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#1269155 - 10/19/09 07:43 PM Re: RESPA changes 1-1-10 RR Joker
SnuffytheSeal Offline
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I have to say - I am still very confused about the written preferred providers of service.

Block 3 - Required Services that we select - are these vendors that are on the written preferred providers of service even though the borrower is restricted to the 1 credit bureau, the 1 flood cert and even though there are 4 appraisers, they don't get the choice there either (thanks to HVCC).

or is my written list limited to the providers of service they CAN shop for - such as title company and (strangely) pest inspection or surveyor even though I don't know any of these providers - that's handled by the settlement agent.

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RESPA
#1269182 - 10/19/09 07:50 PM Re: RESPA changes 1-1-10 David Dickinson
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Here's a question I haven't seen anywhere in the forum yet - and it has to do with the monthly payment - P&I + MI

Is there any type of tolerance on the MI? While I can match the principal and interest payment back to the loan amount, note rate and loan term, I may not know the MI company at the time of the GFE. Each has their own set of rates and risk based pricing (granted which I would know from the credit score) BUT you get my drift. What would happen if I had to change MI in mid-stream and MI company #2 had higher rates. Is that an issue?

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#1269224 - 10/19/09 08:13 PM Re: RESPA changes 1-1-10 SnuffytheSeal
RR Joker Offline
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respa queen...in regard to your first post, the written list is for providers they can shop for (block 4, 5,6 ). Also, the purchaser could never choose their appraiser, even pre HVCC.

on to the second post, monthly MI and PMI isn't contained in a field subject to tolerances. (upfront charges are in the 10% tolerance)
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#1269227 - 10/19/09 08:14 PM Re: RESPA changes 1-1-10 SnuffytheSeal
CompDat Offline
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Yes, the written list is limited to those they can shop.

A 10% threshold should be applied to the MI if they cannot shop. However, you are requiring it, and they cannot shop. You are required to take steps to know the amount or be within 10% before you issue the GFE.
Last edited by CompDat; 10/19/09 08:16 PM.
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#1269343 - 10/19/09 09:57 PM Re: RESPA changes 1-1-10 CompDat
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We have heard that some banks are considering using one fee across the board to originate loans. No pass through or reconciling 3rd party fees.....this is our fee to make this loan to you. There would be no offset, as in a no cost loan, only the one origination fee. No tolerance concerns or redisclosure problems. Is this a possiblity?

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#1269608 - 10/20/09 02:46 PM Re: RESPA changes 1-1-10 Ninky
RR Joker Offline
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Someone mentioned earlier today that BOfA is now charging an application fee...wouldn't this be prohibited by not only the new RESPA, but also the changes effective already in Z? I know they could collect such a fee once the application was accepted by the borrower, but I wouldn't think that would fly up front.

(I'm guessing this is in addition TO a credit report and appraisal fee)
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#1269829 - 10/20/09 05:24 PM Re: RESPA changes 1-1-10 RR Joker
RR Joker Offline
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Question to those of you who "keep" the YSP on above par loans...do you gather from a few of the Q&A's that this will no longer be happening? The only way I can see for it to possibly happen is if you place the part you intend to "keep" in origination charges, and the part, if any, you intend to credit the borrower in Block 2?
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#1269947 - 10/20/09 06:39 PM Re: RESPA changes 1-1-10 RR Joker
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Can anyone tell me where in the @#* property taxes go on the new GFE? For the life of me, I just can't figure out where.

I've had my fair share of RESPA changes for the day - in case you can't tell confused

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#1270099 - 10/20/09 08:16 PM Re: RESPA changes 1-1-10 AuditorK
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In BOL's webinar, RESPA-Implementing the New Rules, it was stated that it should be noted that "No taxes, No PITI" appears on the new GFE." So, it's not that you can't find where to put the taxes, it's that there's no place to put them. The GFE confines itself to escrowed taxes only.

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#1270125 - 10/20/09 08:38 PM Re: RESPA changes 1-1-10 BLPage
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I have a question regarding the GFE and 'Changed Circumstances."

* The GFE is sent out but without a bank origination charge noted.
* The $1M loan is approved by the Loan Committee, but with a 1% origination charge.
* The HUD Line 801/GFE #1 now has a $10,000 variance in the GFE vs. HUD comparison section.

Is the decision to collect the origination fee at time of approval a "changed circumstance" so a revised GFE can go out showing that $10,000 charge increase ? I believe it should be because the collection requirement was not known when the GFE was sent out. We have this happen frequently and I'm creating some training and want to highlight this one way or the other.

