Posted By: RR Joker
RESPA changes 1-1-10 - 08/27/09 05:28 PM
issue #2 sticky
RESPA changes 1-1-10
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 08/31/09 01:16 PM
Thanks to David Dickinson for the heads up on the new RESPA FAQ.
On Friday August 28, HUD issued an updated FAQ:
http://www.hud.gov/offices/hsg/ramh/res/faqfinalrev4.pdf
Question: With the new GFE is it fair to say that it is possible fees that are NOT APR related will be lumped into Block 1 Origination Charges?
Thanks in advance!
On Friday August 28, HUD issued an updated FAQ:
http://www.hud.gov/offices/hsg/ramh/res/faqfinalrev4.pdf
Question: With the new GFE is it fair to say that it is possible fees that are NOT APR related will be lumped into Block 1 Origination Charges?
Thanks in advance!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 08/31/09 05:22 PM
Yes, many fees (such as Document Prep) can be in Block 1 of the GFE that are not FC's.
I'm currently reviewing the new FAQs. Here's what I noticed:
There are 51 new Q&A's from the 8-13 edition. They added them to the end of sections (thanks), but moved several "old" ones (no thanks). They don't make the new FAQs know by telling us which are new, marking them in a new font, etc.
There was no announcement from HUD of which I am aware. They just (secretly) came out. Why? I heard there was to be approximately 200 Q&As, so I guess we should stay tuned for more to come.
For me, personally, this was a pain as I'm preparing to cover these Q&A in a webinar. We had already prepared the materials and was digesting the info. Now we have to start from scratch on the materials. I'm concerned that HUD will do this again before the webinar on 9/24. Oh well - I guess I appreciate them giving us the guidance.
You can find out more about the webinar here:
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1250610623605
I'm currently reviewing the new FAQs. Here's what I noticed:
There are 51 new Q&A's from the 8-13 edition. They added them to the end of sections (thanks), but moved several "old" ones (no thanks). They don't make the new FAQs know by telling us which are new, marking them in a new font, etc.
There was no announcement from HUD of which I am aware. They just (secretly) came out. Why? I heard there was to be approximately 200 Q&As, so I guess we should stay tuned for more to come.
For me, personally, this was a pain as I'm preparing to cover these Q&A in a webinar. We had already prepared the materials and was digesting the info. Now we have to start from scratch on the materials. I'm concerned that HUD will do this again before the webinar on 9/24. Oh well - I guess I appreciate them giving us the guidance.
You can find out more about the webinar here:
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1250610623605
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 08/31/09 05:34 PM
Good ole HUD...the one thing you can depend on...is you really can't! BUT...they never change! 
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 08/31/09 06:39 PM
I imagine the LOS software programmers are screaming today. I forwarded the new FAQ link to our LOS contact. I know they thought they were well on their way to figuring this out but they obviously have to huddle up (pardon the pun).
Posted By: TattChica
Re: RESPA changes 1-1-10 - 08/31/09 08:20 PM
OMG as a loan closer I think I am going to go get in the closet and cry, that was so confusing to read!!!
Posted By: CRAatBOK
Re: RESPA changes 1-1-10 - 08/31/09 09:13 PM
Think about us poor people that don't handle these on a regular basis.
Posted By: Amos
Re: RESPA changes 1-1-10 - 09/01/09 06:26 PM
The August 13, 2009 version of HUDs FAQ's included the following Q&A in the GFE General section:
13) Q: Does a prepayment penalty include the requirement of paying interest on a monthly basis on an FHA loan?
A: No. FHA loans accrue interest on a monthly basis. The payment by a borrower of accrued interest upon payoff of an FHA loan is not a prepayment penalty.
This Q&A was deleted from the August 28, 2009 version of the FAQs. Of course, there was no accompanying explanation for this change. Is anyone interpreting this change to mean that we should disclose that FHA loans have a prepayment penalty?
13) Q: Does a prepayment penalty include the requirement of paying interest on a monthly basis on an FHA loan?
A: No. FHA loans accrue interest on a monthly basis. The payment by a borrower of accrued interest upon payoff of an FHA loan is not a prepayment penalty.
This Q&A was deleted from the August 28, 2009 version of the FAQs. Of course, there was no accompanying explanation for this change. Is anyone interpreting this change to mean that we should disclose that FHA loans have a prepayment penalty?
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 09/01/09 06:37 PM
How is the payment of accrued interest a prepayment penalty? It is simply interest earned.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 09/01/09 06:47 PM
I think the FHA contract includes that if a borrower prepays in full on a date other than a regularly scheduled due date, the borrower can be required to pay interest up to the next installment date. That would be a prepayment penalty under Reg. Z.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 09/01/09 06:52 PM
Quote:
I think the FHA contract includes that if a borrower prepays in full on a date other than a regularly scheduled due date, the borrower can be required to pay interest up to the next installment date.
I was not aware of that.
Posted By: Amos
Re: RESPA changes 1-1-10 - 09/01/09 09:38 PM
For what it's worth, FHA prohibits prepayment penalties.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 09/01/09 09:49 PM
Yes they do, however this is written into their standard loan contracts. The FHA doesn't view this as a prepayment penalty, but Regulation Z does. As such, I imagine that HUD read the "FHA prohibits prepayment penalties" and after further consideration thought they should withdraw the previous Q&A.
Posted By: Amos
Re: RESPA changes 1-1-10 - 09/02/09 12:35 PM
From the Official Staff Interpretations for Regulation Z Section 226.17(a)(i)5: "xi. If a state or Federal law prohibits prepayment penalties and excludes the charging of interest after prepayment from coverage as a penalty, a statement that the borrower may have to pay interest for some period of after prepayment in full. The disclosure given under Section 226.18(k) may state, for example, 'If you prepay your loan on other than the regular installment date, you may be assessed interest charges until the end of the month.'"
We have always included this statement on the TIL for FHA loans. Does this change anyone's mind on whether or not FHA loans have a prepayment penalty?
We have always included this statement on the TIL for FHA loans. Does this change anyone's mind on whether or not FHA loans have a prepayment penalty?
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 09/02/09 01:41 PM
It is what it is - a prepayment penalty. That is why it has to be disclosed on the TIL disclosure and the commentary directly addresses it.
Posted By: Amos
Re: RESPA changes 1-1-10 - 09/02/09 01:51 PM
I'm not sure I follow how the commentary addresses it. The statement, "If a state or Federal law prohibits prepayment penalties and excludes the charging of interest after prepayment from coverage as a penalty,..." seems to open up the possibility that the charging of interest after prepayment is not a penalty.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 09/02/09 05:10 PM
The RESPA FAQs on HUD's web site now have a 9/1/09 date.
http://www.hud.gov/offices/hsg/ramh/res/faqsept109final.pdf
The only difference I can see from the 8/28 version to the 9/1 version is that they removed question 2 from the 800 series. The question was "If an attorney prepares loan documents for a lender, where does that charge go?"
http://www.hud.gov/offices/hsg/ramh/res/faqsept109final.pdf
The only difference I can see from the 8/28 version to the 9/1 version is that they removed question 2 from the 800 series. The question was "If an attorney prepares loan documents for a lender, where does that charge go?"
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 09/03/09 02:48 AM
Originally Posted By: Amos
I'm not sure I follow how the commentary addresses it. The statement, "If a state or Federal law prohibits prepayment penalties and excludes the charging of interest after prepayment from coverage as a penalty,..." seems to open up the possibility that the charging of interest after prepayment is not a penalty.
Reg Z is directly addressing FHA loans in that statement. Federal law prohibits a prepayment penalty on an FHA loan, however it excludes from the definition of a prepayment penalty the charging of interest after prepayment. However, Regulation Z doesn't exclude such a charge as a prepayment penalty and thus gives you an example of the required disclosure in such a case.
Posted By: Amos
Re: RESPA changes 1-1-10 - 09/03/09 12:57 PM
Would this alternative statement for FHA loans replace the statement "If you pay off early you may have to pay a penalty" or would it be in addition to that disclosure?
Also, on the new GFE, even though FHA loans don't have a prepayment penalty, would you then answer "yes" to the question, "Does your loan have a prepayment penalty?" And how would you calculate the dollar amount of the maximum prepayment penalty?
