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#1324245 - 01/13/10 10:12 PM
Re: RESPA changes 1-1-10
4newt
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Power Poster
Joined: Jun 2001
Posts: 8,272
Where the heart is
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Here's the problem with the whole "Credit Report Fee" debacle - some institutions order a separate type of credit report such as a "tri-merge" or similar type of product which comes with standard cost - typically $20 to $35 for an individual report, pricing may be different for a joint credit report.
In that instance, it is pretty easy to diclose the fee whether you are charging the borrower or simply eating it.
The PROBLEM is for those institutions that use a typical Experian, Equifax or Transunion report that would also order for an auto loan request, credit card request, or for a guarantor on a business loan. This is most common in smaller institutions that have only one account set up with the credit bureau, and the fee is based on tiered volume - for example $3.00 per report for the first 100, $2.75 for the next 500, and so on, and I've seen the pricing for monthly tiers and quarterly tiers.
In those situations the lender typically does not charge the borrower specifically for the credit report fee, and indeed may not even KNOW what the specific fee for that request is until 90 days after the report has been ordered.
So to start including these on the GFE and HUD just gets messy and frankly wanders into the territory of "I really don't care about this piddly fee, but please tell me more about my options on loan points" for the borrower. It becomes obsessive/compulsive compliance that would make Monk proud.
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#1324267 - 01/13/10 10:26 PM
Re: RESPA changes 1-1-10
Princess Romeo
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100 Club
Joined: Dec 2009
Posts: 184
TX
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We are doing a in house renewal and extension of a 5Y balloon and the seller must pay interest at closing. Do we need to reflect this interest payment on our GFE?
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#1324271 - 01/13/10 10:27 PM
Re: RESPA changes 1-1-10
OldSchoolBanker
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10K Club
Joined: Oct 2006
Posts: 14,390
Cheeseheadland
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So on a GFE for a condo purchase, where the association pays the hazard insurance out of the HOA dues, what do we put in block 11?
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#1324289 - 01/13/10 10:41 PM
Re: RESPA changes 1-1-10
RR Joker
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Gold Star
Joined: Aug 2004
Posts: 394
oklahoma
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RESPA covered construction loan. $ 175,000.00, 1yr. advancing@ 6.35% fixed, interest due at maturity
what should we put in "summary of your loan" for the monthly payment?
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#1324294 - 01/13/10 10:45 PM
Re: RESPA changes 1-1-10
parr04
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100 Club
Joined: Nov 2004
Posts: 237
USA
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RESPA covered construction loan. $ 175,000.00, 1yr. advancing@ 6.35% fixed, interest due at maturity
what should we put in "summary of your loan" for the monthly payment?
This question has been asked a couple of times in different threads, and I don't think anyone knows the answer. We have decided to disclose a payment equal to the monthly interest owed for the full loan amount [(loan amount times interest rate) divided by 12].
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#1324355 - 01/14/10 12:45 PM
Re: RESPA changes 1-1-10
JBledsoe
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10K Club
Joined: Aug 2004
Posts: 10,321
oHiO
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ok i hope you guys can help with this one.
We have issued our first GFE and it is available for 10 days. on the 6th day say, we have to reissue because of a changed circumstance and the rate is not locked. I understand that we have to start the 10 day availablity over again. Now what i need to know is, after we have done the reissue and the GFE starts over, can we close before that second 10 day period is up??
i hope this makes sense, we were having a discussion.
Thanks! Jessie Yes, you can.
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#1324400 - 01/14/10 01:50 PM
Re: RESPA changes 1-1-10
pjs
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Platinum Poster
Joined: Nov 2005
Posts: 614
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Stupid question warning - If we are doing a single pay loan with monthly interest payments, is this considered a balloon payment for the loan summary section of the GFE?
