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#1324938 - 01/14/10 08:27 PM Re: RESPA changes 1-1-10 Pounder
biz Offline
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Midwest
Two escrow related questions-

#1-If we disclose on the GFE that we will require an initial deposit into escrow (box 9) and the loan is later approved without that requirement, would we have to redisclose to correct the information contained in the area to the left of Block 9 and on page 1 (from "yes you need an escrow to no you don't.) Please note the question is not "can we" redisclose, but "must we" redisclose just to tell them, we don't want escrow now?

#2 Block 9- is entitled "initial" deposit. So if a loan has pmi, but no pmi is collected in the "initial" deposit -nor is an escrow cushion for PMI collected and put in escrow at closing, (pmi simply goes in & out beginning with the first payment) should we then list that the "initial" escrow is for recurring charges of taxes and other . . .listing PMI.

I think I'm thinking too much. Its beginning to hurt-its called a headache! Thanks

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#1324941 - 01/14/10 08:28 PM Re: RESPA changes 1-1-10 mariem
David Dickinson Offline
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Central City, NE
Originally Posted By: mariem
Where would credit life insurance go on the new HUD?

Line 904/905 like it did before. You can find all of these answers in Appendix A.
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#1324943 - 01/14/10 08:31 PM Re: RESPA changes 1-1-10 biz
David Dickinson Offline
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Central City, NE
Originally Posted By: biz
#1-If we disclose on the GFE that we will require an initial deposit into escrow (box 9) and the loan is later approved without that requirement, would we have to redisclose to correct the information contained in the area to the left of Block 9 and on page 1 (from "yes you need an escrow to no you don't.) Please note the question is not "can we" redisclose, but "must we" redisclose just to tell them, we don't want escrow now?

No. You are not required to redisclose - ever. Even if fees go up. You would want to redisclose IF fees were going up from a changed circumstance.

Quote:
#2 Block 9- is entitled "initial" deposit. So if a loan has pmi, but no pmi is collected in the "initial" deposit -nor is an escrow cushion for PMI collected and put in escrow at closing, (pmi simply goes in & out beginning with the first payment) should we then list that the "initial" escrow is for recurring charges of taxes and other . . .listing PMI.

I don't believe so. The initial deposit would not include any $ amount for PMI.
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#1324948 - 01/14/10 08:34 PM Re: RESPA changes 1-1-10 David Dickinson
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I have a question and I apologize if it has already been addressed here. We provided a GFE with an origination charge in Line 1 and all other fees to be paid by the bank and therefore offset with a credit amount in Line 2. One of the costs paid by the bank at closing (the recording fee)is less than the amount stated on the GFE. Because of this, the amount of the credit from Line 2 of the GFE is smaller on the HUD than on the GFE. There is a zero tolerance for this item, so our software indcates that we need to reimburse the borrower because we promised a credit amount larger than they received. Is this correct??? Note: there is a 10% tolerance for recording costs, but since the credit amount is the total of all fees paid by the bank it gets incorporated into Line 2 that has a 0% tolerance.

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#1324957 - 01/14/10 08:39 PM Re: RESPA changes 1-1-10 MAG
David Dickinson Offline
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That's correct. I hate this, but you'll find it in the RESPA FAQs - GFE Block#2 - Q&A #1.

What stinks about this is you're not promising to give them money. You're promising to eat a fee. If that fee comes in less than what you thought, you should simply be eating that fee - not give away money.
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#1324988 - 01/14/10 09:14 PM Re: RESPA changes 1-1-10 David Dickinson
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amen to that...this is really messed up.
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#1325002 - 01/14/10 09:39 PM Re: RESPA changes 1-1-10 RR Joker
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New England
I think that I have been interpreting the 10% tolerance incorrectly at my shop. Up until last week, I thought that the 10% tolerance had to be met for each individual box (3-7.) I was recently on a webinar (from a very reliable source) that read the 10% tolerance to go against the SUM of boxes 3 - 7 in total. Very different. I've reread appendix C and this bears it out. Also, if you re-read the second box heading of the GFE on page 3 at the top of the page, it says "the TOTAL of these charges can increase up to 10% at settlement. Is this just a revalation to me?

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#1325006 - 01/14/10 09:45 PM Re: RESPA changes 1-1-10 RR Joker
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We tried a sample HUD with the fee higher than we disclosed and the HUD still looks like we need to reimburse the customer. Do we still need to reimburse if the amount of credit to the customer on the HUD line 802 is a larger amount than we originally stated on line 2 of the GFE?