Also, on the new GFE, even though FHA loans don't have a prepayment penalty, would you then answer "yes" to the question, "Does your loan have a prepayment penalty?" And how would you calculate the dollar amount of the maximum prepayment penalty?
Posted By: QCL
Re: RESPA changes 1-1-10 - 09/03/09 01:27 PM
Originally Posted By: Reads Regs
The RESPA FAQs on HUD's web site now have a 9/1/09 date.
http://www.hud.gov/offices/hsg/ramh/res/faqsept109final.pdf
The only difference I can see from the 8/28 version to the 9/1 version is that they removed question 2 from the 800 series. The question was "If an attorney prepares loan documents for a lender, where does that charge go?"
http://www.hud.gov/offices/hsg/ramh/res/faqsept109final.pdf
The only difference I can see from the 8/28 version to the 9/1 version is that they removed question 2 from the 800 series. The question was "If an attorney prepares loan documents for a lender, where does that charge go?"
Thanks for helping me to be on top of this.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 09/03/09 03:00 PM
ACtually, there are more changes...additional Q&A's...for example, under Important Dates #3 has been added.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/03/09 03:20 PM
Joker: that was already in the 8/38/09 Q&A's.
I just compared the 9/1/09 Q&A's to the 8/28/09 Q&A's. The only change I can find is the removal of Q&A #6 on page 14 as ReadsRegs stated.
First question: Why did they remove this Q&A?
Second question: Why doesn't HUD announce these changes?
Third question: Why doesn't HUD tell us what they are changing/deleting/moving?
GRRRRRRR!!!!!!!!!!!!!!
I just compared the 9/1/09 Q&A's to the 8/28/09 Q&A's. The only change I can find is the removal of Q&A #6 on page 14 as ReadsRegs stated.
First question: Why did they remove this Q&A?
Second question: Why doesn't HUD announce these changes?
Third question: Why doesn't HUD tell us what they are changing/deleting/moving?
GRRRRRRR!!!!!!!!!!!!!!
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 09/03/09 03:25 PM
ummmm...David, seriously, it's not in my 8/13/09 version, but then...I don't have one dated 8/38/09 
Ah, but I see you have a 8/28 date listed...apparently this has been changed at some point that I was not aware of...geesh!
In fact, I just dug it out of the trashcan to verify I had listed the correct section and addition.
My 8/13 verison has 2 question in the Important dates section on page 6. The 9/1 version has 3 questions (#3 being new) on page 7.
as far as you last comment! for REAL! this is why I do NOT miss secondary market FHA lending...but that's not helping me with this...because it's determined to continue haunting me!
Ah, but I see you have a 8/28 date listed...apparently this has been changed at some point that I was not aware of...geesh!In fact, I just dug it out of the trashcan to verify I had listed the correct section and addition.
My 8/13 verison has 2 question in the Important dates section on page 6. The 9/1 version has 3 questions (#3 being new) on page 7.
as far as you last comment! for REAL! this is why I do NOT miss secondary market FHA lending...but that's not helping me with this...because it's determined to continue haunting me!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/03/09 03:27 PM
I emailed HUD telling them their link doesn't work (from the first announcement) and asking them to announce the changes. I also asked them to let us know what is changing. We'll see.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 09/03/09 03:28 PM
don't hold your breath! but then, you already know that!
Posted By: Kahola
Re: RESPA changes 1-1-10 - 09/03/09 04:12 PM
A broker question ---- If a broker prepares a GFE and then the bank also prepares one, because we are ultimately responsible for the accuracy of the GFE,and the bank's GFE fees are not the same as what the broker disclosed,which GFE is reflected on the HUD-1?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/03/09 07:13 PM
The lender is ultimately responsible for the GFE and HUD-1/1A. The bank needs to ensure that the ONE that is provided to the applicant is accurate. If the broker's is different, why? If your's is wrong, revise yours to be right. If the broker's is wrong, issue your own (correct) one. If neither is right, issue one that is correct.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 09/03/09 08:04 PM
Originally Posted By: David Dickinson
I emailed HUD telling them their link doesn't work (from the first announcement) and asking them to announce the changes. I also asked them to let us know what is changing. We'll see.
I just visited their web site and now the FAQs say lasted update 9/3/09 and they are now 27 pages. I haven't had the time to see what changed from the 9/1 to the 9/3 version.
http://www.hud.gov/offices/hsg/ramh/res/faqsept109final.pdf
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/03/09 08:43 PM
I got an email back from HUD thanking me for pointing out the incorrect link. It also said they would forward my comments bout the FAQ updates. We'll see if I get a response to that.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 09/03/09 08:46 PM
How many Final FAQs will there be 
Posted By: QCL
Re: RESPA changes 1-1-10 - 09/03/09 08:51 PM
BTW - I think it's hilarious that this site http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm says "Content current as of 2 August 2009"
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 09/03/09 08:55 PM
And this same gov't wants to run our health care Oops, that's comment for the cooler. 
Oops, that's comment for the cooler.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/03/09 08:58 PM
I reviewed the 9/3/09 update to the FAQ's. Here's what's new from the 8/28/09 update:
Page 4:
GFE - Seller Paid items - added #2
Page 12:
GFE - Block 5 - added #4
Page 15:
Section 4&5 - Right to cure & tolerance violations - added #9
Page 17-18
HUD-1 - General - added #9 & 10
Page 18:
HUD-1 - 200 Series - added #2
Page 20:
HUD-1 - 800 Series - added #6 (this is the one they removed from the 9/1 update. Now it's back!) I think this is an incorrect answer and believed that's why they removed it. Grrr!
Page 4:
GFE - Seller Paid items - added #2
Page 12:
GFE - Block 5 - added #4
Page 15:
Section 4&5 - Right to cure & tolerance violations - added #9
Page 17-18
HUD-1 - General - added #9 & 10
Page 18:
HUD-1 - 200 Series - added #2
Page 20:
HUD-1 - 800 Series - added #6 (this is the one they removed from the 9/1 update. Now it's back!) I think this is an incorrect answer and believed that's why they removed it. Grrr!
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 09/04/09 12:21 AM
As I have always said:
DOG spelled backward is GOD
HUD and spelled backward is DUH!
DOG spelled backward is GOD
HUD and spelled backward is DUH!
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 09/04/09 12:39 PM
Originally Posted By: DD Regs
How many Final FAQs will there be
One. The last update to be released.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 09/04/09 06:24 PM
HUD has updated the link to the RESPA FAQs. http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs.pdf
When you click this, you currently get the 27 page 9/3 version.
The link in my prior post takes you to the 9/1 version.
When you click this, you currently get the 27 page 9/3 version.
The link in my prior post takes you to the 9/1 version.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/04/09 06:40 PM
Bookmark this page:
http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm
It takes you to the pdf link to open the latest version.
BTW, when I did this (to paste the link), I see there is a NEW version (9/4) and they bolded the new Q&A's to let us know what has changed. Yeah! They listened to my email!
http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm
It takes you to the pdf link to open the latest version.
BTW, when I did this (to paste the link), I see there is a NEW version (9/4) and they bolded the new Q&A's to let us know what has changed. Yeah! They listened to my email!
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 09/04/09 06:46 PM
miracles happen! I'm impressed!
and thanks.
and thanks.
Posted By: FC
Re: RESPA changes 1-1-10 - 09/04/09 07:03 PM
Is there a new Settlement Cost Booklet that goes along with the new HUD1 and GFE?
Posted By: ahou
Re: RESPA changes 1-1-10 - 09/04/09 07:19 PM
I don't think it has been revised yet.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/04/09 07:38 PM
They are working on it, but it's not out yet (see the last Q&A in the CONSTANTLY revised FAQs).
Posted By: Will B
Re: RESPA changes 1-1-10 - 09/08/09 02:19 PM
With the new Reg X requirement to provide a GFE once we receive the six pieces of information how should lenders handle prequalifications? If your bank pulls a credit report in order to perform a prequalification you'll typically have all six pieces of information, so you'd be required to give a GFE.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/08/09 05:48 PM
Typically, a prequalification doesn't have a specific property - one of the 6 items necessary to have an application. No property = no RESPA.