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#1270147 - 10/20/09 08:53 PM Re: RESPA changes 1-1-10 BLPage
CompDat Offline
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Wow, a $1MM consumer loan. IMO that is not a changed circumstance. You should not issue the GFE without knowing t he costs. I realize that some loans (like a $1MM loan) just take time. You would just have to inform loan committee that charging that fee is not an option.

But in all seriousness. Do you really think you are going to charge a $10,000 origination fee?

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#1270166 - 10/20/09 09:06 PM Re: RESPA changes 1-1-10 BLPage
#Just Jay Offline
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Originally Posted By: BLPage
Is the decision to collect the origination fee at time of approval a "changed circumstance" so a revised GFE can go out showing that $10,000 charge increase ? I believe it should be because the collection requirement was not known when the GFE was sent out. We have this happen frequently and I'm creating some training and want to highlight this one way or the other.


IMO, no, this would not fly.

You give a quote, customer feels it is the best and decides to go with you, then you tack on the fees and it may be too late for the customer to start over again, so they feel they have to finish financing with you.

This is exactly the type of event and upcharging that the regulations is trying to prevent from happening. Particular fees or either certain price points or loan amounts should be well documented for a lender to refer to and quote at the initial discussion with your client.
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#1270244 - 10/21/09 01:47 AM Re: RESPA changes 1-1-10 #Just Jay
Jan94 Offline
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We struggling with the "intent to proceed" requirement. Would appreciate anyone sharing how they are going to show this. We thought about creating a form that the lender would complete so we would have some sort of documentation but not excited about creating something else. Thank you.

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#1270310 - 10/21/09 12:21 PM Re: RESPA changes 1-1-10 Jan94
ahou Offline
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We will give a notice at application that states something like 'If you wish to proceed with this application for credit, contact us at xxx or visit any office. We will need to collect the following fees at that time. [list of fees]'
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#1270318 - 10/21/09 12:29 PM Re: RESPA changes 1-1-10 RR Joker
RR Joker Offline
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Originally Posted By: RR joker
Question to those of you who "keep" the YSP on above par loans...do you gather from a few of the Q&A's that this will no longer be happening? The only way I can see for it to possibly happen is if you place the part you intend to "keep" in origination charges, and the part, if any, you intend to credit the borrower in Block 2?


Bump...anyone?
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#1270456 - 10/21/09 02:37 PM Re: RESPA changes 1-1-10 RR Joker
Sage Offline
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Does paper size matter? The HUD site now has the HUD-1 as a legal size doc.

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#1270489 - 10/21/09 02:54 PM Re: RESPA changes 1-1-10 David Dickinson
RR Joker Offline
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The Swamp
Originally Posted By: David Dickinson
I've been thinking about optional credit insurance and the GFE. I believe it goes on line 904 (if it's optional) of the HUD-1/1A. If you require it, it appears to go in the 1300 series (included in 1301 and itemized outside the borrower's column).

I now believe that it would not be listed on the GFE if it is not required by the lender. Appendix C of RESPA states to list items required in connection with the loan. Optional insurance doesn't meet this criteria.

As I think about this, many other fees come to mind that are not required for the loan (homeowners association dues, for instance). Read Q&A #9 in the HUD-1 General Section about surveys. There's 4 different answers depending on whether it is required and by whom. Specifically, look at Answer d.


Okay, speaking of optional CL and Disab...and specifically as it applies to page 18, Question GFE-3. If a customer gets optional credit LIFE insurance (they say "credit insurance") and it is a PART OF the principal (not a separate monthly charge)...surely that would be part of the P&I you list, right? not the principal BEFORE Credit life is added...would that be reasonable?
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#1270519 - 10/21/09 03:08 PM Re: RESPA changes 1-1-10 CompDat
David Dickinson Offline
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Central City, NE
Originally Posted By: CompDat
Dave can you help me understand this. I just went back and read the last two posts and your post states:

believe it goes on line 904 (if it's optional) of the HUD-1/1A. If you require it, it appears to go in the 1300 series (included in 1301 and itemized outside the borrower's column)


The way I read it, I would put it the other way around. I think I might be missing something.

There's much confusion this topic. Appendix Z - line 904 states to list insurance "not required by the Lender". So that appears to be optional credit insurance. The 1300 series is used to list services the borrower can shop for - which sounds like insurance that is required. However, it could be credit insurance if the Lender requires it, but allows the borrower to choose the provider.
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#1271025 - 10/21/09 08:37 PM Re: RESPA changes 1-1-10 David Dickinson
RR Joker Offline
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This is how we've interpreted optional credit life and it's how you read "required".

We have it in the 900 series, Items required by lender to be paid in advance. This does not say it's a requirement...it says it's required to be paid in advance.

Section 1300 are REQUIRED services...that you can shop for.