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#1325035 - 01/14/10 10:24 PM Re: RESPA changes 1-1-10 David Dickinson
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Quote:
#2 Block 9- is entitled "initial" deposit. So if a loan has pmi, but no pmi is collected in the "initial" deposit -nor is an escrow cushion for PMI collected and put in escrow at closing, (pmi simply goes in & out beginning with the first payment) should we then list that the "initial" escrow is for recurring charges of taxes and other . . .listing PMI.

I don't believe so. The initial deposit would not include any $ amount for PMI. [/quote]

I'm not so sure you wouldn't indicate PMI. The instructions for completing the GFE say: "The loan originator must indicate through check boxes if the reserve or escrow account will cover future payments for all tax, all hazard insurance, and other obligations that the loan originator requires to be paid as they fall due. If the reserve or escrow account includes some, but not all, property taxes or hazard insurance, or if it includes mortgage insurance, the loan originator should check ‘‘other’’ and then list the items included."

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#1325039 - 01/14/10 10:29 PM Re: RESPA changes 1-1-10 Mr. E.
David Dickinson Offline
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Central City, NE
That's correct Yaz. The 10% tolerance applies to the total in that bucket. The 0% tolerance applies to each item in that bucket.
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#1325109 - 01/15/10 12:39 AM Re: RESPA changes 1-1-10 David Dickinson
RFitzpatrick Offline
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Pacific NW
Settlement Fees question

Settlement/closing fees are to be included in Block 4 Title Services. I found that in some cases we do our own closings, for these, should the fee be included in our Block 1 origination charges as we keep the funds?
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#1325157 - 01/15/10 01:57 PM Re: RESPA changes 1-1-10 Kahola
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bump

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#1325213 - 01/15/10 03:21 PM Re: RESPA changes 1-1-10 Kahola
David Dickinson Offline
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Central City, NE
If YOU are charging a fee, it goes in Block 1.
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#1325340 - 01/15/10 04:25 PM Re: RESPA changes 1-1-10 Jan94
Jan94 Offline
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Bump - David I saw the post where you indicated the e-mail you received from HUD indicated the CR fee would not be disclosed. We don't do 30 year mortgages so wouldn't have a tri-merge credit fee; for us it is just $2.27. However, HUD's response does not agree with your explanation. Thank you for all you are doing to help us try to understand.

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#1325344 - 01/15/10 04:27 PM Re: RESPA changes 1-1-10 Jan94
RR Joker Offline
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Jan94, I'm sure David will respond to you...but none of us agree with what the rep at HUD said about the CR fee. It has always been required to be shown, whether charged to the borrower or eaten by the bank. Our's is an average of $2.16 and we either charge or give credit for that amount.
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#1325371 - 01/15/10 04:43 PM Re: RESPA changes 1-1-10 Jan94
David Dickinson Offline
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Central City, NE
Originally Posted By: Jan94
Bump - David I saw the post where you indicated the e-mail you received from HUD indicated the CR fee would not be disclosed. We don't do 30 year mortgages so wouldn't have a tri-merge credit fee; for us it is just $2.27. However, HUD's response does not agree with your explanation. Thank you for all you are doing to help us try to understand.

The email I got from HUD was about transfer taxes, not credit report. Credit reports always get disclosed, no matter who pays for it. It's a settlement service. Therefore, it must be disclosed.
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#1325392 - 01/15/10 04:53 PM Re: RESPA changes 1-1-10 David Dickinson
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Originally Posted By: David Dickinson
That's correct. I hate this, but you'll find it in the RESPA FAQs - GFE Block#2 - Q&A #1.

What stinks about this is you're not promising to give them money. You're promising to eat a fee. If that fee comes in less than what you thought, you should simply be eating that fee - not give away money.


A very large lender in our area is temporarily not offering fixed rate home equity loans, "due to new Federal Disclosure Regulations," according to their web site. I'm guessing that it is this very issue driving that decision. And, quite honestly, I'm now getting very hesitant about offering such loans until I get a better handle on this issue.
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#1325395 - 01/15/10 04:54 PM Re: RESPA changes 1-1-10 Jan94
ktac MITCH Offline
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Giant side of TX
I have searched this thread and found a couple of related questions & some ideas but can't find any clear guidance - so here is my question: (I have submitted this tto HUD over a week ago but have not received an answer)
How to properly disclose the GFE for a single pay loan (that is subject to RESPA) that does not have int. monthly pmts; it is truly Balance at Maturity.

