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#1260658 - 10/02/09 01:44 PM
Re: RESPA changes 1-1-10
MT Pockets
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10K Club
Joined: Nov 2000
Posts: 18,765
Central City, NE
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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? Refer to the RESPA FAQs: GFE-Seller Paid Q&A #1 & 2, and GFE - Block 5 Q&A #1 & 2.
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#1260788 - 10/02/09 02:51 PM
Re: RESPA changes 1-1-10
David Dickinson
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100 Club
Joined: Oct 2004
Posts: 238
Up North
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Thank you. I am more confused the more I read and try to understand how we are supposed to complete the GFE and HUD 1 accurately. Trying to explain to lenders and customers is a huge challenge.
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If you keep doing what you've always done, you'll get what you always got.
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#1261088 - 10/02/09 06:26 PM
Re: RESPA changes 1-1-10
David Dickinson
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100 Club
Joined: Jul 2008
Posts: 148
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I have a question about the updated definition of mortgage broker in the new RESPA rules. The updated definition is as follows:
"Mortgage Broker means a person (not an employee of a lender) or entity that renders origination services and serves as an intermediary between a borrower and a lender in a transaction involving a federally related mortgage loan, including such a person or entity that closes the loan in its own name in a table funded transaction. A loan correspondent approved under 24 CFR 202.8 for Federal Housing Administration programs is a mortgage broker for purposes of this part."
I work for a bank that closes mortgage loans in our own name using our own funds with the purpose of then selling those loans to other financial institutions (or Freddie/Fannie). Is that considered table-funding? And if so, are we then considered a mortgage broker under this definition?
Also, the amended Reg Z 226.36 includes a new definition of mortgage broker that is limited to a "person". So it's possible that we will be considered a mortgage broker under RESPA but not under Reg Z?
Thanks in advance for any guidance.
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#1261114 - 10/02/09 06:42 PM
Re: RESPA changes 1-1-10
CrookedVulture
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10K Club
Joined: Nov 2000
Posts: 18,765
Central City, NE
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I work for a bank that closes mortgage loans in our own name using our own funds with the purpose of then selling those loans to other financial institutions (or Freddie/Fannie). Is that considered table-funding? And if so, are we then considered a mortgage broker under this definition? "table funding" (see the definition in ยง3500.2) is when the funds aren't yours. If you use your own funds, you are not table funding and you're not a broker.
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#1261357 - 10/03/09 01:49 AM
Re: RESPA changes 1-1-10
David Dickinson
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Diamond Poster
Joined: Sep 2009
Posts: 1,601
Ohio
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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. Thanks David, now it makes much more sense. We were trying to figure out how to quote fees from a company we don't normally do business with. We are thinking about only putting one title company on our list and putting their charges on the GFE. Then if they pick them, we won't be going over the tolerance because the charges will be accurate. And if they don't pick that company, a tolerance does not apply. Win-Win - Hope I got it right this time.
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#1262428 - 10/06/09 07:14 PM
Re: RESPA changes 1-1-10
Ninky
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Platinum Poster
Joined: May 2005
Posts: 662
FL
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Any fifty state nationwide lenders who would like to compare notes on the new GFE challenges, please send me a message. I am interested in opening a dialogue with other national lenders on several GFE related issues.
Thanks
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#1262856 - 10/07/09 02:49 PM
Re: RESPA changes 1-1-10
Ninky
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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If you consider that a "required" provider, yes.
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1263005 - 10/07/09 04:05 PM
Re: RESPA changes 1-1-10
David Dickinson
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Platinum Poster
Joined: Nov 2004
Posts: 505
Central Illinois
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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. If you have 3 Title companies on your "list" 1 charges $100 2 charges $150 3 charges $300 If I pick #1 to put on my GFE because I want to show the lowest closing costs to be competitive, the customer picks #2 or #3 because they have some type of loyalty to that title company, are we not outside the 10% tolerance? Or after they select I need to issue a revised GFE?
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#1263341 - 10/07/09 08:56 PM
Re: RESPA changes 1-1-10
Ninky
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Diamond Poster
Joined: Nov 2004
Posts: 2,310
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HUD has updated the RESPA FAQs today (10/7). A new item was added on page 19 to address the recent guidance from the FRB to HUD regarding the FHA prepayment penalty issue. A new item was added on page 33 to address how to show points on the new HUD-1 form to help with IRS 1098 reporting. http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs.pdf
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Opinions expressed are my own and not necessarily those of my employer. They are not legal advice.
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#1263591 - 10/08/09 02:49 PM
Re: RESPA changes 1-1-10
Oursisnottoreasonwhy
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Diamond Poster
Joined: Nov 2004
Posts: 2,310
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Not yet. The last page of the FAQs says they will publish it on their website and put a notice in the Federal Register when it is available.
_________________________
Opinions expressed are my own and not necessarily those of my employer. They are not legal advice.
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#1264111 - 10/08/09 09:07 PM
Re: RESPA changes 1-1-10
rlcarey
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Diamond Poster
Joined: Mar 2002
Posts: 2,280
Far from Calif
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HUD updated the FAQs again on 10-7-09: HUD FAQ 10-7-09
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The opinions expressed are mine and do not necessarily reflect those of my employer _._._._._._. A.S.A.P. Always Say A Prayer <><
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#1264682 - 10/09/09 04:56 PM
Re: RESPA changes 1-1-10
Ninky
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100 Club
Joined: Oct 2004
Posts: 238
Up North
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Since "years" is hardcoded and there is no other guidance in the instructions or Q & A, seems to me it would be 15.5 but applying logic to this new GFE does not always give you the right answer.
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If you keep doing what you've always done, you'll get what you always got.
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#1264828 - 10/09/09 06:40 PM
Re: RESPA changes 1-1-10
MT Pockets
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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Did the credit life entry ever get answered? I have scanned but have not found any replies on that. thanks! I'm beginning to think, since it's not required, it would just be shown as "other fees" on the HUD 1, 1300 series...and not appear on the GFE at all.
Also...I see where the opinion is back that you will have to provide a list of insurance companies...that's not an item in 4, 5 or 6..it's at 11, so why or where does it state this would require a list?
Last edited by RR joker; 10/09/09 07:38 PM.
_________________________
My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1265383 - 10/12/09 05:54 PM
Re: RESPA changes 1-1-10
GoBigRed
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100 Club
Joined: Oct 2004
Posts: 238
Up North
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I have a question on repair inspection fees. The bank selects the appraiser for the inspection and we do not retain the fee. Currently, we disclosed it on line 805 of the HUD 1 and on the GFE. On the new GFE,would the inspection fee be on Block 3 and subject to the 10% tolerance? The 10/7/09 Q & A for GFE - Block 1 question 2 indicates the lender inspection fees would be part of "Our origination charge" in Block 1 but we are not retaining the fee.
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If you keep doing what you've always done, you'll get what you always got.
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#1265443 - 10/13/09 01:24 PM
Re: RESPA changes 1-1-10
GoBigRed
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10K Club
Joined: Nov 2000
Posts: 18,765
Central City, NE
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Even though a signature is not required on the GFE, are we allowed to add a signature page/line at the end of the new form? No. You can't alter the GFE form. You could have a separate page that acknowledges receipt of the GFE.
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#1265451 - 10/13/09 01:37 PM
Re: RESPA changes 1-1-10
David Dickinson
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Platinum Poster
Joined: Dec 2005
Posts: 553
USA
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Can someone provide a link to the final RESPA rule, either in the FR or HUD? I have checked both the FR and HUD and have been unable to locate the document.
Thanks in advance.
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