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#1324407 - 01/14/10 01:55 PM
Re: RESPA changes 1-1-10
#Just Jay
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Power Poster
Joined: Feb 2005
Posts: 6,559
Foxboro
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So on a GFE for a condo purchase, where the association pays the hazard insurance out of the HOA dues, what do we put in block 11? I wouldn't put anything there except when the borrower needs to obtain seperate H06 coverage which in some cases escrowing is required. In our shop, if the loan went through DU and the master policy does not include HO6 coverage, the borrower must obtain it and we escrow. If it is LP, we don't (for now anyway)
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#1324409 - 01/14/10 01:57 PM
Re: RESPA changes 1-1-10
pjs
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Power Poster
Joined: Feb 2005
Posts: 6,559
Foxboro
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ok i hope you guys can help with this one.
We have issued our first GFE and it is available for 10 days. on the 6th day say, we have to reissue because of a changed circumstance and the rate is not locked. I understand that we have to start the 10 day availablity over again. Now what i need to know is, after we have done the reissue and the GFE starts over, can we close before that second 10 day period is up??
i hope this makes sense, we were having a discussion.
Thanks! Jessie Yes, you can. \ If I may add that it can provided the 7 day wait under REG Z is met.
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Best QB Ever. Worst Defense Ever.
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#1324457 - 01/14/10 02:56 PM
Re: RESPA changes 1-1-10
Princess Romeo
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Platinum Poster
Joined: Jan 2004
Posts: 968
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The PROBLEM is for those institutions that use a typical Experian, Equifax or Transunion report that would also order for an auto loan request, credit card request, or for a guarantor on a business loan. This is most common in smaller institutions that have only one account set up with the credit bureau, and the fee is based on tiered volume - for example $3.00 per report for the first 100, $2.75 for the next 500, and so on, and I've seen the pricing for monthly tiers and quarterly tiers.
And why is it this way?? We have had to get with other local vendors and basically tell them they need to set their pricing list & stick to it due to disclosure requirements of RESPA. I see many threads from people struggling with how to disclose this little charge because no one ever knows what it's going to be. Why hasn't a trade association or someone tried to get these large, national vendors to figure out their pricing structure so banks can properly disclose?
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#1324539 - 01/14/10 04:08 PM
Re: RESPA changes 1-1-10
JBledsoe
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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ok i hope you guys can help with this one.
We have issued our first GFE and it is available for 10 days. on the 6th day say, we have to reissue because of a changed circumstance and the rate is not locked. I understand that we have to start the 10 day availablity over again. Now what i need to know is, after we have done the reissue and the GFE starts over, can we close before that second 10 day period is up??
i hope this makes sense, we were having a discussion.
Thanks! Jessie sure you can, as long as you have met the seven day requirement for Reg Z.
Last edited by RR joker; 01/14/10 04:16 PM. Reason: closed the end quote mark
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1324554 - 01/14/10 04:15 PM
Re: RESPA changes 1-1-10
Bullseye
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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The PROBLEM is for those institutions that use a typical Experian, Equifax or Transunion report that would also order for an auto loan request, credit card request, or for a guarantor on a business loan. This is most common in smaller institutions that have only one account set up with the credit bureau, and the fee is based on tiered volume - for example $3.00 per report for the first 100, $2.75 for the next 500, and so on, and I've seen the pricing for monthly tiers and quarterly tiers.
And why is it this way?? We have had to get with other local vendors and basically tell them they need to set their pricing list & stick to it due to disclosure requirements of RESPA. I see many threads from people struggling with how to disclose this little charge because no one ever knows what it's going to be. Why hasn't a trade association or someone tried to get these large, national vendors to figure out their pricing structure so banks can properly disclose? We are using a blended average charge.
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1324556 - 01/14/10 04:17 PM
Re: RESPA changes 1-1-10
MarieR
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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Stupid question warning - If we are doing a single pay loan with monthly interest payments, is this considered a balloon payment for the loan summary section of the GFE? yes
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1324578 - 01/14/10 04:28 PM
Re: RESPA changes 1-1-10
Kahola
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100 Club
Joined: Sep 2009
Posts: 213
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We have a complete application and mailed the GFE, Intent to Proceed, etc to the borrower last week. This week the borrower brought in the signed "Intent to Proceed" and we requested the check for the appraisal. The borrower decides to lock the rate. Now a new GFE is being prepared for the rate lock under a changed circumstance. Do we have to wait for the second "Intent to Proceed" or is the first one sufficient?
