where on the new GFE to show the $6.50 fee assessed on closed loans by the Georgia Department of Banking and Finance under the Georgia Residential Mortgage Act. After reading the instructions for completing the new GFE, it seems like it should go in Block 8, Transfer Taxes. Do you agree?

Return to Top
#1257963 - 09/28/09 06:01 PM Re: RESPA changes 1-1-10 Amos
Truffle Royale Offline

10K Club
Joined: Jul 2003
Posts: 17,349
I'd post this in the Georgia forum. I'm from WI so I wouldn't even hazzard a guess. sorry.

Return to Top
#1258682 - 09/29/09 06:33 PM Re: RESPA changes 1-1-10 Truffle Royale
OldSchoolBanker Offline
Platinum Poster
Joined: May 2005
Posts: 660
FL
Is there a public email address for sending question to HUD relating to RESPA?

Thanks
_________________________
Old School Banker

Return to Top
#1258695 - 09/29/09 06:46 PM Re: RESPA changes 1-1-10 OldSchoolBanker
Reads Regs Offline
Diamond Poster
Joined: Nov 2004
Posts: 2,294
Originally Posted By: OldSchoolBanker
Is there a public email address for sending question to HUD relating to RESPA?

Thanks


Visit the following page on HUD's web site and click the link for comments and questions.

http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm
_________________________
Opinions expressed are my own and not necessarily those of my employer. They are not legal advice.

Return to Top
#1258700 - 09/29/09 06:53 PM Re: RESPA changes 1-1-10 Reads Regs
OldSchoolBanker Offline
Platinum Poster
Joined: May 2005
Posts: 660
FL
Thank you very much. I looked at many pages on the HUD site and did not see that!

Regards
_________________________
Old School Banker

Return to Top
#1259533 - 09/30/09 07:19 PM Re: RESPA changes 1-1-10 RR Joker
Jan94 Offline
Platinum Poster
Joined: Mar 2001
Posts: 828
USA
On the new GFE form under Summary of your loan there is a line for "Your loan term is". Our forms vendor has included a field for months which doesn't show on the actual HUD form. If the loan is 30 months would it be alright for us to show it as 2.6 years and not include "months" on the line? Thank you.

Return to Top
#1259771 - 09/30/09 10:08 PM Re: RESPA changes 1-1-10 Jan94
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
No. This is brought up in the FAQs. You can't "touch" the form. You must use the form as is. You'll need to state "2.6".
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top
#1259836 - 10/01/09 02:09 AM Re: RESPA changes 1-1-10 David Dickinson
jlroberts Offline
Diamond Poster
jlroberts
Joined: Sep 2009
Posts: 1,579
Ohio
If we provide a GFE with a company the borrower chooses from our "written list", then they change their mind and want to pick a different company (not on our list), would that be considered a changed circumstance because the borrower requested the change. I think so according to § 3500.7 Good faith estimate or GFE.

(3) Borrower-requested changes. If a borrower requests changes to the mortgage loan identified in the GFE that change the settlement charges or the terms of the loan, the loan originator may provide a revised GFE to the borrower. If a revised GFE is to be provided, the loan originator must do so within 3 business days of the borrower’s request.

Return to Top
#1259839 - 10/01/09 02:19 AM Re: RESPA changes 1-1-10 jlroberts
jlroberts Offline
Diamond Poster
jlroberts
Joined: Sep 2009
Posts: 1,579
Ohio
Also, how do we document that the borrower has not expressed intent to continue with the application?

(4) Expiration of original GFE. If a borrower does not express an intent to continue with an application within 10 business days after the GFE is provided,or such longer time specified by the loan originator pursuant to paragraph (c)above, the loan originator is no longer bound by the GFE.

Return to Top
#1259840 - 10/01/09 02:34 AM Re: RESPA changes 1-1-10 jlroberts
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
First question (choosing someone from your recommended list and then changing their mind): You issue the GFE, then they pick a company. Even if it's a different company, why would that cause you to need to issue a new GFE? You issue the HUD-1/1A with the final charges and the tolerances apply to whether they picked one of your recommended providers or not. I guess I don't understand how that affects you.

Second question: You'll have to have some contact with the borrower after they receive the GFE. The LO should write down when they talked to them and their wish to continue.
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top
#1259851 - 10/01/09 03:24 AM Re: RESPA changes 1-1-10 David Dickinson
jlroberts Offline
Diamond Poster
jlroberts
Joined: Sep 2009
Posts: 1,579
Ohio
Since they requested the change wouldn't that require a new GFE in order to show we are no longer subject to the tolerance?

Return to Top
#1259987 - 10/01/09 02:42 PM Re: RESPA changes 1-1-10 jlroberts
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
The tolerances aren't established until you prepare the Settlement Statement. Whether they go with their own service provider or one you recommended doesn't matter until you prepare the SS. You don't identify service providers on the GFE for which they can shop, so why would you need to prepare a new GFE?
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top
#1260280 - 10/01/09 06:56 PM Re: RESPA changes 1-1-10 M Cockrell
Georgia Plum
Unregistered

Can anyone say disaster waiting to happen? If we are having this much confusion, can you imagine the poor consumer? I was told in a CBA course that if you require the service, you have to provide a list of providers for them to choose from, including pest, homeowners insurance, etc.

