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#1347223 - 02/22/10 09:34 PM Re: RESPA changes 1-1-10 RR Joker
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Originally Posted By: RR joker
FlamingoGal...for line 1 (important dates) we enter the day of application and a time (like the amount of time they are sitting there!) for that info.


FlamingoGal,
RESPA requires the HUD-1/1A be available for the borrower to review at least the day before settlement. How is your bank complying with this requirement if it isn’t locking the rate until settlement? How is your bank preparing the HUDs without locking the rate?

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#1347294 - 02/22/10 11:14 PM Re: RESPA changes 1-1-10 TryN2Comply
Ninky Offline
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What are the penalties with the new RESPA requirements? I know there is more accountability, but monetarily, is there an amt per penalty? Does the regulator impose CMPs or DOJ? I keep hearing $4,000 per penalty....is that correct?

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#1347320 - 02/23/10 01:25 AM Re: RESPA changes 1-1-10 RR Joker
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Originally Posted By: RR joker
FlamingoGal...for line 1 (important dates) we enter the day of application and a time (like the amount of time they are sitting there!) for that info.


I misstated in my earlier post - due to some of the issues, in order to make the files really clear, our mortg. dept. is now having a lock agreement always signed - that gives us a clear date to when the rate is locked. However, what has not changed is that the rate is not always locked before or at the time of providing the GFE.

Although I get that you can put a date/time in line 1 like your bank is RRJoker - is it actually required to always have a date in the field? It is my understanding that all of our systems (we have 3)put "N/A" for lines 1, 3, and 4 if we tell the system the rate is not locked. Once the rate is locked, a new GFE is issued properly completing those fields. I believe that is based upon the following FAQs:

pg 8
19) Q: If a GFE has been provided and the interest rate has not been locked, can the loan originator provide a revised GFE when the borrower later locks the interest rate?
A: Yes, if a borrower locks the interest rate after the GFE has been issued, a revised GFE must be issued within 3 days of the interest rate lock reflecting the date that the interest rate lock is good through in Line 1 and “N/A” in Line 4 of the “Important dates” section of the GFE. Any interest rate-dependent charges (Block 2, Line A and Block 10 on the GFE) and terms that changed must also be updated on the revised GFE.


pg. 21
5) Q: If a lender does not offer a rate lock, how should Line 1 in the “Important date” section on the GFE be completed?
A: In Line 1, the loan originator must state the date, and if applicable, time until which the interest rate for the GFE will be available. If the rate is not available for any period of time, then Line 1 should state “Not Available” or “NA.”

6) Q: If a lender does not offer a rate lock, how should Lines 3 and 4 in the “Important dates” section on the GFE be completed?
A: If the lender does not offer a rate lock, then Lines 3 and 4 of the “Important dates” section should state “Not Available” or “NA.”
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#1347402 - 02/23/10 01:55 PM Re: RESPA changes 1-1-10 CalifDreamin
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flamingogal, I don't see anything wrong with putting NA if a rate has not been locked, in fact, I see some of our samples that have used NA. I also don't see a problem with guaranteeing a rate for a short period of time.

We generally feel our rates ARE available for some amount of time, so that's why we don't generally use NA.
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#1347404 - 02/23/10 01:58 PM Re: RESPA changes 1-1-10 RR Joker
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Thank you, RRJoker - had a short brief of panic.
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#1347409 - 02/23/10 02:06 PM Re: RESPA changes 1-1-10 CalifDreamin
Dan Persfull Offline
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We put the date the GFE is prepared and 4:00 PM in line 1.

From HUD's answer quoted above:

If the rate is not available for any period of time, then Line 1 should state “Not Available” or “NA.”

How much sense does this answer make? If the rate is not available for any period of time then why are you quoting the rate???

From Appendix C:

"Important dates." – This section briefly states important deadlines after which the loan terms that are the subject of the GFE may not be available to the applicant. In Line 1, the loan originator must state the date and, if necessary, time until which the interest rate for the GFE will be available. In Line 2, the loan originator must state the date until which the estimate of all other settlement charges for the GFE will be available. This date must be at least 10 business days from the date of the GFE. In Line 3, the loan originator must state how many calendar days within which the applicant must go to settlement once the interest rate is locked. In Line 4, the loan originator must state how many calendar days prior to settlement the interest rate would have to be locked, if applicable.

So what are you going to tell the applicant, The rate is 5% but BTW that rate isn't available for any period of time? Again HUD's answer makes no sense to me.