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#1324597 - 01/14/10 04:48 PM
Re: RESPA changes 1-1-10
David Dickinson
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100 Club
Joined: Sep 2009
Posts: 213
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David, in your opinion, would it be acceptable to collect the appraisal fee after you have received the first intent to proceed, or should you not collect any fee, other than the credit report, until after you receive the subsequent intent to proceed?
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#1324705 - 01/14/10 06:07 PM
Re: RESPA changes 1-1-10
David Dickinson
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10K Club
Joined: Nov 2000
Posts: 18,765
Central City, NE
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What we are seeing is inconsistent answers from HUD through emails. Unless it comes from the regulation or is in the FAQs, I advise not relying on it.
HUD: Are you reading this? You've got to update your FAQs with the issues were posting here! I sent the following to David Friend at HUD: -------------------------------------------------------------- I can’t imagine how busy you are with the RESPA changes that went into effect in January, but I wanted to bring your attention to the mass confusion at Bankers Online. When you called me a few weeks ago, you indicated you had read a post I made (quoting an email I got from HUD about transfer taxes that was incorrect). Have you been reading the posts lately? Please review this thread that over 1700 posts to it. http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1324593&#Post1324593If you start at the back and move up, you’ll see numerous posts with inconsistent answers from HUD. For instance: I've received some responses to questions I've asked HUD...I thought the replies might be helpful. 1. If the lender does not charge the customer for a credit report does it still have to be disclosed on the GFE and on the HUD as POC Lender? HUD Rep's answer-If the charge for the credit report is not charged to the borrower it does not have to be disclosed. 2. If an attorney prepares documents such as Mortgage, Exhibit, Notice of Seizure, Cash Sale, where should the fee be disclosed? HUD Rep's answer was it should be disclosed in Block 4. 3. When and where to disclose property tax on the GFE and HUD 1/1A. HUD Rep's reply was that the only time property taxes are disclosed on the GFE is those held in escrow, page 2, Block 9. There are two occasions you will have the borrower paying taxes that do not appear on the GFE: 1. Tax payments due at the time of closing. 2. Adjustments between buyer and seller. In both cases, these must be put either on the HUD1 or HUD1A. You would show the tax adjustment on 107/407 or 211/511 (which ever applies). Tax payments to be dispursed, as in a refinance, should be disclosed in between lines 1302-1305, Additional Settlement Charges, and clearly identified. Just thought I'd share this...hope it is helpful. The first two are NOT consistent with the regulation or FAQs. HUD updated the FAQs on 11/19/09. The December FAQ update changed 1 answer and stated the booklets are now available. Is there any hope for more frequent updates with more information? There are lots of questions that are not answered. I’m advising our clients with the following: “Unless it comes from the regulation or is in the FAQs, I advise not relying on it.” Thank you for any insight you have on this confusion. -------------------------------------------------------------- If I get a response, I'll post it.
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#1324826 - 01/14/10 07:10 PM
Re: RESPA changes 1-1-10
Truffle Royale
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Member
Joined: Jul 2008
Posts: 92
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Does a F/I have to issue a Borrowers Achknowledgement (Intent to Proceed)?
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#1324843 - 01/14/10 07:18 PM
Re: RESPA changes 1-1-10
Pounder
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100 Club
Joined: Apr 2004
Posts: 220
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I have a question on where interest reserves for construction loans would go on the new GFE? I'm thinking it will go in block 9??
Last edited by ML; 01/14/10 07:30 PM.
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#1324915 - 01/14/10 08:06 PM
Re: RESPA changes 1-1-10
RR Joker
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Member
Joined: Jul 2004
Posts: 64
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Where would credit life insurance go on the new HUD?
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