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#1288236 - 11/17/09 08:53 PM Re: RESPA changes 1-1-10 Reads Regs
Frank Offline
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Central Arkansas
One thing I noticed that was incorrectly disclosed was the home warranty.

If I am reading the FAQ's right on page 45 Q#3 states that the comparison chart must include any amounts shown on page 2 of the HUD-1 in the column as paid by the borrower.....

I don't see this on the OTS's example. Which leads me into the problem I have of disclosing credit life insurance. my understanding is that credit life is disclosed on the GFE as part of the principal balance-not as a charge in one of the blocks (received guidance on this via a HUD Respa compliance specialist)(this goes against the FAQ guidance of no discretionary charges are to be included in monthly amount of principal,interest, mtg insurance disclosed). On the Hud-1 it would be disclosed on a line-therefore it would have to be disclosed on the comparison chart but it would not show an amount under the GFE side of the comparison chart. So, it looks skewed.

I wonder if a person could disclose the credit life amount on the GFE part of the comparison chart so that it would give the consumer a better picture of what's going on.

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#1288293 - 11/17/09 09:20 PM Re: RESPA changes 1-1-10 Frank
RR Joker Offline
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Go Hogs...I think it depends on whether your credit life is financed or paid monthly. If the first, it's part of the loan balance and included in the P&I. If it's the latter, it's not shown.
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#1288345 - 11/17/09 09:44 PM Re: RESPA changes 1-1-10 RR Joker
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HUD has updated the FAQs today (11/17). http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm

They are 49 pages. See the items in boldface type on pages 5, 9, 12, 16, 32, 36, 44, 45, and 46.
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#1288371 - 11/17/09 09:57 PM Re: RESPA changes 1-1-10 Reads Regs
TB 12 Offline
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Thanks Reads.. I am glad they cleared up the font size contreversy..... :sarcastic smiley:
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#1288470 - 11/17/09 10:46 PM Re: RESPA changes 1-1-10 TB 12
Sewanee, CRCM Offline
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Last week I e-mailed HUD concerning the issue of whether the GFE and/or HUD could/should have an additional form which the borrower (and seller on the HUD-1 in the event of a sale) would sign, since the new forms don't have signature lines. This is what I received today:

"The GFE and HUD-1 are prescribed forms. The new RESPA Rule does not require signatures on the GFE or HUD-1." How helpful!

How will others handle this? Will you get signatures concerning either of these documents? Will sellers run into problems proving they sold their property if they can't produce a "signed settlement statement"? I'm curious.
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#1288507 - 11/17/09 11:44 PM Re: RESPA changes 1-1-10 Sewanee, CRCM
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Is it me, or do the FAQs have a snarky tone about them?
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#1288528 - 11/18/09 02:56 AM Re: RESPA changes 1-1-10 rlcarey
Sheldon Hendrix Offline
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HUD is now requesting that regulators exercise restratint for the first four months after the rules become effective.

"HUD is asking other federal and relevant state enforcement agencies to exercise the same 120-day restraint in enforcement for non-FHA originators and other settlement service providers who demonstrate the good faith effort to implement RESPA's new rules. In determining whether a mortgagee has made a good faith effort, MRB staff will consider whether the mortgagee has relied on the new RESPA rule and other written guidance issued by the Department, and the extent to which the mortgagee has made sufficient investment and commitment in technology, training, and quality control designed to comply with the new rule."

http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2009/HUDNo.09-215

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#1288530 - 11/18/09 03:25 AM Re: RESPA changes 1-1-10 Princess Romeo
Kathleen O. Blanchard Offline

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I think we are in an alternate universe!
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#1288532 - 11/18/09 03:35 AM Re: RESPA changes 1-1-10 Weeble Woman
David Dickinson Offline
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Originally Posted By: Weeble Woman
If I accept an application in December 2009 and use the current GFE, which GFE do I use if I need to redisclose after January 2010? Thanks for any and all replies, and I apologize if this has already been addressed and I couldn't find it.

Q&A #3 from the GFE General section:
3) Q: If a GFE is issued on the old form prior to January 1, 2010, and the loan will close after January 1, 2010, which HUD-1 form is to be completed by the settlement agent?
A: If a GFE is issued on the old form prior to January 1, 2010, then the old HUD-1 form must be used even if closing will occur after January 1, 2010. For GFEs issued on the old form, the loan originator has the option to reissue the GFE (with the same terms and charges) on the new form, in which case the settlement agent must complete the new HUD-1 form.
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#1288591 - 11/18/09 01:34 PM Re: RESPA changes 1-1-10 David Dickinson
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Hey guys...I sent a couple of questions to HUD the other day...one I won't even bother posting as it was NOT helpful...however, I sent one in regarding sales contracts whereby it shows the seller paying closing costs...this is my question and their answer...it's kinda interesting. It boils down to...just like the Q&A says..regardless of who pays, if it's typically [can be] paid by the borrower...you disclose it.