My advice is to follow Appendix C.
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#1347412 - 02/23/10 02:11 PM Re: RESPA changes 1-1-10 Dan Persfull
RR Joker Offline
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I agree Dan, I don't like NA...but since it's in the Q&A, for those that do lock rates, I can see a small point to it. (it actually looks "dumb"! crazy I prefer the date/time approach.
Last edited by RR joker; 02/23/10 02:16 PM.
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#1347597 - 02/23/10 05:47 PM Re: RESPA changes 1-1-10 RR Joker
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Our F/I has decided to select required services/providers. No provider list is being given to borrowers. We have an Affiliated Business Agreement (AfB) with a local title company. If we make a referral to this title company we list them in section A of the AfB Disclosure.

Section A states "Set forth below is the estimated charge or range of charges for the settlement services listed. You are NOT required to use the listed provider(s) as a condition for [settlement of your loan on] [or] [purchase, sale, or refinance of] the subject property. THERE ARE FREQUENTLY OTHER SETTLEMENT SERVICE PROVIDERS AVAILABLE WITH SIMILAR SERVICES. YOU ARE FREE TO SHOP AROUND TO DETERMINE THAT YOU ARE RECEIVING THE BEST SERVICES AND THE BEST RATE FOR THESE SERVICES."

If we are not allowing borrowers to select a required service provider isn’t this contradictory? In particular the part that says "You are fee to shop around".

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#1348059 - 02/24/10 01:13 PM Re: RESPA changes 1-1-10 Pounder
ahou Offline
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I'm thinking we would correct the HUD-1 and put a lender cr on pg 1 in the following scenerio. Is this correct? Do we do anything with the comparison chart on pg 3?

Question to HUD:
We disclosed $35 on the GFE and $35 on the HUD-1 at closing. After the loan closes, we receive an invoice for $20. If the $15 difference does not make us out of tolerance - do we have to refund the fee?


HUD's answer:
Keeping the additional $15 can be considered an unearned fee, which is prohibited under RESPA’s Section 8(b). The $15 should be remitted to the borrower once the invoice has been received.
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#1348140 - 02/24/10 02:49 PM Re: RESPA changes 1-1-10 ahou
Dan Persfull Offline
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Quote:
Our F/I has decided to select required services/providers. No provider list is being given to borrowers. We have an Affiliated Business Agreement (AfB) with a local title company. If we make a referral to this title company we list them in section A of the AfB Disclosure.


If you are selecting the provider then there is no referral.


Quote:
I'm thinking we would correct the HUD-1 and put a lender cr on pg 1 in the following scenerio. Is this correct? Do we do anything with the comparison chart on pg 3?


You would show the actual charge on the appropriate line with the credit to the borrower in the 200 series. This would affect your comparison chart on page 3 to show the amount shown on the GFE and the actual charge.
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#1348737 - 02/24/10 09:43 PM Re: RESPA changes 1-1-10 Dan Persfull
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Our Bank recently had an audit and I was cited for not listing the amount of the property and flood insurance on an ARM loan for condo investment. I explained not we do not know what the amount of the insurance is because it is billed and paid by the condo association. The amounts are not listed on our evidence of insurance because the insurance companies cannot list the premiums due to privacy issues with the association. I explained we were only taking one unit not the whole building. I have been told we cannot close a loan if Respa applies unless I have the amount of the premium because this is a requirement that we have property and flood in place and I fully understand and I have evidence but no premium. The insurance company wants to see the reg or law that state we must list the premium.

Does anyone have any suggestions?

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#1348831 - 02/24/10 11:28 PM Re: RESPA changes 1-1-10 rlcarey
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I agree with the Fair Lending potential problem your process could cause.

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#1349094 - 02/25/10 04:19 PM Re: RESPA changes 1-1-10 tcredle
RR Joker Offline
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Originally Posted By: tcredle
Our Bank recently had an audit and I was cited for not listing the amount of the property and flood insurance on an ARM loan for condo investment. I explained not we do not know what the amount of the insurance is because it is billed and paid by the condo association. The amounts are not listed on our evidence of insurance because the insurance companies cannot list the premiums due to privacy issues with the association. I explained we were only taking one unit not the whole building. I have been told we cannot close a loan if Respa applies unless I have the amount of the premium because this is a requirement that we have property and flood in place and I fully understand and I have evidence but no premium. The insurance company wants to see the reg or law that state we must list the premium.

Does anyone have any suggestions?


So...what do they expect you to do? Split the premium by the total number of units or something? (assuming your were privy to that info) That seems a total misunderstanding by the audit firm regarding COA's, IMHO.
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#1349105 - 02/25/10 04:29 PM Re: RESPA changes 1-1-10 RR Joker
Kahola Offline
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Scottsdale, AZ. 85255
FHLMC Delivery fees

In Block 1 we do include any FHLMC add-ons here. Do we need to inlcude FHLMC's delivery fee?