If you do have all 6 items, you have an application and all RESPA requirements are triggered - including the GFE.
If you do have all 6 items, you have an application and all RESPA requirements are triggered - including the GFE.
Posted By: Amos
Re: RESPA changes 1-1-10 - 09/08/09 07:26 PM
Originally Posted By: David Dickinson
Typically, a prequalification doesn't have a specific property - one of the 6 items necessary to have an application. No property = no RESPA.
If you do have all 6 items, you have an application and all RESPA requirements are triggered - including the GFE.
If you do have all 6 items, you have an application and all RESPA requirements are triggered - including the GFE.
You don't necessarily have an application if you have all six items. The definition of application also includes "any other information deemed necessary by the loan originator."
Posted By: Amos
Re: RESPA changes 1-1-10 - 09/08/09 07:30 PM
Originally Posted By: Amos
Would this alternative statement for FHA loans replace the statement "If you pay off early you may have to pay a penalty" or would it be in addition to that disclosure?
Also, on the new GFE, even though FHA loans don't have a prepayment penalty, would you then answer "yes" to the question, "Does your loan have a prepayment penalty?" And how would you calculate the dollar amount of the maximum prepayment penalty?
Also, on the new GFE, even though FHA loans don't have a prepayment penalty, would you then answer "yes" to the question, "Does your loan have a prepayment penalty?" And how would you calculate the dollar amount of the maximum prepayment penalty?
Anybody?
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 09/08/09 07:42 PM
Quote:
You don't necessarily have an application if you have all six items. The definition of application also includes "any other information deemed necessary by the loan originator."
Outside of the six criteria listed just what other information would you require before you would consider having an application for credit subject to disclosure requirements? Keep in mind RESPA does not address a "complete" application, it only addresses that you have enough information to begin your credit process.
Posted By: Amos
Re: RESPA changes 1-1-10 - 09/08/09 08:26 PM
Originally Posted By: Dan Persfull
Quote:
You don't necessarily have an application if you have all six items. The definition of application also includes "any other information deemed necessary by the loan originator."
Outside of the six criteria listed just what other information would you require before you would consider having an application for credit subject to disclosure requirements? Keep in mind RESPA does not address a "complete" application, it only addresses that you have enough information to begin your credit process.
I based my comment on the following statement from the final rule published in the Federal Register on 11/11/08 on page 68211:
“…at the time of application, the loan originator will decide what application information it needs to collect from a borrower, and which of that collected application information it will use, in order to issue a meaningful GFE. However, before providing the GFE, the loan originator will be assumed to have collected at least the following six items of information: the borrower’s name, Social Security Number, and gross monthly income; the property address; an estimate of the value of the property; and the amount of the mortgage loan sought. The borrower’s Social Security Number would be collected for purposes of obtaining a credit report. The final rule now defines ‘‘application’’ to include at least these six items of information. Therefore, under this single application process, a loan originator may ask for, or a borrower may choose to submit, more information than the loan originator intends to use to process the GFE, for example the information on a standard 1003 mortgage loan application form, but beyond the six items of information, the loan originator will determine what it needs to issue a GFE.”
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/08/09 09:38 PM
This is true Amos, but it must be applied consistently and can't include any verification info. So back to Dan's question: what info do you need?
Posted By: Amos
Re: RESPA changes 1-1-10 - 09/09/09 12:42 PM
For starters, information such as loan purpose, product type and type of property would be helpful in preparing a GFE. I don't want to change our process. I want to collect all of the information for the 1003, so if, after providing the GFE, an applicant elects to continue their application, I'm all set. I understand I will need to set a policy that outlines what information out of all that I collect will be used to generate GFEs.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 09/09/09 12:50 PM
Because that is the regulatory requirement: "but beyond the six items of information, the loan originator will determine what it needs to issue a GFE.” HUD drew a bright line in the sand. If you determine that you need specific additional information, then you are going to "need" it from each and every applicant prior to proceeding or you may venture into a fair lending issue.
Posted By: Amos
Re: RESPA changes 1-1-10 - 09/09/09 12:55 PM
Agreed.
My issue is with a previous post that said once you have collected the six items that you have an application for GFE purposes.
My issue is with a previous post that said once you have collected the six items that you have an application for GFE purposes.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/09/09 01:55 PM
Originally Posted By: Amos
For starters, information such as loan purpose, product type and type of property would be helpful in preparing a GFE. I don't want to change our process. I want to collect all of the information for the 1003, so if, after providing the GFE, an applicant elects to continue their application, I'm all set. I understand I will need to set a policy that outlines what information out of all that I collect will be used to generate GFEs.
I don't disagree with these items. I think it is OK to ask for a completed 1003 but you must ask for it EVERY TIME. If you're going to say you must have a 1003 completed, then make sure LO's aren't EVER taking an oral application or starting the application process without one.
Posted By: AuditorK
Re: RESPA changes 1-1-10 - 09/09/09 06:24 PM
Am I correct that if we allow the borrower to choose the attorney that they would like to handle the loan closing, we must provide the borrower with a written list of settlement service providers (attorneys in this case) at the time of the GFE? This is the only settlement service that our bank doesn't require a specific provider.
Also, am I correct that this would go in Block 4, not Block 6 on the GFE "Your Charges for All Other Settlement Services"?
Also, am I correct that this would go in Block 4, not Block 6 on the GFE "Your Charges for All Other Settlement Services"?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/09/09 08:39 PM
Yes. Anytime you allow the borrower to shop for a servicer provider, you must provide them with a list of "recommended providers".
You are correct, loan closing fees go in block 4.
Jerod Moyer & I will be conducting a webinar on the new (and constantly changing!) RESPA FAQs on 9/24 for BOL. You can find more info here:
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1250610623605
You are correct, loan closing fees go in block 4.
Jerod Moyer & I will be conducting a webinar on the new (and constantly changing!) RESPA FAQs on 9/24 for BOL. You can find more info here:
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1250610623605
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 09/09/09 09:54 PM
Just clarifying.......Isn't it still permissible not to provide a list of "recommended providers" and let the borrower determine for themselves which attorney (in the example above) they want to deal with?
Thanks
Thanks
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/09/09 10:33 PM
Beginning 1/1/10, if you allow the applicant to shop for their own provider, you MUST give them a list.
Posted By: Will B
Re: RESPA changes 1-1-10 - 09/09/09 10:48 PM
Originally Posted By: rlcarey
Because that is the regulatory requirement: "but beyond the six items of information, the loan originator will determine what it needs to issue a GFE.” HUD drew a bright line in the sand. If you determine that you need specific additional information, then you are going to "need" it from each and every applicant prior to proceeding or you may venture into a fair lending issue.
Given that it's nearly impossible to guarantee that a few hundred mortgage loan originators will collect the same information on every single consumer, are you recommending that we just collect the six items, issue a GFE, then collect the rest of the 1003 information once the consumer receives the GFE and agrees to go forward with the application?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/09/09 10:54 PM
You don't have a choice really. Once you have the 6 items, RESPA says you have an application. Like I said above "I think it is OK to ask for a completed 1003 but you must ask for it EVERY TIME. If you're going to say you must have a 1003 completed, then make sure LO's aren't EVER taking an oral application or starting the application process without one."
What else do you need to issue a meaningful GFE?
What else do you need to issue a meaningful GFE?
Posted By: Will B
Re: RESPA changes 1-1-10 - 09/09/09 10:58 PM
Originally Posted By: David Dickinson
Typically, a prequalification doesn't have a specific property - one of the 6 items necessary to have an application. No property = no RESPA.
If you do have all 6 items, you have an application and all RESPA requirements are triggered - including the GFE.
If you do have all 6 items, you have an application and all RESPA requirements are triggered - including the GFE.
I agree that we typically wouldn't collect the property address for a prequalification, but if the prequalification is for a refinance we'll know the property because it's the same as their current address. We currently pull a credit report when we do a prequalification. But under the new RESPA rule there doesn't seem to be a way to do it without collecting the six items, so we'd have to provide a GFE unless we stop pulling a credit report. Does anyone have a different conclusion?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/09/09 11:05 PM
I don't think you can simply avoid pulling a credit report and say "I don't have an application". If you read the section by section analysis of the RESPA rules, it clearly states they want GFE's out early so people can shop. Avoidance on your part is not the solution.
