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#1316718 - 01/04/10 03:14 PM Re: RESPA changes 1-1-10 Mrs. Rizzo
Truffle Royale Offline

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This seems to me to be an issue you can argue on either side. I'll try HUD and let you know what they say.

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#1316727 - 01/04/10 03:17 PM Re: RESPA changes 1-1-10 RR Joker
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Curled up by the fire...
What we have been told is application before 01.01.10 - can use old BUT if you use the new, you must use new HUD.

Thanks for checking on it, Truff.
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#1316764 - 01/04/10 03:35 PM Re: RESPA changes 1-1-10 #Just Jay
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I think I need a little reassurance that I have all of this down. The GFE doen't care about who is going to pay the settlement fees. You must show all of the fees regardless of who is going to pay them on the GFE. In order to do that, you have to show that the fees are being paid by the borrower, either in cash or financed into the loan (if you mark paid by seller they will not list on the GFE). On the HUD, you will list the same fees in the buyer column, with a credit from the seller in the 200 series.

This really seems crazy, and looks like the buyer is paying everything. If the fees on the HUD are broken out to the buyer and seller, to show the actual charges to each, there will be a big discrepancy in the comparison table. The charges on the GFE will be quite a bit higher then on the HUD.

Am I missing something, cause I wouldn't want to be the closing agent trying to tell the buyer why all fees are listed for him to pay and none for the seller.

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#1316766 - 01/04/10 03:35 PM Re: RESPA changes 1-1-10 Mrs. Rizzo
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I understood it to be the applcation date as well. App date prior to 12/31 = old form.
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#1316801 - 01/04/10 03:52 PM Re: RESPA changes 1-1-10 Truffle Royale
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Originally Posted By: Truffle Royale
I thought if the application was taken in 2009, you could use the 2009 forms. Where did you find this answer?


I feel you would be splitting hairs on this subject. Probably relativly low risk, but not a cart I am hitching my horse to.
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#1316834 - 01/04/10 04:18 PM Re: RESPA changes 1-1-10 #Just Jay
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We also went with the application date of 1-1-10 to start mandatory use of the new forms.
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#1316867 - 01/04/10 04:52 PM Re: RESPA changes 1-1-10 MarieR
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we used disclosure date.
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#1316868 - 01/04/10 04:57 PM Re: RESPA changes 1-1-10 RR Joker
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I just s/w our disclosure person-pretty much not an issue-we had very little new business last week so we had a pretty clean cut off.
Last edited by Sox in 07; 01/04/10 04:58 PM. Reason: change to week from year.
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#1316887 - 01/04/10 05:09 PM Re: RESPA changes 1-1-10 HallieK
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Originally Posted By: HallieK
I think I need a little reassurance that I have all of this down. The GFE doen't care about who is going to pay the settlement fees. You must show all of the fees regardless of who is going to pay them on the GFE. In order to do that, you have to show that the fees are being paid by the borrower, either in cash or financed into the loan (if you mark paid by seller they will not list on the GFE). On the HUD, you will list the same fees in the buyer column, with a credit from the seller in the 200 series.

This really seems crazy, and looks like the buyer is paying everything. If the fees on the HUD are broken out to the buyer and seller, to show the actual charges to each, there will be a big discrepancy in the comparison table. The charges on the GFE will be quite a bit higher then on the HUD.

Am I missing something, cause I wouldn't want to be the closing agent trying to tell the buyer why all fees are listed for him to pay and none for the seller.

You've got it right - crazy it is.
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#1316891 - 01/04/10 05:13 PM Re: RESPA changes 1-1-10 David Dickinson
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On the important date section..if the rate is locked at application, how should line one read? If we required to go into settlement within 45 days, shoud line 1 be 45 days that the rate is available?

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#1316939 - 01/04/10 05:48 PM Re: RESPA changes 1-1-10 DD Regs
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Originally Posted By: DD Regs
Thanks, that is what I thought based on the FAQ's, but the staff is arguing that the application date drives the use.