I know that the Q&A’s address items typically paid by the purchaser being disclosed on the GFE, including owner’s title insurance on purchase transactions even when they are typically paid or required by state law to be paid by the seller. However, the question has come up when you have a sales contract whereby the seller is paying all closing costs, or up to a percentage of those costs normally paid by the buyer. If you have that contract, should you still be showing all fees paid by the purchaser, then credit on the HUD 1, or should you disclose it (as has been done in the past) based on the contract terms.

There is a lot of disagreement on this situation and we need to be playing by the same rules in order for comparison shopping to make any sense.

Please advise,


Hi Suzy:
There is no disagreement at HUD on this issue. The contract provides no justification for failing to disclose those charges the borrower in the locality will normally pay. If you live in an area where the local industry participants have not settled upon who pays what in the typical situation, we would be interested in hearing about it.


and he sent his name and contact, it wasn't generic like the other one I sent.

Anyway...and comments from ya'll?
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#1288597 - 11/18/09 01:37 PM Re: RESPA changes 1-1-10 David Dickinson
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To Reads Regs - Thank you so much for filtering out the additions in the RESPA FAQs. After noon CST, or maybe before, I'll toast a shot of Captain Morgan to you!!

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#1288599 - 11/18/09 01:39 PM Re: RESPA changes 1-1-10 WHEDA
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RRJoker-agreed. One of the few changes that is clear and straightforward-whether or not it makes sense.
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#1288641 - 11/18/09 02:30 PM Re: RESPA changes 1-1-10 TB 12
pjs Offline
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I agree - it doesn't make sense but HUD is clear on that matter.

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#1288680 - 11/18/09 02:47 PM Re: RESPA changes 1-1-10 pjs
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It makes sense when you think it through. Just because a seller is paying all closing costs, or a percentage there of, you know it's built into the price, so in all fairness...maybe a borrower should be aware of all the costs involved. So be it...now they will be.

It would be nice if they had included a seller "credit" section on the form, however.
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#1288733 - 11/18/09 03:20 PM Re: RESPA changes 1-1-10 RR Joker
Shananighan Offline
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Montana
RR Joker - At least you received an answer. I emailed them on 10-29 about the "Owner's Title Ins." discrepencies in their Q&A and have not received anything back.
Your answer however is as clear as the rest on their Q&A's. I am assuming the "disagreement" you talk about is between you and your fellow employees and not HUD's disagreement on the issue. smile

I still don't think that everyone is on the same page regarding "Owner's Title Ins." - to disclose or not to disclose? We have attended several training sessions on RESPA and the answers have been split. Maybe we should test this issue during the 120 day period. wink (If our regulator follows HUD's guidance on this of course)

Question to all: I was speaking with a gal from the title co. the other day. I asked her if they were going to use average charges for recording fees, etc. as I heard (or read) that a majority of title co's are going to do this. She stated yes and that one of their lenders (won't mention the big bad name) is requiring them to for their loans. She asked me if they are required to use average charges for everyone or if it is up to the lender. So if one lender "requires" the use of average charges does the title co have to apply this to all lenders?
Thanks for your responses in advance. I told her I would see what I could find out.
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#1288777 - 11/18/09 03:53 PM Re: RESPA changes 1-1-10 Shananighan
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Can we simply provede a copy of the 1st page of the GFE provided to the borrower to the title company to give them the "terms" information for them to complete the last page of the HUD?

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#1288813 - 11/18/09 04:16 PM Re: RESPA changes 1-1-10 Ninky
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I had a long chat with one of our closing attorneys about this. The key is making sure the lender quotes the correct (or enough) fees up front to make sure the closing agents costs are covered. Since all of the fees like wire, copy, closing, doc prep, overnight, etc are lumped together, it could be tough to make sure they are accounted for. Her comment to me was "are we going to be stuck eating fees if you don't quote enough?" which is a fair concern. I have come up with a figure for a purchase and one for a refi (since refi's usually have additional overnight fees to send payoffs) which should cover "normal" costs for these items.

Ultimately, you will be sending the intial and final numbers over to them for the closing.
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#1288882 - 11/18/09 05:03 PM Re: RESPA changes 1-1-10 TB 12
Amos Offline
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I submitted the following question to HUD this morning. Their reply is shown below.

We are requesting clarification on the proper disclosure on the new GFE of the cost of an owner’s title insurance policy.

FAQ #2 in the section “GFE – Seller paid items” and FAQs #1 and #2 in the section “GFE – Block 5” (see below) seem to contain conflicting information in the situation where the borrower typically would not incur charges for the owner’s title insurance policy. In Wisconsin, the seller is required to furnish and pay for the owner’s title insurance policy. FAQ #2 in the section “GFE – Seller paid items” leads me to believe that we would not disclose the cost of the owner’s title insurance policy on the GFE for a purchase transaction in Wisconsin, since the borrower would not typically incur this charge. However, FAQs #1 and #2 in the section “GFE – Block 5” seem to contradict this.