Posted By: Will B
Re: RESPA changes 1-1-10 - 09/09/09 11:11 PM
I'm not trying to avoid a GFE for a regular application, but I'm concerned that we'd be generating a GFE for every prequalification. I think that would trigger an initial TIL too.
Posted By: Will B
Re: RESPA changes 1-1-10 - 09/09/09 11:18 PM
Originally Posted By: David Dickinson
You don't have a choice really. Once you have the 6 items, RESPA says you have an application. Like I said above "I think it is OK to ask for a completed 1003 but you must ask for it EVERY TIME. If you're going to say you must have a 1003 completed, then make sure LO's aren't EVER taking an oral application or starting the application process without one."
What else do you need to issue a meaningful GFE?
What else do you need to issue a meaningful GFE?
What else do you need to issue a meaningful GFE? [/quote]
I think it's reasonable to add product type as the seventh item. (3/1 ARM, 30 Fixed, Fixed Rate FHA, etc.) Since that same definition is going to drive the requirement to give an initial TIL you'd need to know the product type so your TIL will be accurate. Even if we don't need anything more than the 6 or 7 items to generate an accurate GFE, I'm not sure why we shouldn't collect more 1003 information at that time. Most banks probably have variations in the degree of completeness of 1003 information from one customer to the next. I don't understand why anything changes around that point based on the new RESPA rule.
Posted By: Amos
Re: RESPA changes 1-1-10 - 09/10/09 12:51 PM
Originally Posted By: David Dickinson
You don't have a choice really. Once you have the 6 items, RESPA says you have an application. Like I said above "I think it is OK to ask for a completed 1003 but you must ask for it EVERY TIME. If you're going to say you must have a 1003 completed, then make sure LO's aren't EVER taking an oral application or starting the application process without one."
What else do you need to issue a meaningful GFE?
What else do you need to issue a meaningful GFE?
I am having a hard time understanding why you have an application once you have the six items. The definition of application in Regulation X doesn't say that. The final rule does say "Once the applicant submits to the loan originator all the mortgage application information deemed necessary by the loan originator to process the GFE, the originator will be required to deliver or mail a GFE to the applicant within 3 business days."
This to me says if the lender determines additional information is needed to produce the GFE, such as loan purpose, product, property type and occupancy, then if the applicant only gives me the six items, I don't have an application.
Can you point me to somewhere in the final rule that would help me understand why you have an application if you have the six items?
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 09/10/09 01:21 PM
What you are missing Amos is if you designate that you need 8 items (which the Reg allows you to do) then you better collect 8 items every single time and you have better have these 8 items identified and documented in your application policy/procedures. If you do not have them identified then auditors and examiners are going consider you having an application when the 6 items are identified, and your verbal confirmation that it's your "policy" is to require 8 items will not fly. And you have better hope none of your loan officers issues the GFE with only 7 of the 8 items you name in your policy/procedure.
Will B...if I understand your earlier post you currently do pre-qualification requests for refinancings. That's fine for customer service, but under RESPA (currently) you have an identified property therefore the "pre-qualification" request is subject to the disclosure requirements for RESPA.
Will B...if I understand your earlier post you currently do pre-qualification requests for refinancings. That's fine for customer service, but under RESPA (currently) you have an identified property therefore the "pre-qualification" request is subject to the disclosure requirements for RESPA.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 09/10/09 01:28 PM
I agree Dan. I want to put my spin on this. I believe what you are referencing is the diligence requirement in the commentary to Reg. B. It basically says, if you have an applicant come into apply...YOU (Lender) need to obtain everything required to process the application. Not just expect them to provide everything and if they dont you get away without having an application.
For example, would you pull credit on this? If the answer is yes, then I find it very difficult to argue that you do not have an application.
For example, would you pull credit on this? If the answer is yes, then I find it very difficult to argue that you do not have an application.
Posted By: Amos
Re: RESPA changes 1-1-10 - 09/10/09 03:04 PM
Originally Posted By: David Dickinson
You don't have a choice really. Once you have the 6 items, RESPA says you have an application. Like I said above "I think it is OK to ask for a completed 1003 but you must ask for it EVERY TIME. If you're going to say you must have a 1003 completed, then make sure LO's aren't EVER taking an oral application or starting the application process without one."
What else do you need to issue a meaningful GFE?
What else do you need to issue a meaningful GFE?
Let me ask this another way. How can you provide a meaningful GFE if you only have the six items? How do you know what rate (fixed vs. ARM) and points to quote? How do you determine the cost of title insurance (purchase vs. refi vs. additional endorsements based on product and property occupancy)? How do you determine the appraisal charge (single family vs. four family)? How do you determine addtional secondary market fees that may be assessed?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/10/09 03:17 PM
I agree. You need the 6 items. I don't think anyone is arguing with that. We're just simply stating you must apply this consistently.
If I came in and said "I would like to refinance my house" the LO is going to ask me about programs, fixed vs. variable, etc. If the LO also collects the other 5 things, you have an application.
If I came in and said "I would like to refinance my house" the LO is going to ask me about programs, fixed vs. variable, etc. If the LO also collects the other 5 things, you have an application.
Posted By: Retired DQ
Re: RESPA changes 1-1-10 - 09/10/09 05:54 PM
Quote:
‘‘Your Charges for All Other Settlement Services’’
There is a 10 percent tolerance applied to the sum of the prices of each service listed in Block 3, Block 4, Block 5, Block 6, and Block 7, where the loan originator requires the use of a particular provider or the borrower uses a provider selected or
identified by the loan originator. Any services in Block 4, Block 5, or Block 6 for which the borrower selects a provider other than one identified by the loan originator are not subject to any tolerance and, at settlement, would not be included in the sum of the charges on which the 10 percent tolerance is based. Where a loan originator permits a borrower to shop for third party settlement services, the loan originator must provide the borrower with a written list of settlement services providers at the time of the GFE, on a separate sheet of paper.
There is a 10 percent tolerance applied to the sum of the prices of each service listed in Block 3, Block 4, Block 5, Block 6, and Block 7, where the loan originator requires the use of a particular provider or the borrower uses a provider selected or
identified by the loan originator. Any services in Block 4, Block 5, or Block 6 for which the borrower selects a provider other than one identified by the loan originator are not subject to any tolerance and, at settlement, would not be included in the sum of the charges on which the 10 percent tolerance is based. Where a loan originator permits a borrower to shop for third party settlement services, the loan originator must provide the borrower with a written list of settlement services providers at the time of the GFE, on a separate sheet of paper.
Any suggestions on how to create such a list? Use a phone book? I mean really, how are we supposed to know?
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 09/10/09 06:09 PM
I plan on simply providing them a list of our "approved" providers. If they shop outside that list I have no control over that.
Posted By: Retired DQ
Re: RESPA changes 1-1-10 - 09/10/09 06:24 PM
Thanks Dan.
Posted By: ktac MITCH
Re: RESPA changes 1-1-10 - 09/10/09 07:21 PM
Originally Posted By: Dan Persfull
I plan on simply providing them a list of our "approved" providers. If they shop outside that list I have no control over that.
Also, your bank can have a benefit by keeping the list short.
If they select someone on your list the 10% Tolerance applies
If they select someone not on your list - Then it falls outside any tolerance requirement, because they shopped and they chose so "its all on them"
So don't try to list every Title Company in the phone book, just list 3.
Posted By: Retired DQ
Re: RESPA changes 1-1-10 - 09/11/09 11:15 AM
Thanks, I just think the whole idea is idiotic... 
Posted By: Amos
Re: RESPA changes 1-1-10 - 09/11/09 04:18 PM
I am looking for some clarification on how to handle the cost of the owner’s title insurance policy on the new GFE in those cases where the seller typically pays for the owner’s title policy, such as in Wisconsin.