2) Q: When will the use of the new GFE and HUD-1 forms be required?
A: The new GFE and HUD-1 forms must be used as of January 1, 2010. The new GFE and HUD-1 forms may be used before this date. Please note that if a loan originator issues a GFE on the new form, then the settlement agent must use the new HUD-1 form and the tolerances and other requirements in the revised RESPA regulations will apply.


I am using the argument that since the FAQ does not say other wise they mean you have to use it starting Jan1, 2010.


I sent an e-mail to my lenders that stated the following:
The use of the new GFE and HUD-1/HUD-1A forms is not based on the application received dates. The new GFE must be used for all GFEs issued on or after 1/1/2010. The following language is from page 5 of 51 of the 11/19/09 HUD RESPA FAQs.

"2) Q: When will the use of the new GFE and HUD-1 forms be required?
A: The new GFE and HUD-1 forms must be used as of January 1, 2010. The new GFE and HUD-1 forms may be used before this date. Please note that if a loan originator issues a GFE on the new form, then the settlement agent must use the new HUD-1 form and the tolerances and other requirements in the revised RESPA regulations will apply.

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."

The following is from Regulation X.

" 3500.1 Designation and applicability.
(a) Designation. This part may be referred to as Regulation X.
(b) Applicability. The following sections, as revised by the final rule published on November 17, 2008, are applicable as follows:
(1) Sections 3500.8(b), 3500.17, 3500.21, 3500.22 and 3500.23, and Appendices E and MS-1 are applicable commencing January 16, 2009.
(2) Section 203.27, the definitions other than "Required use" in 3500.2, 3500.7, 3500.8(a) and (c), 3500.9, and Appendices A and C, are applicable commencing January 1, 2010."

Section 3500.7 is the section that addresses the Good Faith Estimate. Sections 3500.8(a) and (c) address the HUD-1/HUD-1A settlement statements and the cure procedures for tolerance violations. Section 3500.9 addresses permissible changes to the HUD-1 or HUD-1A forms. Appendix A contains the instructions for completion of the new HUD-1 and HUD-1A forms. Appendix C contains the instructions for the new GFE.

The following wording comes from the supplementary information section of the final rule published in the 11/17/08 issue of the Federal Register.

"Therefore, use of the new GFE and the new HUD-1/1A will be required as of January 1, 2010. During the transition period, the current RESPA requirements with respect to the GFE and the HUD-1/1A remain in effect and settlement service providers may choose to proceed under either the current GFE and HUD-1/1A requirements or may choose to proceed under the new GFE and HUD-1/1A requirements. However, any settlement service provider who delivers the new GFE prior to January 1,2010, will be subject to all of the requirements related to the new GFE, including compliance with the tolerance provisions and use of the required HUD-1/1A."
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#1316983 - 01/04/10 06:30 PM Re: RESPA changes 1-1-10 Reads Regs
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Has anyone read Mortgagee Letter 2009-53 that was issued on 12/30/09? On page two, it specificallys states "the new regulations, similar to previous practices, do not require or permit the presentation or disclosure of seller-paid credits on the GFE...."

As of 1/1/10, we are REQUIRED to disclose the OTI on the GFE even if the seller will be paying for this service. Is the mortgagee letter contradicting the new RESPA rule and FAQs? I'm so confused.

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#1317025 - 01/04/10 07:01 PM Re: RESPA changes 1-1-10 BNKO
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Originally Posted By: BNKO
Has anyone read Mortgagee Letter 2009-53 that was issued on 12/30/09? On page two, it specificallys states "the new regulations, similar to previous practices, do not require or permit the presentation or disclosure of seller-paid credits on the GFE...."

As of 1/1/10, we are REQUIRED to disclose the OTI on the GFE even if the seller will be paying for this service. Is the mortgagee letter contradicting the new RESPA rule and FAQs? I'm so confused.


Since you brought up ML 2009-53, it also says:

This Mortgagee Letter clarifies how fees and charges for Federal Housing Administration (FHA)-insured loans must be disclosed on the new Good Faith Estimate and HUD-1 Settlement Statement, consistent with changes to the Real Estate Settlement Procedures Act (RESPA). The new forms must be used for mortgages that originated on or after January 1, 2010.