Return to Top
#1260398 - 10/01/09 08:30 PM Re: RESPA changes 1-1-10
Ninky Offline
Gold Star
Ninky
Joined: Nov 2002
Posts: 357
This may be obvious to everyone else, but by "locked rate" does that refer only to formal, written rate lock agreements?

Return to Top
#1260411 - 10/01/09 08:43 PM Re: RESPA changes 1-1-10
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Originally Posted By: Georgia Plum
I was told in a CBA course that if you require the service, you have to provide a list of providers for them to choose from, including pest, homeowners insurance, etc.

You are correct. This is mentioned in 1 sentence in Appendix C - the instructions for how to complete the GFE. There are several (7) Q&A's in the HUD FAQs about this beginning on page 10.
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top
#1260519 - 10/01/09 11:25 PM Re: RESPA changes 1-1-10 David Dickinson
MT Pockets Offline
100 Club
Joined: Oct 2004
Posts: 238
Up North
I have a question on how to categorize settlement services that are selected by the realtor but the buyer pays part of the fee? Our mortgage lenders tell me that normally, in our area, the realtor selects the title company which is also the closing agent but the buyer pays fees for the title insurance/closing costs. Can we say the Bank selects and live with the 10% tolerance level?
_________________________
If you keep doing what you've always done, you'll get what you always got.

Return to Top
#1260529 - 10/02/09 01:11 AM Re: RESPA changes 1-1-10 David Dickinson
jlroberts Offline
Diamond Poster
jlroberts
Joined: Sep 2009
Posts: 1,579
Ohio
Originally Posted By: David Dickinson
The tolerances aren't established until you prepare the Settlement Statement. Whether they go with their own service provider or one you recommended doesn't matter until you prepare the SS. You don't identify service providers on the GFE for which they can shop, so why would you need to prepare a new GFE?


Ok so at the time of application:

1. we tell them they can shop around for a title company to do the title search
2. we give them the required written list of title companies and they pick someone from the list.
3. that title company charges $500.00 for the service so we disclose that on the GFE
4. according to the new rules that fee is now subject to a 10% tolerance (because they decided not to shop around and pick from our list).
5. they contact us and tell us they want to use a different company for the title search (not on our list)
6. when we prepare the SS we put the fees from that title company on the SS - lets say $800.00
7. we do not have to provide a new GFE and we are not obligated to the 10% tolerance between the GFE and the HUD.

That's wonderful. We thought that once you gave the GFE that the fees for a required service could not change.

Return to Top
#1260556 - 10/02/09 10:39 AM Re: RESPA changes 1-1-10 jlroberts
OldSchoolBanker Offline
Platinum Poster
Joined: May 2005
Posts: 660
FL
Regarding the "Provider List", obviously flood/hazard insurance is one that is required not only by us but our regulators. Is this required to be on the providers list? Our bank does not sell nor refer this type of insurance, yet this change may force us to develop relationships and become a referral source. This is problematic for us since we are a national lender.

Any thought?

Thanks in advance.
_________________________
Old School Banker

Return to Top
#1260616 - 10/02/09 01:06 PM Re: RESPA changes 1-1-10 OldSchoolBanker
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Originally Posted By: OldSchoolBanker
Regarding the "Provider List", obviously flood/hazard insurance is one that is required not only by us but our regulators. Is this required to be on the providers list? Our bank does not sell nor refer this type of insurance, yet this change may force us to develop relationships and become a referral source. This is problematic for us since we are a national lender.

I agree this is going to be a pain. RESPA requires you to give them a list of recommended providers for ALL settlement services for which you allow them to shop. This includes insurance. There are several Q&A's about the list including one that says this becomes a referral. Which then makes me wonder if we're going to back ourselves into Section 8 issues.

There's another Q&A about providing the list that is relevant to the borrower. IOW, don't list companies not in their area.
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top
#1260651 - 10/02/09 01:41 PM Re: RESPA changes 1-1-10 jlroberts
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Quote:
Ok so at the time of application:

1. we tell them they can shop around for a title company to do the title search
2. we give them the required written list of title companies and they pick someone from the list.
3. that title company charges $500.00 for the service so we disclose that on the GFE
4. according to the new rules that fee is now subject to a 10% tolerance (because they decided not to shop around and pick from our list).
5. they contact us and tell us they want to use a different company for the title search (not on our list)
6. when we prepare the SS we put the fees from that title company on the SS - lets say $800.00
7. we do not have to provide a new GFE and we are not obligated to the 10% tolerance between the GFE and the HUD.

That's wonderful. We thought that once you gave the GFE that the fees for a required service could not change.

You're #3 is incorrect. You issue the GFE and provide the written list of providers BEFORE they select a service provider. You won't know who they are using until AFTER the GFE is issued. You must make your best guess of the fee BEFORE they choose a company and list that fee on the GFE. If they choose someone one your list, you are subject to a 10% tolerance. If they choose someone not on your list, there is no tolerance.
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top
Page 5 of 94 1 2 3 4 5 6 7 93 94

Moderator:  QCL