Question #2 in the section of the HUD FAQs labeled “GFE – Seller paid items” reads, “Are charges to the seller listed on the GFE?” HUD’s answer is, “RESPA requires that only the borrower receive a GFE. The GFE is defined as an estimate of settlement charges a borrower is likely to incur in connection with the settlement. Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—do not have to be included on the GFE. If the borrower typically would incur charges for title services and lender's and owner's title insurance, the GFE instructions make it clear that those charges are required to be listed regardless of whether, for example, the contract requires the seller to pay for the service. If there is a question about whether the borrower or seller is to pay for a particular settlement service, the charge for that service should be disclosed on the GFE.”
Question #5 in the section labeled “GFE – Block 5” reads: “If a seller typically pays for the Block 5, ―Owner‘s title insurance, does the charge still have to be shown on the GFE?” HUD’s answer is, “Yes, an estimate of the cost must be shown in Block 5, ―Owner‘s title insurance for all purchase transactions regardless of who is selecting or paying for it.”
These two Q&As seem to be contradictory. Thoughts anyone?
Question #2 in the section of the HUD FAQs labeled “GFE – Seller paid items” reads, “Are charges to the seller listed on the GFE?” HUD’s answer is, “RESPA requires that only the borrower receive a GFE. The GFE is defined as an estimate of settlement charges a borrower is likely to incur in connection with the settlement. Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—do not have to be included on the GFE. If the borrower typically would incur charges for title services and lender's and owner's title insurance, the GFE instructions make it clear that those charges are required to be listed regardless of whether, for example, the contract requires the seller to pay for the service. If there is a question about whether the borrower or seller is to pay for a particular settlement service, the charge for that service should be disclosed on the GFE.”
Question #5 in the section labeled “GFE – Block 5” reads: “If a seller typically pays for the Block 5, ―Owner‘s title insurance, does the charge still have to be shown on the GFE?” HUD’s answer is, “Yes, an estimate of the cost must be shown in Block 5, ―Owner‘s title insurance for all purchase transactions regardless of who is selecting or paying for it.”
These two Q&As seem to be contradictory. Thoughts anyone?
Posted By: Deena
Re: RESPA changes 1-1-10 - 09/11/09 05:09 PM
I have a question regarding the average charge. HUD's Q&A says that some states prohibit the use of an average charge. Does anyone know where I would look to see if PA allows the use of an average charge? I was going to post this in the PA forum, but I don't think it gets much traffic and I thought I might have better luck (hopefully) here.
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 09/11/09 10:12 PM
Looks like HUD is still fine tuning their FAQ. There is a new one dated 9/9/09
http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs.pdf
I could not find where anyone else had posted this so I thought I would do so.
Enjoy the aggrevation!
http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs.pdf
I could not find where anyone else had posted this so I thought I would do so.
Enjoy the aggrevation!
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 09/11/09 11:28 PM
OK, now I'm really confused. We were told that if you provide your borrower with a list of recommended providers, it was the same as the lender selecting the provider and therefore is subject to the 10% tolerance rule (if we select them or you use companies we identify). We are specifically questioning the Title Companies on the list.
My confusion/question is, if we must give them a list, then we have identified them, therefore they are subject to the tolerance?
The current document that we give applicants states:
ABC Bank has repeatedly used the services of any of the following providers within the last twelve months. The charges on the Good Faith Estimate are based upon the corresponding charges of the providers listed below.
Can we continue to provide the applicant with this list for them to choose from and not be subject to the 10% rule?
My confusion/question is, if we must give them a list, then we have identified them, therefore they are subject to the tolerance?
The current document that we give applicants states:
ABC Bank has repeatedly used the services of any of the following providers within the last twelve months. The charges on the Good Faith Estimate are based upon the corresponding charges of the providers listed below.
Can we continue to provide the applicant with this list for them to choose from and not be subject to the 10% rule?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/14/09 03:09 PM
Old School is right. There are 14 new Q&A's. At least they are putting the new Q&A's in bold print.
Posted By: ComplyFunatic
Re: RESPA changes 1-1-10 - 09/15/09 12:32 AM
Two questions came up today in discussing the new GFE:
1. With the new changes, how do you test the APR when the charges are not broken down on the GFE? Our system does not produce an itemization of amount financed.
2. LOs at my Bank are having trouble with the New GFE not stating total cash to close and not providing a breakdown of total payment including escrows. Is it acceptable to provide that info in a cover letter with the GFE?
1. With the new changes, how do you test the APR when the charges are not broken down on the GFE? Our system does not produce an itemization of amount financed.
2. LOs at my Bank are having trouble with the New GFE not stating total cash to close and not providing a breakdown of total payment including escrows. Is it acceptable to provide that info in a cover letter with the GFE?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/15/09 01:38 AM
1. Don't mix TIL and RESPA. The APR should be tested by a list of finance charges - not found on the GFE. Even today's GFE and HUD-1/1A don't list FC's.
2. I agree. The new GFE doesn't tell the borrower what to bring to closing since nothing is listed POC. I see most bankers providing some type of extra info to tell the borrower what they'll need at closing. Gee, thanks HUD.
2. I agree. The new GFE doesn't tell the borrower what to bring to closing since nothing is listed POC. I see most bankers providing some type of extra info to tell the borrower what they'll need at closing. Gee, thanks HUD.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 09/15/09 02:20 AM
"Even today's GFE and HUD-1/1A don't list FC's."
How do you not list a pre-paid finance charge on the GFE or HUD-1/1A?
How do you not list a pre-paid finance charge on the GFE or HUD-1/1A?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/15/09 02:25 AM
Let me try again: They are listed, but not identified as finance charges. For instance, a documentation fee could be a finance charge or could not be - depending on how the bank treats it. Flood insurance determinations might be a FC, might not. Depends on if it includes LofL coverage.
My point is don't look to the GFE & Settlement Statement to identify FC's. That's not the point of RESPA.
My point is don't look to the GFE & Settlement Statement to identify FC's. That's not the point of RESPA.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 09/15/09 03:11 AM
I think that what ComplyFunatic was driving at was that when auditing, they (as do I) most likely rely on the GFE and the HUD-1/1A to identify the charges associated with the loan in order to determine whether or not the charges are FCs to compute the APR. With fees and charges lumped together, I can understand the question. The bank is going to have to maintain the breakdown of these lump sum charges some where separately in order to show what the bank is estimating that they consist of to determine the accuracy of the ETIL.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 09/15/09 02:02 PM
Quote:
Can we continue to provide the applicant with this list for them to choose from and not be subject to the 10% rule?
If they choose a provider on the list then you are subject to the tolerance. If they choose a provider not on the list (which they can do if you give them the option to choose the provider) then you are not subject to the tolerance.
Posted By: ComplyFunatic
Re: RESPA changes 1-1-10 - 09/15/09 02:07 PM
Yep - that is what I meant, rlclarey. I am not mixing RESPA with REG Z, I think this is all part of the GFE discussion as we are, not only from an audit standpoint, but also from the procedural standpoint of the person putting the numbers in the system to calculate the initial TIL. They are used to looking at the numbers off of the GFE and plugging them in the system to generate the TIL. So how are y'all going to document the breakdown of these lump sum charges? My LOs are asking me if they can just keep the old GFE form which breaks down the fees and give the customer the old one AND the new one. :-0
Posted By: CHR
Re: RESPA changes 1-1-10 - 09/15/09 04:49 PM
Under one of the criteria for a complete application is an estimate of value of the property. What exactly does everyone thinks constitutes as an estimate? Buy-Sell or Camas report?
Posted By: avigal
Re: RESPA changes 1-1-10 - 09/16/09 07:11 PM
for home equity products, if the interest rate is never technically locked in, if changed circumstances would change interest rate or term of the loan would a revised gfe have to be issued. My fear is that if we do not offer a revised gfe then it could look like misleading.
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 09/17/09 11:09 AM
I am not an expert GURU but will provide my opinion and how we are handling this.
We are not reading too much into this statement and interpret it to mean the purchase price or the borrower's estimated value. We are NOT planning to do any pre-disclosure valuations such as an AVM.
Regards
We are not reading too much into this statement and interpret it to mean the purchase price or the borrower's estimated value. We are NOT planning to do any pre-disclosure valuations such as an AVM.