A) In the "Your initial monthly amount owed for principal, interest, and any mortgage insurance is"
B) In the " Does your loan have a balloon payment?"
Is the correct Dislcosure :
1. Convert the single payment into an equivalent monthly amount and indicate that amount in the monthly payment box and indicate no balloon payment
Similar to the answer to Q&A # 2 for the "Summary of you Loan" section
OR

2. Indicate $0 or N/A in the monthly payment box and indicate the full amount of principal and interest due at maturity in the balloon payment box

OR

3. Indicate $0 or N/A in the monthly payment box and indicate the amount of principal and interest estimated under the "Construction Calculation" of Reg Z due at maturity in the balloon payment box = The GFE would match the TIL disclosure

I am thinking #1 but the question still remains of whether the Baloon Pmt should be the full amt of Prin plus
A - Interestest on the Full Prin (Giving the applicant a "Worst case scenerio"
OR
B Match it to the TIL (est int on half the baln)
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#1325516 - 01/15/10 06:37 PM Re: RESPA changes 1-1-10 ktac MITCH
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Mitch, I have a similar delima, luckily we require interest monthly, so that parts not too bad. We are disclosing the worst case, sort of. Interest monthly on the full balance and a balloon based on 50% Z figures. right, ,wrong or indifferent, HUD hasn't responded to me either. It's a given interest wont accrue at the full balance for awhile, so I think the balloon at the Z figures is reasonable. To avoid the "payments can rise even if" part, disclosing the worst case on the interest payments seems best.

In your case, I would be tempted to list payments at NA and the Z balloon figure. I might check the balance can rise and in that box figure it at the worst case.
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#1325569 - 01/15/10 07:09 PM Re: RESPA changes 1-1-10 jross
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Originally Posted By: jross
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?



BUMP
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#1325573 - 01/15/10 07:11 PM Re: RESPA changes 1-1-10 MAG
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Originally Posted By: MAG
We tried a sample HUD with the fee higher than we disclosed and the HUD still looks like we need to reimburse the customer. Do we still need to reimburse if the amount of credit to the customer on the HUD line 802 is a larger amount than we originally stated on line 2 of the GFE?


MAG- In this instance,(HUD-1 greater than GFE in a 0% tolerance area) wouldn't the reimbursement, instead of to the borrower, be just an additional amount you (the lender) would eat?

As opposed to the instance where the GFE (Line 2) is higher than the HUD-1, then you would have actual dough ($$$) going to the borrower. Right?

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#1325656 - 01/15/10 08:06 PM Re: RESPA changes 1-1-10 Princess Romeo
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This is the type of credit reports we pull. Our cost is about $1.37 per report. Management wanted me to ask HUD whether or not we had to disclose this, the answer was that if the charge for the credit report is not charged to the borrower, it does not have to be disclosed.

My understanding from the FAQs and the Rule was that it should be disclosed...but after writing to HUD for further clarification and that was the reponse I got...what do I do now?

Sorry to ruffle feathers frown
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#1325737 - 01/15/10 08:34 PM Re: RESPA changes 1-1-10 Likes to Comply
RR Joker Offline
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I don't see that you ruffled any feathers...I think we just are having a hard time relying on that answer because it disputes what has actually been required since the beginning of RESPA.

I can say from years past when I was an originator and from time to time had to call FHA a/k/a/ HUD, I could speak to 2 people and literally get 5 different answers.

I'm afraid that until they put it in writing in the Q&A or somewhere legitimate, these individual answers we are getting to questions may not be very reliable. The few that I have asked, I am keeping records of as a defensive tactic...then if and when they are ever officially answered, I'll act accordingly at that time (if different).
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#1325747 - 01/15/10 08:40 PM Re: RESPA changes 1-1-10 RR Joker
4newt Offline
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East Texas
May or may not be a new question........ If the original const loan was prior to 1-1-10 and now there is need for more funds, do we use the new GFE on the additional amount??? I'm thinking yes. Am I right? I'm sorry, but I'm that confused right now!

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#1325791 - 01/15/10 08:58 PM Re: RESPA changes 1-1-10 Likes to Comply
Angel Eyes Offline
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Originally Posted By: Rookie
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.



It may directly conflict with other direction in the law but what else hasn't eek

You can actually get some support for this opinion from the OTS audio conference notes on page 34. It may not be in HUD's Q&A but it is in writing from a HUD source.

If we waive a fee, does it still have to be listed on the good-faith estimate?

Response from Ivy Jackson with HUD:
Well, I'm- I guess if you're automatically waiving it from the beginning, it's not a charge to the borrower. If you do put it on the GFE...

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