Optional Credit life is not required, thus would not fit that section.
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#1271069 - 10/21/09 09:02 PM Re: RESPA changes 1-1-10 RR Joker
Frank Offline
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Central Arkansas
more on credit life... When we have credit life, it's loaded in the system by adding it to the balance, thus a regular monthly payment consisit of principal, interest, and credit life...in a roundabout way.

On page 1 of the GFE under "summary of your loan" the initial monthly amount owed for P&I, and any mtg insuranc........this amount would not be the true monthly payment if we have credit life as part of the loan. This is addressed in the HUD Q&A on pg 18 #3 on discretianary charges. So in the "escrow account information " you're supposed to disclose this same monthly amount per the Q&A....this seems like it would be deceiving to the consumer when you consider that the number is not the TRUE monthly payment.

It seems almost as if the GFE document does not account for credit life... How will others address credit life in a RESPA transaction?

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#1271107 - 10/21/09 09:53 PM Re: RESPA changes 1-1-10 Frank
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I think (although I'm not sure I'm doing that very clearly these days!) that the idea of credit life is you would not know at application whether or not the consumer would want to purchase it. You would also not necessarily know that your customer would have escrows unless your bank escrows on all loans.

As for where to place credit life on the HUD, I have to agree with RR Joker. It makes sense to me.

Now, when I go to Jack H's seminar on Friday - these answers could all change! laugh
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#1271109 - 10/21/09 09:56 PM Re: RESPA changes 1-1-10 Frank
David Dickinson Offline
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Central City, NE
Originally Posted By: Go Hogs Go
On page 1 of the GFE under "summary of your loan" the initial monthly amount owed for P&I, and any mtg insuranc........this amount would not be the true monthly payment if we have credit life as part of the loan. This is addressed in the HUD Q&A on pg 18 #3 on discretianary charges. So in the "escrow account information " you're supposed to disclose this same monthly amount per the Q&A....this seems like it would be deceiving to the consumer when you consider that the number is not the TRUE monthly payment.

It seems almost as if the GFE document does not account for credit life... How will others address credit life in a RESPA transaction?

I agree. Th GFE does not tell them how much their PITI will be nor will it tell them how much their P& I plus credit insurance will be. HUD doesn't seem to care that the borrowers doesn't know what their monthly payment will be nor what to bring to closing (the GFE doesn't tell them either).
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#1271227 - 10/22/09 12:39 PM Re: RESPA changes 1-1-10 David Dickinson
RR Joker Offline
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I agree that many customer's may not request CL at time of application, so at that point, the P&I will be based on the principal...however, if I had a customer who came in and said...look, banker, I really want life insurance to cover this so my family isn't stuck...and I add it for them...I'm quite sure I will be quoting a P&I with CL (our's is also added to principal). If it was optional monthly, I would not.

I had a discussion with one of our closing attorney's yesterday and we are planning on getting together to discuss how they will lump their fees and I am drafting a letter to all of our listed attorneys so they can break things down for us...I mean come on...we have to be able to figure the title insurance, lender and owner, right, and know what all will be in their lumped fee, right?

In addition, I spoke with my compliance contact at FRB ATL yesterday...they will be "sorting it out as time goes by"...well...what can I say, it's not their regulation, after all! wink Anyway, he suggested that since they (attorney's) will have to lump their fees, FC as well as non-FC, that we use the itemization on the TIL or some itemization so that we don't have to count the entire lump in the APR...(of course, with Z's proposed changes, they may eventually all end up as FC's anyway...thus increasing HPML's and HOEPA loans as well...what a wonderful world!)
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#1271371 - 10/22/09 02:19 PM Re: RESPA changes 1-1-10 RR Joker
Reads Regs Offline
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The OTS will be hosting a conference call on 11/2 from 2 to 3:30 PM EST to discuss the RESPA rule. They will have some officials from HUD on the call. Here's a link to the information about the call.

http://www.ots.treas.gov/?p=Events&C...34-86a3226b50d5

The OTS has posted a sample completed GFE and a sample completed HUD-1 form on the page.
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#1271504 - 10/22/09 03:33 PM Re: RESPA changes 1-1-10 RR Joker
Tigg Offline
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Looking for My Happy Place....
Originally Posted By: RR joker
This is how we've interpreted optional credit life and it's how you read "required".

We have it in the 900 series, Items required by lender to be paid in advance. This does not say it's a requirement...it says it's required to be paid in advance.

Section 1300 are REQUIRED services...that you can shop for.

Optional Credit life is not required, thus would not fit that section.


Wait - What if the purchase of credit life is optional, but you only have one provider? (I guess you would call it a required provider.) Then it would still be in the 900 series, right?
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