Regards
Posted By: Busy body
Re: RESPA changes 1-1-10 - 09/19/09 02:15 PM
I would appreciate opinions concerning one of the FAQs that appears to apply to providing a GFE for a prequal. Question: Are the following sufficient to establish “changed circumstances” consistent with 24 CFR 3500.7(f) – If a GFE is issued without a property address, the later identification of a property address. Answer: “If a loan originator issues a GFE without a property address, the subsequent identification of the property address is not considered a changed circumstance.” Does this mean that we are held to the original GFE unless there are other changed circumstances? Or can it be stretched to mean that since we didn't have an application in the first place, changed circumstance does not apply. We issue GFEs for prequals and the lenders here are not ready to give it up. Thanks!
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 09/21/09 09:16 PM
HUD has posted updated RESPA FAQs with a date of 9/18. They are now 43 pages and include a table of contents. Also, HUD has changed the look of its home page.
Posted By: Sage
Re: RESPA changes 1-1-10 - 09/22/09 01:26 PM
If you charge for the flood determination does that get listed as a Origination Fee on the new GFE?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/22/09 02:37 PM
Originally Posted By: Busy body
Does this mean that we are held to the original GFE unless there are other changed circumstances? Or can it be stretched to mean that since we didn't have an application in the first place, changed circumstance does not apply. We issue GFEs for prequals and the lenders here are not ready to give it up. Thanks!
If you issue a GFE, you are bound by it. If there is a changed circumstance, you can change the fees ONLY affected by the change.
I think your lenders will want to stop issuing GFE's on prequals. They could issue another type of info sheet, but if they issue a GFE, they are "stuck" with it.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/22/09 02:41 PM
Originally Posted By: Sage
If you charge for the flood determination does that get listed as a Origination Fee on the new GFE?
This would be listed in B3 - Services that we select, if you order the SFHDF (most likely). If you allow the borrower to shop for the SFHDF (unlikely), it goes in B6.
I'll be conducting a Webinar for BOL covering the new FAQs on Thursday. You can find more info here:
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1250610623605
I'm also conducting a webinar on how to fill out the new GFE and HUD-1/1A on November 10th. More info can be found here:
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1253206816535
Posted By: Frank
Re: RESPA changes 1-1-10 - 09/22/09 06:25 PM
How will credit life on a note be disclosed once changes come into effect?
The GFE has no place for it. It states in the HUD FAQ(under "Summary of your loan" Q3 that you don't even consider it in the balance)
What about on the HUD statement?
We currently disclose the cost of it on both and it becomes part of the loan balance.
The GFE has no place for it. It states in the HUD FAQ(under "Summary of your loan" Q3 that you don't even consider it in the balance)
What about on the HUD statement?
We currently disclose the cost of it on both and it becomes part of the loan balance.
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 09/22/09 10:47 PM
Sage
Flood certs are part of Block 3 on the GFE. This is confirmed on the FAQ 9/09 page 16. It is not part of the Origination Charge. Be sure your LOS can still code it as an APR item however. Just because it is not part of the Origination Charge does not exempt it from APR (if it is Life of Loan).
Flood certs are part of Block 3 on the GFE. This is confirmed on the FAQ 9/09 page 16. It is not part of the Origination Charge. Be sure your LOS can still code it as an APR item however. Just because it is not part of the Origination Charge does not exempt it from APR (if it is Life of Loan).
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 09/23/09 01:59 AM
I too find these two items very contradictory. I hope someone answers your post.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 09/23/09 02:06 AM
Originally Posted By: Amos
I am looking for some clarification on how to handle the cost of the owner’s title insurance policy on the new GFE in those cases where the seller typically pays for the owner’s title policy, such as in Wisconsin.
Question #2 in the section of the HUD FAQs labeled “GFE – Seller paid items” reads, “Are charges to the seller listed on the GFE?” HUD’s answer is, “RESPA requires that only the borrower receive a GFE. The GFE is defined as an estimate of settlement charges a borrower is likely to incur in connection with the settlement. Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—do not have to be included on the GFE. If the borrower typically would incur charges for title services and lender's and owner's title insurance, the GFE instructions make it clear that those charges are required to be listed regardless of whether, for example, the contract requires the seller to pay for the service. If there is a question about whether the borrower or seller is to pay for a particular settlement service, the charge for that service should be disclosed on the GFE.”
Question #5 in the section labeled “GFE – Block 5” reads: “If a seller typically pays for the Block 5, ―Owner‘s title insurance, does the charge still have to be shown on the GFE?” HUD’s answer is, “Yes, an estimate of the cost must be shown in Block 5, ―Owner‘s title insurance for all purchase transactions regardless of who is selecting or paying for it.”
These two Q&As seem to be contradictory. Thoughts anyone?
Question #2 in the section of the HUD FAQs labeled “GFE – Seller paid items” reads, “Are charges to the seller listed on the GFE?” HUD’s answer is, “RESPA requires that only the borrower receive a GFE. The GFE is defined as an estimate of settlement charges a borrower is likely to incur in connection with the settlement. Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—do not have to be included on the GFE. If the borrower typically would incur charges for title services and lender's and owner's title insurance, the GFE instructions make it clear that those charges are required to be listed regardless of whether, for example, the contract requires the seller to pay for the service. If there is a question about whether the borrower or seller is to pay for a particular settlement service, the charge for that service should be disclosed on the GFE.”
Question #5 in the section labeled “GFE – Block 5” reads: “If a seller typically pays for the Block 5, ―Owner‘s title insurance, does the charge still have to be shown on the GFE?” HUD’s answer is, “Yes, an estimate of the cost must be shown in Block 5, ―Owner‘s title insurance for all purchase transactions regardless of who is selecting or paying for it.”
These two Q&As seem to be contradictory. Thoughts anyone?
Sorry - I forgot to quote the post. Does anyone have any thoughts on how to interpret these two statements?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/23/09 03:03 AM
I agree these appear to be contradictory. I've been studying these FAQs for the last several weeks and can't come to a conclusion where these two makes sense. There are several Q&As that indicate the GFE should only provide what is "typical", but then #5 says we still have to list the the title insurance, no matter if the seller pays for it.
Hopefully, we'll get more clarification from HUD.
Hopefully, we'll get more clarification from HUD.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 09/23/09 03:50 AM
How about some clarification on the GFE - Written list of providers. Page 10 and 11 of new FAQ.
1) Q: When do loan originators have to provide the borrower with a written list of identified providers?
A: When a loan originator permits a borrower to shop for third-party settlement services, the loan originator must provide the borrower with a written list of settlement services providers at the time of the GFE, on a separate sheet of paper.
7) Q: Must the loan originator provide names only of those settlement service providers known to do business in the locality of the mortgage property or may the loan originator provide a list of national settlement service providers who may or may not do business in the locality of the mortgaged property?
A: The requirements for the new GFE form provide that ―[w]here the loan originator permits a borrower to shop for third party settlement services, the loan originator must provide the borrower with a written list of settlement services providers.‖ The list should contain settlement service providers that are likely available to provide the settlement service for the borrower.
According to #7, last sentence, we are required to provide a list of providers that are likely available to provide the settlement service for the borrower. However, I have not been able to find out how many providers we are required to list on our "written list". Is it permissible to only list our title company affiliate as a title provider? If the borrower doesn't want to use our title company, do we just tell them to research companies themselves and that they are required to contact us with a company name within three business days since we are required to provide them with a properly disclosed GFE within three days? What about surveyors, we only have three in our area.
I also can not find anywhere where the borrower is allowed to change their mind. Such as we give them the written list, they say “I don’t know just use them” (pointing to a name on the list) then they go home, talk it over with their spouse and they decide they don’t want to use someone on our list. Can the borrower give us a letter stating they changed their mind and they want to choose their own provider? Would this be considered a “changed circumstance”? If not how does this requirement protect the borrower? Or do we tell them to withdraw their loan application and reapply for another loan so we can disclose to them some estimated charges for the company they have chosen (which we'll have to estimate since there are hundreds of title companies out there and we can not possibly know the charges for all of them). And btw since you're choosing the provider, you'll be SOL if they charge you more at the closing than we estimated on the GFE (some companies charge fees for items such as copy fees, fax fees, email fees, whereas other companies may not have these charges).
