Skip to content
BOL Conferences
Thread Options
#924859 - 03/18/08 03:30 PM RESPA Overhaul?
Dollye7 Offline
Gold Star
Dollye7
Joined: Jun 2006
Posts: 255
Southwest USA
Is everyone waiting for the final rule to tell what they think about the “RESPA overhaul”?

I was shocked! - well a little shocked to see two new docs show up: the Closing Script and the GFE/HUD1 -1A Charges Comparison Chart.

In addition to training, documentation and maybe a program change, we are going to have to improve our communication with settlement agencies and attorneys - a lot.

BOL’s 3.14.08 summary –
http://www.bankersonline.com/sb/sb_031408.html

Return to Top
Lending Compliance
#925155 - 03/18/08 06:41 PM Re: RESPA Overhaul? Dollye7
sammylou Offline
100 Club
Joined: May 2001
Posts: 186
the tundra
I've been a bit curious at the lack of comments in these threads about the proposal, too. My thought is this will be a lot like the USA Patriot Act after 9/11 - they got the old Know Your Customer rules in after a major national issue. With all the "subprime crisis" hoopla, perfect time for HUD to get regulatory change through with little resistence because of the political environment. Just my two cents.

This is going to be major from all elements - systems, training, processes, procedures, and as you mentioned, a whole lot of fun and new complexity working with the title companies and attorneys on closings.

And whatever the govt estimates for time and costs to implement - double it or more. Not looking forward to the next 18-24 months in the lending compliance world...
_________________________
The views expressed are not necessarily those of my employer.

Return to Top
#925172 - 03/18/08 06:50 PM Re: RESPA Overhaul? sammylou
ktac MITCH Offline
Diamond Poster
ktac MITCH
Joined: May 2005
Posts: 1,813
Giant side of TX
Sammylou, I think your 2 cents worth is right on target. 9/11 = more BSA (add to the mix GAO report that accused regulators of not doing enough on BSA & we have the current environment)
Sub-Prime Crisis = at least the RESPA changes and likely more stuff we haven't envisioned yet, but some congressional staffer who thinks all banks are the bad guys, is working on it already.
_________________________
My opinions are just that, and might be worth what you paid for them.

Return to Top
#925392 - 03/18/08 08:53 PM Re: RESPA Overhaul? ktac MITCH
pjs Offline
10K Club
pjs
Joined: Aug 2004
Posts: 10,321
oHiO
I find it very interesting and I am excited about some of the changes. Wondering though how long it will take to be final!

Return to Top
#925989 - 03/19/08 04:46 PM Re: RESPA Overhaul? pjs
Andy_Z Offline
10K Club
Andy_Z
Joined: Oct 2000
Posts: 27,748
On the Net
If the existing comment period of 60 days holds true they'll close in May. There is no way of knowing if one or more revised proposals will have to be sent or if they'll conclude in 30 days, 30 months, or longer. The subprime problem certainly stands out. As I read the proposal I could see HUD asking for more CMP authority and between the lines, that the current crisis wouldn't be so bad if they had this already.

Assume they close in May. Final rules could be out by October. If the one-year phase in period holds, that means Q4-09 or early 2010 would be the mandatory date. And while that sounds like it is plenty of time, consider that you're first at the mercy of forms and software vendors. You'll have a huge training burden both for yourself and other trainers, and then your staff and the employees doing the work.

First and foremost, read the proposal. Comment.
_________________________
AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

Return to Top
#925990 - 03/19/08 04:47 PM Re: RESPA Overhaul? pjs
CompDat Offline
Platinum Poster
Joined: Dec 2005
Posts: 553
USA
My guess would be that many seasoned bankers have seen this before with RESPA and have some skepticism as to if the changes will actually be passed.

In another thread, Randy eluded to the fact that he thought this would be very costly. The RESPA analysis seems to confirm Randy's belief, in their cost of compliance analysis. I for one, hope that this gets passed, in a very similar format to the proposed regulations.

The one area I have a question for everyone is how they read the definition of GFE application. If you notice it says that when you have a GFE application, that it must be in writing or a computer generated form. Thus, if you have enough information to make a GFE, you should complete a written application. Thus, now, in order to pull credit you would probably need a written application. Does anyone else see the proposal this way?

Return to Top
#926164 - 03/19/08 06:50 PM Re: RESPA Overhaul? CompDat
Dollye7 Offline
Gold Star
Dollye7
Joined: Jun 2006
Posts: 255
Southwest USA
CompDat - Yes - I agree. It looks like you would have to have the "GFE-App" and then do the GFE and then the "mortgage app"...

Andy - What does the acronym "CMP" in your comment stand for?
"I could see HUD asking for more CMP authority and between the lines, that the current crisis wouldn't be so bad if they had this already."

Thanks!

Return to Top
#926173 - 03/19/08 06:58 PM Re: RESPA Overhaul? Dollye7
M Cockrell Offline
Diamond Poster
M Cockrell
Joined: Jan 2003
Posts: 1,046
Dallas, TX
It's probably a good thing that you're not familiar with that acronym...

