Thanks pjs. Seems like for our situation, the list of providers is no longer needed since we do not allow the borrower to choose the appraiser, credit co, closing agent and mi company.

Has anyone thought about documenting the applicant's intent to proceed with the application before starting the verification process? David's RESPA training commented on this and that was the first I had heard of it.

Can someone clarify with me please? Average charges...

The reg says "the average amount paid for a settlement service by one settlement service provider to another settlement service provider".

So does this mean if I used average charge for my appraisers, that I would need a separate average charge for each appraiser?

Or does it mean I can average the charges for all of my appraisers together for the same type of appraisal?

I think you can say more than one appraiser. I am basing this off of the word "providers" (plural) in the last sentence of the paragraph below.


3500.8(b)(2) Use of average charge. “(i) The average charge for a settlement service shall be no more than the average amount paid for a settlement service by one settlement service provider to another settlement service provider on behalf of borrowers and sellers for a particular class of transactions involving federally related mortgage loans. The total amounts paid by borrowers and sellers for a settlement service based on the use of an average charge may not exceed the total amounts paid to the providers of that service for the particular class of transactions."

David recommended a cover letter included with the GFE and P-TIL and anything else you are providing to the borrower. State in the letter ~ if you wish to proceed with the loan application, please provide (list the verification documents) as well as a check for (whatever $ amount you want as a deposit). If the borrower brings you these items they are expressing their intent to proceed.

The reg is clear you must have delivered the GFE AND received intent from the consumer before they can be charged any fees and before you ask them for any verification documents. If you read the entire preamble, HUD makes it clear they want disclosures to the applicant quickly, but they want borrower's to be able to slow down the process to shop.

I believe you send a cover letter with the GFE/P-TIL and inform the borrower what you need to proceed. If they provide it, they are expressing their intent to proceed. No need for a signature or disclosure. You might also have a checklist the LO completes that indicates they talked to the borrower. This will be something we'll have to wait and see how the examiners interpret.

BTW, FAQ #28 (in the GFE-General section, added 11/19/09) states "acknowledgment of receipt of a GFE, by itself does not constitute an expression of t an intention to proceed with the loan covered by the GFE."

I think the 11/19/09 FAQs back this up by saying (Average Charges, Question 4, page 31) that the calculation is based on "the average amount paid for the settlement service for the particular class of transaction..."

I think the emphasis is on the service. HUD did not expressly prohibit having more than one provider in a service calculation. This Q & A also reiterates that "HUD does not prescribe a particular method for calculating the average charge..."

We often have in-person mortgage applications where the borrower is bringing in verification documents. We plan on documenting in our procedures that the issuance of the GFE is not conditional on the verification documents and the fee check is the "intent to proceed" but are you saying that after we hand over the GFE, we cannot take those verification docs they have brought in? Do we have to literally send them away and only get those verification documents along with the "intent to proceed" (i.e., the fee check)?

If they bring them to you, you're fine. You can take them. The point is you can't ask for any verification docs until the GFE is issued and they express an intent to proceed.

Thank you DAvid

Is the revised Special Information Booklet available to order yet?

Not yet.

Broker fees question. We do maybe one deal a year that involves a broker so I need a little help on this one. We used to just add thier fees on an empty line in the 800 series. I have read the FAQ and it says the broker fees goes in block 2, either box 2 or 3 but neither one of the choices make sense to me to mark becuase they both state it is for the interest rate, which it is not. It's not a credit so box 2 doesn't apply. Box 3 says it is charge for the interest rate they chose, which it is not. Basically they are paying that extra fee because they didn't come straight to us for the loan. Since it doesn't fit any of the descriptions in block 2, and the borrower chose the broker, we did not require it, where the heck (excuse me) do I put it?

Check out this concerning broker's and YSPs:
http://www.respalawyer.com/2009/10/respa_reform_ivy_jackson_issue.html

I don't know about the rest of you, but most of our appraisal firms have tiered pricing, based on the value of the property. Because of that, we can not use the average pricing method. According to the Q&A, an average charge may not be used where the charge for the service is based on the property value.

And since we will not know at the time of providing the GFE which appraisal firm will get the assignment, I'm not sure what figure we will use for an appraisal fee.

Sorry, I still don't understand. We close our own loans on hold them in our portfolio so there is no YSP. We charge a 1% fee but the broker charges them 1.50%, so the borrower is charged 2.50%. How do we list that?

I've also been reading some more on the broker deals. If I understand what I am reading, the broker is the one that actually would be preparing the GFE and then we have to live with the fees they quoted? Does a broker usually know what institution they are having the borrower go to for financing to even be able to quote our fees? As you can tell I know nothing about broker deals.

Just because you close and hold the loans doesn't mean there isn't a YSP. A YSP is the fee you pay to the broker. They MUST be disclosed on the GFE/HUD-1.


Crazy, but true.


That depends on your brokers and your institution. You'll need to discuss this with your lenders.

Becky originally posted this question and i didnt see a response and we are in the same boat. How are people addressing this situation? "Becky S.
Can someone direct me to finding an answer to the following: On construction/perms we may do several inspections throughout the construction phase. Sometimes the inspections are done by bank staff and sometime by an appraisers. We typically charged a fee per inspection - can we just increase our origination fee and eliminate the inspections fee?"

Also, along the same lines, for each disbursement, we get a disbursement endorsement from the title company. How can we determine an amount to put with the title fees if we are uncertain with how many draws or disbursement endorsements we will need?

Does anyone know if we can purchase the settlement cost booklet yet? What is the link. For some reason, I can't find it.

You don't want to purchase the books when you can order them through the HUD website for no fee. I tried to pre-order from HUD but they told me that the books were not ready and to call back the first week of 1-2010 to see if they were done.

Our loan software dealer is trying to get us to buy the books from them. They are not cheap. We are going through HUD when the books are done.

It was my understanding that it has not been updated yet.

It hasn't been update yet. Here is HUD's distribution center phone # 1-800-767-7468

Thanks!

I am going through the GFE and in block three do we need to seperate the flood fee out into initial and LOL? On the old GFE, we have always seperated out the intial fee and life of loan monitoring fee since the LOL is a prepaid finance charge.

No problem.

I've seen it written with flood determination/life of loan and the full amount on the GFE. The LOL is a prepaid so it would carry to the ETIL.

David or the others could answer that question I'm sure better than I did for you.

We have been told in the past to seperate out since one is a prepaid finance charge so now I wonder if we will still need to seperate.