I hope I am not the only one that is confused on this topic.
1) Q: When do loan originators have to provide the borrower with a written list of identified providers?
A: When a loan originator permits a borrower to shop for third-party settlement services, the loan originator must provide the borrower with a written list of settlement services providers at the time of the GFE, on a separate sheet of paper.
7) Q: Must the loan originator provide names only of those settlement service providers known to do business in the locality of the mortgage property or may the loan originator provide a list of national settlement service providers who may or may not do business in the locality of the mortgaged property?
A: The requirements for the new GFE form provide that ―[w]here the loan originator permits a borrower to shop for third party settlement services, the loan originator must provide the borrower with a written list of settlement services providers.‖ The list should contain settlement service providers that are likely available to provide the settlement service for the borrower.
According to #7, last sentence, we are required to provide a list of providers that are likely available to provide the settlement service for the borrower. However, I have not been able to find out how many providers we are required to list on our "written list". Is it permissible to only list our title company affiliate as a title provider? If the borrower doesn't want to use our title company, do we just tell them to research companies themselves and that they are required to contact us with a company name within three business days since we are required to provide them with a properly disclosed GFE within three days? What about surveyors, we only have three in our area.
I also can not find anywhere where the borrower is allowed to change their mind. Such as we give them the written list, they say “I don’t know just use them” (pointing to a name on the list) then they go home, talk it over with their spouse and they decide they don’t want to use someone on our list. Can the borrower give us a letter stating they changed their mind and they want to choose their own provider? Would this be considered a “changed circumstance”? If not how does this requirement protect the borrower? Or do we tell them to withdraw their loan application and reapply for another loan so we can disclose to them some estimated charges for the company they have chosen (which we'll have to estimate since there are hundreds of title companies out there and we can not possibly know the charges for all of them). And btw since you're choosing the provider, you'll be SOL if they charge you more at the closing than we estimated on the GFE (some companies charge fees for items such as copy fees, fax fees, email fees, whereas other companies may not have these charges).
I hope I am not the only one that is confused on this topic.
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 09/23/09 11:59 AM
Regarding the list of providers, is this list designed to include pest control firms, surveyors and homeowners insurance? If so, it really complicates the situation for national lenders who lend in all 50 states. We are a national lender and are struggling at the thought of having to list local providers in any locale. We have title and appraisals covered but I cannot imagine having to find local surveyors.
Posted By: M Cockrell
Re: RESPA changes 1-1-10 - 09/23/09 12:14 PM
Originally Posted By: David Dickinson
Hopefully, we'll get more clarification from HUD.
Waiter, I'll have what he's having!
Posted By: avigal
Re: RESPA changes 1-1-10 - 09/23/09 01:56 PM
Appendix C in the new rule says that title services are excluded from the list of service providers you need to supply for block 6. The faqs say that all costs associated with the closing agent are title services, and should be included in block 4. I am interpreting this to mean that even if we allow a borrower to select a title company/closing attorney, we would not have to provide a list of title company/closing attorneys. Do you agree?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/23/09 02:17 PM
Originally Posted By: jlroberts
According to #7, last sentence, we are required to provide a list of providers that are likely available to provide the settlement service for the borrower. However, I have not been able to find out how many providers we are required to list on our "written list". Is it permissible to only list our title company affiliate as a title provider? If the borrower doesn't want to use our title company, do we just tell them to research companies themselves and that they are required to contact us with a company name within three business days since we are required to provide them with a properly disclosed GFE within three days? What about surveyors, we only have three in our area.
There is no further guidance on the "recommended providers", other then what we have in these Q&As. In fact, it really isn't brought out in the regulation itself. It's a one sentence instruction in Appendix C: "Where a loan originator permits a borrower to shop for third party settlement services, the loan originator must provide the borrower with a written list of settlement service providers at the time of the GFE, on a separate sheet of paper." That's all we get.
There's no guidance on how many providers, their address/phone #, etc. The FAQs do clarify these are referrals. Also remember the affiliated business arrangement rules. They are still in effect.
Quote:
I also can not find anywhere where the borrower is allowed to change their mind. Such as we give them the written list, they say “I don’t know just use them” (pointing to a name on the list) then they go home, talk it over with their spouse and they decide they don’t want to use someone on our list. Can the borrower give us a letter stating they changed their mind and they want to choose their own provider? Would this be considered a “changed circumstance”? If not how does this requirement protect the borrower? Or do we tell them to withdraw their loan application and reapply for another loan so we can disclose to them some estimated charges for the company they have chosen (which we'll have to estimate since there are hundreds of title companies out there and we can not possibly know the charges for all of them). And btw since you're choosing the provider, you'll be SOL if they charge you more at the closing than we estimated on the GFE (some companies charge fees for items such as copy fees, fax fees, email fees, whereas other companies may not have these charges).
If you give the borrower the right to choose their own provider, you MUST give them a list. They can choose someone from this list or choose another provider. If they choose someone from your list, the fee is limited to the 10% tolerance. If they choose someone not on your list, their is an unlimited tolerance. Some of our clients are thinking they'll just lock this down and not allow applicants to choose. That way they know who is being used and they'll live with the 10% tolerance. Some clients are thinking they would rather have the applicant choose anyone they want so they can get the unlimited tolerance. However, the lender MUST give a list of recommended providers in this case.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/23/09 02:27 PM
Originally Posted By: OldSchoolBanker
Regarding the list of providers, is this list designed to include pest control firms, surveyors and homeowners insurance? If so, it really complicates the situation for national lenders who lend in all 50 states. We are a national lender and are struggling at the thought of having to list local providers in any locale. We have title and appraisals covered but I cannot imagine having to find local surveyors.
If you give them the right to shop, you must give them a list of providers. This does not include insurance. It only pertains to Block 3-6 items. Refer to Appendix C - "Your Charges for All Other Settlement Services".
Posted By: Amos
Re: RESPA changes 1-1-10 - 09/24/09 06:23 PM
FYI: I emailed HUD with the following:
The first edition of the New RESPA Rule FAQs dated August 13, 2009, included the following FAQ in the GFE – General section:
13) Q: Does a prepayment penalty include the requirement of paying interest on a monthly basis on an FHA loan?
A: No. FHA loans accrue interest on a monthly basis. The payment by a borrower of accrued interest upon payoff of an FHA loan is not a prepayment penalty.
This FAQ was then omitted from subsequent versions of the New RESPA Rule FAQs, without any explanation from HUD for the deletion.
We are not sure how to interpret this action. We would appreciate a new FAQ which would explain how lenders are to fill in the prepayment penalty section on the new GFE for an FHA loan. There is some confusion, as the FHA program guidelines state there is no prepayment penalty, while the requirement to pay interest for the entire month when a loan is paid in full on any date other than the 1st of the month may be considered a prepayment penalty under Regulation Z.
Here is HUD's response:
Thank you for contacting the Office of RESPA. RESPA has no jurisdiction over prepayment penalties. Prepayment penalties are covered by the Truth In Lending Act (TILA). Please contact the Federal Reserve at (202) 452-3693 or www.federalreserve.gov. I am sorry for the confusion.
The first edition of the New RESPA Rule FAQs dated August 13, 2009, included the following FAQ in the GFE – General section:
13) Q: Does a prepayment penalty include the requirement of paying interest on a monthly basis on an FHA loan?
A: No. FHA loans accrue interest on a monthly basis. The payment by a borrower of accrued interest upon payoff of an FHA loan is not a prepayment penalty.
This FAQ was then omitted from subsequent versions of the New RESPA Rule FAQs, without any explanation from HUD for the deletion.
We are not sure how to interpret this action. We would appreciate a new FAQ which would explain how lenders are to fill in the prepayment penalty section on the new GFE for an FHA loan. There is some confusion, as the FHA program guidelines state there is no prepayment penalty, while the requirement to pay interest for the entire month when a loan is paid in full on any date other than the 1st of the month may be considered a prepayment penalty under Regulation Z.