CMP = Civil Money Penalty
_________________________
"Remember no man is a failure who has friends." - Clarence (the Angel) Oddbody - It's a Wonderful Life

Return to Top
#927125 - 03/20/08 06:07 PM Re: RESPA Overhaul? M Cockrell
someone else Offline
Power Poster
someone else
Joined: Aug 2004
Posts: 3,300
back to my roots
And, if the Reg Z changes pass, it looks like RESPA and Reg Z will be implemented at about the same time. Talk about massive headaches...

Here's a question I had about the "GFE application"...

It seems to me that you no longer have to pull credit to fall under the GFE app definition. Therefore, pre-quals would fit into this category. Would that, or could that, also extend as far as say online mortgage calculators? I mean, pre-quals really aren't much more than a mortgage calculator put on paper. Thoughts? Would this mean that anytime you provide a mortgage calculator service, you would also have to provide a GFE? Or am I making a mountain out of a molehill?
_________________________
Somewhere, something incredible is waiting to be known. - Carl Sagan

Return to Top
#927137 - 03/20/08 06:11 PM Re: RESPA Overhaul? someone else
sammylou Offline
100 Club
Joined: May 2001
Posts: 186
the tundra
Geez, I sure hope so...
_________________________
The views expressed are not necessarily those of my employer.

Return to Top
#927792 - 03/21/08 03:01 PM Re: RESPA Overhaul? someone else
sammylou Offline
100 Club
Joined: May 2001
Posts: 186
the tundra
I should have been more clear - my "sure hope so" was directed at hoping the thought pattern was making a moutain out of a mole hill. Wasn't implying I hoped that would mean every online calculator would require a GFE... Yikes!
_________________________
The views expressed are not necessarily those of my employer.

Return to Top
#927801 - 03/21/08 03:07 PM Re: RESPA Overhaul? sammylou
CompDat Offline
Platinum Poster
Joined: Dec 2005
Posts: 553
USA
No, I think you still have an inquiry here. That is my opinion, but I dont see you as having the 6 necessary components to make a GFE application.

Return to Top
#927888 - 03/21/08 03:58 PM Re: RESPA Overhaul? Dollye7
CalifDreamin Offline
Diamond Poster
CalifDreamin
Joined: Mar 2002
Posts: 2,262
Far from Calif
I'm curious to hear reactions from everyone too. My suggestion and something we are planning on doing here - take the BOL Summary and the new forms and have your lead processors, closers, and real estate lending supervisors/managers, and perhaps even a loan officer or two read them. Have them take a good look at all of this - then as a group, discuss the good, the bad, and the ugly before you make your comments. What may seem good to me as a compliance officer or even as a consumer, may look entirely different to the people who have to make this work right.

My initial reaction just from a cursory review of the proposal so far is that I can certainly see some good changes. However, I can see quite a few things that are going to cause added confusion, cost more to implement than the benefit derived, etc. I have a concern that with such a short comment period and pressure right now for change, bankers and consumers are going to hate these changes more than than what we have right now.

I think the better approach (one that I know is not likely to happen), would be for all of the regulatory agencies, including HUD, to all get together and work together as a group to make changes to the disclosures so that these disclosures all work together better (GFE, TIL, all ARM disclosures, HUD-1) - without so much overlap, etc. yet still meeting the regulatory requirements. I think part of customer confusion is that there's so much paper with each saying something in slightly different wording than another document (i.e. APR vs. interest rate vs. initial rate, etc.). Too much paper, too little time - customers won't read through it all (just like now) and there will be much pressure from customers, loan officers, title companies, etc. to not read the scripts that are being proposed. Good idea, but I see implementation being quite a challenge.
_________________________
The opinions expressed are mine and do not necessarily reflect those of my employer
_._._._._._.
A.S.A.P.
Always
Say
A
Prayer
<><

Return to Top
#927924 - 03/21/08 04:12 PM Re: RESPA Overhaul? CalifDreamin
sammylou Offline
100 Club
Joined: May 2001
Posts: 186
the tundra
I am with you on the wish that they would do this more cohesively. HUD / RESPA is just one thing. Why not some more coordinated changes between Reg Z, B, C, and RESPA? I would venture a guess that there is more conversation in the BOL threads on what makes an "application" and what that means than nearly any other topic. Now we add "GFE application" to the mix of inquiry, counseling, pre-qual, pre-approval and application.

I don't disagree with trying to provide clearer information to customers at the earliest stage, but at the same time, just changing one regulation (which, by the way, will add even more paper than we have today) will only result in the non-reading of one more set of information. Ooh, except for the Closing Script which will have to be READ to the customer. Wow...

This is going to be a mess. It makes my head hurt... Okay, whining is over for now...
_________________________
The views expressed are not necessarily those of my employer.

Return to Top

Moderator:  Andy_Z