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#1349169 - 02/25/10 05:22 PM Re: RESPA changes 1-1-10 Kahola
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Dovetailing into Kahola's question - should block 1 includ the FHLMC Loan Prospector (or DU) fee paid by the bank?

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#1349203 - 02/25/10 06:01 PM Re: RESPA changes 1-1-10 Moman
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MoMan In my opinion these are lender processing fees and underwriting fees which are block 1. FAQ page 25 answers this question.
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#1349208 - 02/25/10 06:06 PM Re: RESPA changes 1-1-10 OldSchoolBanker
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TCredle - you mention an audit - by whom? Regulators or bank related audit? The OTS has never mentioned condo premiums on HUD before. Since RESPA is focused borrower fees and costs, I cannot imagine this expense is shown since the borrower does not pay it. If HUD had wanted condo fees on the GFE or HUD-1, they would have clearly indicated such on this most recent change.

If your auditors are inflexible - recommend an email to HUD to get clarification.
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#1349321 - 02/25/10 08:09 PM Re: RESPA changes 1-1-10 RR Joker
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On the loan terms section of both the GFE and the HUD, how would you account for interest only payments in the intial payment section? Just use the first interest payment due?

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#1349327 - 02/25/10 08:13 PM Re: RESPA changes 1-1-10 SuperBanker
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Central City, NE
Calculate the total interest that could be due if all principal is advanced. That's your monthly payment.
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#1349351 - 02/25/10 08:32 PM Re: RESPA changes 1-1-10 David Dickinson
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Would you divide it by the number of months the loan would be outstanding?

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#1349390 - 02/25/10 09:09 PM Re: RESPA changes 1-1-10 SuperBanker
David Dickinson Offline
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Yes. Or just caluclate the monthly amount on the entire principal.
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#1349726 - 02/26/10 04:20 PM Re: RESPA changes 1-1-10 David Dickinson
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Between here and there
This question relates to the Webinar Jack and Mary Beth presented last week. On page 5 the table of Applicability and Effective Date shows that sec. 226.5(b)(2)(ii)(B) (periodic statement sent before end of grace period) applies to all open-end consumer credit plans. From all I have read, I believe this only applies to credit cards.
Also, the table shows that 226.7(b)(13) (format for due date, etc.) applis to all open-end consumer credit plans, all open-end (not home secured)consumer credt plans, credit card accounts under an open-end (not home secured)consumer credit plan, and Credit or charge card account subject to 226.5a. Again, I believe this section only applies to credit cards.
Can anyone confirm that these 2 sections apply only to credit cards?

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#1349826 - 02/26/10 05:59 PM Re: RESPA changes 1-1-10 MyScamper
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Regarding the Written List of Settlement Service Providers:

I understand that the old "required providors" disclosure is now basically Block 3 on the GFE. And I know that if we put anything in Block 6 we have to incldue a list of providors on the Written List.

Where I'm getting confused is block 4 and 5. I've been pouring through a keyword search of previous posts and I'm just going around in circles...(I'm not a lender and I don't play one on TV. I'm just a new compliance officer who is wishing I was on a really long vacation.)

We are prohibited from requiring a specific company for title services, so we have to allow them to shop, correct? So we have to disclose one of our desired providors in Block 4 and put them on the Written List, correct?

So if I have a secondary market lender who likes to use title company "A", and a traditional lender who likes to use title company "B", they each list their desired title company in block 4 but the list must contain information on both "A" and "B"? Correct?

So what goes in Block 5?

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#1349912 - 02/26/10 07:02 PM Re: RESPA changes 1-1-10 pacar
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[quote=pacar]

We are prohibited from requiring a specific company for title services, ??? you can select the title company for the borrower. so we have to allow them to shop, correct? No you do not have to let them shop. So we have to disclose one of our desired providors in Block 4 and put them on the Written List, correct? If you want to pick the title company then you put the amount in and do NOT give a list.

So if I have a secondary market lender who likes to use title company "A", and a traditional lender who likes to use title company "B", they each list their desired title company in block 4 but the list must contain information on both "A" and "B"? Correct? You use a set amount no matter what the title company. If a certain lender wants to choose company A, then that's the title company for that loan. You do not have to give the borrower a choice because a different title company is used on another loan. The bank has the right to pick the company for any or all services. If the bank choses all the providers, no lists are required.

So what goes in Block 5? The cost of the owners portion of the title insurance.



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#1349913 - 02/26/10 07:03 PM Re: RESPA changes 1-1-10 pacar
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pacar, you can require the provider for those services. If you don't require a particular provider, then you give a list.

Our lists given from the secondary market vs the "traditional" lender are not necessarily the same list.
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