Anyone??

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#1317033 - 01/04/10 07:11 PM Re: RESPA changes 1-1-10 BFaith
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To the first point, no contradiction. Regardless of who is paying the OTI, or any other closing service, the amount must be disclosed on the GFE. They are just clarifing that you will not be able to show the compensating credit on the GFE, like many of us may have in the past (as well as PITI payament and what they will need to bring to closing, or expect to becredited by the seller).

As to the second point, I am not sure what the question is... but if the loan was originated and a GFE issued prior to January 1st on the old GFE, you may continue to use the 'old' forms through the settlement of those deals. If you take an application today, you can no longer use old forms.
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#1317053 - 01/04/10 07:26 PM Re: RESPA changes 1-1-10 #Just Jay
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Thanks Just Jay for the clarification on the seller credits. I tend to over analyze everything I read these days - gee I wonder why???

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#1317059 - 01/04/10 07:27 PM Re: RESPA changes 1-1-10 RR Joker
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We received an application in 2009 and issued a GFE on the old form. However, today (1/4/10), there is a changed circumstance (as defined in the reg). Do we need to issue a new GFE on the new form as of today, or is the old GFE form that we issued still good since the application was received in 2009?

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#1317110 - 01/04/10 08:00 PM Re: RESPA changes 1-1-10 Working From Home
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Monica-the rule of thumb is if it starts on the "old" forms, it can be redisclosed and close on the old forms. The "old" rules apply in that case.
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#1317123 - 01/04/10 08:07 PM Re: RESPA changes 1-1-10 TB 12
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Sox, thanks for ther response. If we stick with the old form, we would not have to redisclose (as there is no such thing as redisclosing an old GFE). Is that correct? Thanks

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#1317126 - 01/04/10 08:09 PM Re: RESPA changes 1-1-10 Working From Home
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You may have to if the loan product changed, or if there were changes that necessitated a new TIL to be sent.
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#1317148 - 01/04/10 08:25 PM Re: RESPA changes 1-1-10 Truffle Royale
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Truffle-

We are still pulling DU/LP without necessarily having "intent to proceed". There is no charge to the borrower for using an automated underwriting system in my bank so I don't see it as an issue. However, we do still plan to decision these appropriately to meet ECOA timeframes...

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#1317155 - 01/04/10 08:29 PM Re: RESPA changes 1-1-10 David Dickinson
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Thank you so much David. Know if I can convince all my lending staff. Maybe I will hold off retiring for awhile. This is almost making sense to me, and that is a really scary thought.

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#1317161 - 01/04/10 08:33 PM Re: RESPA changes 1-1-10 HallieK
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Thank you, Spring Alexander, for the confirmation. I appreciate you taking the time to answer something asked so far back in this thread.

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#1317189 - 01/04/10 08:44 PM Re: RESPA changes 1-1-10 Truffle Royale
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I just want to make sure I have this right - On re-fi transactions we sometimes order an Automated Valuation (AVM) to determine value. The valuation costs approx $25 and we have an Officer do an outside inspection of the property, take a picture and write up an inspection report. We charge a total of $100 for the AVM (to cover both the actual cost and the inspection) - since this is pretty much "internal" we plan on showing the fee in block 1 on the GFE. Are we on the right track?
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#1317260 - 01/04/10 09:28 PM Re: RESPA changes 1-1-10 80's Lady
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If we estimate the settlement charges are available for 10 business days and if we are notified on day 15 XXX company raised their fees, can we redisclose the GFE or are we out the money?

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#1317261 - 01/04/10 09:29 PM Re: RESPA changes 1-1-10 #Just Jay
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Originally Posted By: Just Jay

As to the second point, I am not sure what the question is... but if the loan was originated and a GFE issued prior to January 1st on the old GFE, you may continue to use the 'old' forms through the settlement of those deals. If you take an application today, you can no longer use old forms.


The mortgagee letter, at least how I read it, is saying that any loan originated in 2010 is required to be on the new forms. So, if you're closing a loan today you must use the new GFE and HUD-1. It doesn't make any sense, which is why I was questioning it.

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