Are we, or are we not, required to disclose the cost of the owner’s title insurance when the borrower would not typically incur this charge?

“GFE – Seller paid items
2) Q: Are charges to the seller listed on the GFE?
A: RESPA requires that only the borrower receive a GFE. The GFE is defined as an estimate of settlement charges a borrower is likely to incur in connection with the settlement. Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—do not have to be included on the GFE. If the borrower typically would incur charges for title services and lender's and owner's title insurance, the GFE instructions make it clear that those charges are required to be listed regardless of whether, for example, the contract requires the seller to pay for the service. If there is a question about whether the borrower or seller is to pay for a particular settlement service, the charge for that service should be disclosed on the GFE.”

“GFE – Block 5
1) Q: Do loan originators have to provide a price for Owner‘s title insurance on the GFE?
A: Loan originators must provide an estimate of the charge for an Owner‘s title insurance policy in Block 5, ―Owner‘s title insurance on the GFE on all purchase transactions. For non-purchase transactions, the loan originator may enter ―NA or ―Not Applicable in this Block.
2) Q: If a seller typically pays for the Block 5, ―Owner‘s title insurance, does the charge still have to be shown on the GFE?
A: Yes, an estimate of the cost must be shown in Block 5, ―Owner‘s title insurance for all purchase transactions regardless of who is selecting or paying for it.”

HUD's response:
#2) states: Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—DO NOT HAVE TO BE INCLUDED ON THE GFE. (This occurs when you know that the borrower will not incur the fee)

Include the charges on the GFE only if the borrower will pay for them as state in the below statement OR if the borrower would TYPICALLY pay them.


If the borrower typically would incur charges for title services and lender's and owner's title insurance, the GFE instructions make it clear that those charges are required to be listed regardless of whether, for example, the contract requires the seller to pay for the service.

Cheryl,
RESPA Compliance Specialist

Last edited by Amos; 11/18/09 05:06 PM.
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#1288895 - 11/18/09 05:17 PM Re: RESPA changes 1-1-10 Amos
Shananighan Offline
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Cheryl,

Unless I am missing something, there still is no clear answer. By the way, this is exactly what I submitted to them in October and never got a reply.
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#1288921 - 11/18/09 05:41 PM Re: RESPA changes 1-1-10 Shananighan
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Originally Posted By: Shananighan
Cheryl,

Unless I am missing something, there still is no clear answer. By the way, this is exactly what I submitted to them in October and never got a reply.


I still think that typically means that either party could pay it, but normally the seller does. However, there is a chance the borrower could, so it should be disclosed.

If by law the seller pays a fee, then it would not be disclosed. In NH, the state transfer tax is split between buyer and seller, by law. We only disclose the buyer portion.

When in doubt, disclose.
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#1288927 - 11/18/09 05:43 PM Re: RESPA changes 1-1-10 TB 12
pjs Offline
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Originally Posted By: Sox in 07
I had a long chat with one of our closing attorneys about this. The key is making sure the lender quotes the correct (or enough) fees up front to make sure the closing agents costs are covered. Since all of the fees like wire, copy, closing, doc prep, overnight, etc are lumped together, it could be tough to make sure they are accounted for. Her comment to me was "are we going to be stuck eating fees if you don't quote enough?" which is a fair concern. I have come up with a figure for a purchase and one for a refi (since refi's usually have additional overnight fees to send payoffs) which should cover "normal" costs for these items.

Ultimately, you will be sending the intial and final numbers over to them for the closing.


How did you come up with that Sox? Did you get all the fees from the title co and then average a cost? thanks

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#1288942 - 11/18/09 06:00 PM Re: RESPA changes 1-1-10 pjs
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Right now we dictate the fees our agents can charge for the closing, and allow a reasonable figure for the "junk" charges as i call them (wire, copy, etc). As an example, we allow (in MA) $595 for the closing fee (which covers 1101 to 1107-they can break it out as they see fit), wire, copy, and overnight fees. I On a purch, I am (pending my bosses ok) going to start with the $595, add 15 for wire, 10 for copy, and 25 for overnight. On a refi, I will use the same, but use probably $50 for the overnight (more payoffs to send out). So probably 650 or so on a purch, 700 on a refi.
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#1288953 - 11/18/09 06:11 PM Re: RESPA changes 1-1-10 TB 12
Shananighan Offline
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That is what we were going to do - better to disclose more than needed. Thank you.
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#1288954 - 11/18/09 06:12 PM Re: RESPA changes 1-1-10 TB 12
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Back to WI state law requiring seller to furnish and pay for owner's title policy, Sox, are you saying that your interpretation is that we should leave this off the borrower's side of the GFE as you will be doing with half of the transfer tax as affected by your state law? I'm so confused!

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#1288962 - 11/18/09 06:19 PM Re: RESPA changes 1-1-10 Truffle Royale
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Truff-My thoughts are if the law says the seller has to pay a particular fee, the buyer would never in any situation pay for it, so it would not be disclosed. I could be all wrong, but that is my line of thinking.
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