Here is HUD's response:
Thank you for contacting the Office of RESPA. RESPA has no jurisdiction over prepayment penalties. Prepayment penalties are covered by the Truth In Lending Act (TILA). Please contact the Federal Reserve at (202) 452-3693 or www.federalreserve.gov. I am sorry for the confusion.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 09/24/09 07:51 PM
That is their way of back peddling as they screwed up with the original Q&A and they have no idea on how to now instruct the lenders.
Posted By: Amos
Re: RESPA changes 1-1-10 - 09/28/09 05:33 PM
I am wondering where on the new GFE to show the $6.50 fee assessed on closed loans by the Georgia Department of Banking and Finance under the Georgia Residential Mortgage Act. After reading the instructions for completing the new GFE, it seems like it should go in Block 8, Transfer Taxes. Do you agree?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 09/28/09 06:01 PM
I'd post this in the Georgia forum. I'm from WI so I wouldn't even hazzard a guess. sorry.
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 09/29/09 06:33 PM
Is there a public email address for sending question to HUD relating to RESPA?
Thanks
Thanks
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 09/29/09 06:46 PM
Originally Posted By: OldSchoolBanker
Is there a public email address for sending question to HUD relating to RESPA?
Thanks
Thanks
Visit the following page on HUD's web site and click the link for comments and questions.
http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 09/29/09 06:53 PM
Thank you very much. I looked at many pages on the HUD site and did not see that!
Regards
Regards
Posted By: Jan94
Re: RESPA changes 1-1-10 - 09/30/09 07:19 PM
On the new GFE form under Summary of your loan there is a line for "Your loan term is". Our forms vendor has included a field for months which doesn't show on the actual HUD form. If the loan is 30 months would it be alright for us to show it as 2.6 years and not include "months" on the line? Thank you.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 09/30/09 10:08 PM
No. This is brought up in the FAQs. You can't "touch" the form. You must use the form as is. You'll need to state "2.6".
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 10/01/09 02:09 AM
If we provide a GFE with a company the borrower chooses from our "written list", then they change their mind and want to pick a different company (not on our list), would that be considered a changed circumstance because the borrower requested the change. I think so according to § 3500.7 Good faith estimate or GFE.
(3) Borrower-requested changes. If a borrower requests changes to the mortgage loan identified in the GFE that change the settlement charges or the terms of the loan, the loan originator may provide a revised GFE to the borrower. If a revised GFE is to be provided, the loan originator must do so within 3 business days of the borrower’s request.
(3) Borrower-requested changes. If a borrower requests changes to the mortgage loan identified in the GFE that change the settlement charges or the terms of the loan, the loan originator may provide a revised GFE to the borrower. If a revised GFE is to be provided, the loan originator must do so within 3 business days of the borrower’s request.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 10/01/09 02:19 AM
Also, how do we document that the borrower has not expressed intent to continue with the application?
(4) Expiration of original GFE. If a borrower does not express an intent to continue with an application within 10 business days after the GFE is provided,or such longer time specified by the loan originator pursuant to paragraph (c)above, the loan originator is no longer bound by the GFE.
(4) Expiration of original GFE. If a borrower does not express an intent to continue with an application within 10 business days after the GFE is provided,or such longer time specified by the loan originator pursuant to paragraph (c)above, the loan originator is no longer bound by the GFE.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/01/09 02:34 AM
First question (choosing someone from your recommended list and then changing their mind): You issue the GFE, then they pick a company. Even if it's a different company, why would that cause you to need to issue a new GFE? You issue the HUD-1/1A with the final charges and the tolerances apply to whether they picked one of your recommended providers or not. I guess I don't understand how that affects you.
Second question: You'll have to have some contact with the borrower after they receive the GFE. The LO should write down when they talked to them and their wish to continue.
Second question: You'll have to have some contact with the borrower after they receive the GFE. The LO should write down when they talked to them and their wish to continue.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 10/01/09 03:24 AM
Since they requested the change wouldn't that require a new GFE in order to show we are no longer subject to the tolerance?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/01/09 02:42 PM
The tolerances aren't established until you prepare the Settlement Statement. Whether they go with their own service provider or one you recommended doesn't matter until you prepare the SS. You don't identify service providers on the GFE for which they can shop, so why would you need to prepare a new GFE?
Posted By: Anonymous
Re: RESPA changes 1-1-10 - 10/01/09 06:56 PM
Can anyone say disaster waiting to happen? If we are having this much confusion, can you imagine the poor consumer? I was told in a CBA course that if you require the service, you have to provide a list of providers for them to choose from, including pest, homeowners insurance, etc.
Posted By: Ninky
Re: RESPA changes 1-1-10 - 10/01/09 08:30 PM
This may be obvious to everyone else, but by "locked rate" does that refer only to formal, written rate lock agreements?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/01/09 08:43 PM
Originally Posted By: Georgia Plum
I was told in a CBA course that if you require the service, you have to provide a list of providers for them to choose from, including pest, homeowners insurance, etc.
You are correct. This is mentioned in 1 sentence in Appendix C - the instructions for how to complete the GFE. There are several (7) Q&A's in the HUD FAQs about this beginning on page 10.
Posted By: MT Pockets
Re: RESPA changes 1-1-10 - 10/01/09 11:25 PM
I have a question on how to categorize settlement services that are selected by the realtor but the buyer pays part of the fee? Our mortgage lenders tell me that normally, in our area, the realtor selects the title company which is also the closing agent but the buyer pays fees for the title insurance/closing costs. Can we say the Bank selects and live with the 10% tolerance level?
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 10/02/09 01:11 AM
Originally Posted By: David Dickinson
The tolerances aren't established until you prepare the Settlement Statement. Whether they go with their own service provider or one you recommended doesn't matter until you prepare the SS. You don't identify service providers on the GFE for which they can shop, so why would you need to prepare a new GFE?
Ok so at the time of application:
1. we tell them they can shop around for a title company to do the title search
2. we give them the required written list of title companies and they pick someone from the list.
3. that title company charges $500.00 for the service so we disclose that on the GFE
4. according to the new rules that fee is now subject to a 10% tolerance (because they decided not to shop around and pick from our list).
5. they contact us and tell us they want to use a different company for the title search (not on our list)
6. when we prepare the SS we put the fees from that title company on the SS - lets say $800.00
7. we do not have to provide a new GFE and we are not obligated to the 10% tolerance between the GFE and the HUD.
That's wonderful. We thought that once you gave the GFE that the fees for a required service could not change.
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 10/02/09 10:39 AM
Regarding the "Provider List", obviously flood/hazard insurance is one that is required not only by us but our regulators. Is this required to be on the providers list? Our bank does not sell nor refer this type of insurance, yet this change may force us to develop relationships and become a referral source. This is problematic for us since we are a national lender.
Any thought?
Thanks in advance.
Any thought?
Thanks in advance.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/02/09 01:06 PM
Originally Posted By: OldSchoolBanker
Regarding the "Provider List", obviously flood/hazard insurance is one that is required not only by us but our regulators. Is this required to be on the providers list? Our bank does not sell nor refer this type of insurance, yet this change may force us to develop relationships and become a referral source. This is problematic for us since we are a national lender.
I agree this is going to be a pain. RESPA requires you to give them a list of recommended providers for ALL settlement services for which you allow them to shop. This includes insurance. There are several Q&A's about the list including one that says this becomes a referral. Which then makes me wonder if we're going to back ourselves into Section 8 issues.
There's another Q&A about providing the list that is relevant to the borrower. IOW, don't list companies not in their area.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/02/09 01:41 PM
Quote:
Ok so at the time of application:
1. we tell them they can shop around for a title company to do the title search
2. we give them the required written list of title companies and they pick someone from the list.
3. that title company charges $500.00 for the service so we disclose that on the GFE
4. according to the new rules that fee is now subject to a 10% tolerance (because they decided not to shop around and pick from our list).
5. they contact us and tell us they want to use a different company for the title search (not on our list)
6. when we prepare the SS we put the fees from that title company on the SS - lets say $800.00
7. we do not have to provide a new GFE and we are not obligated to the 10% tolerance between the GFE and the HUD.
That's wonderful. We thought that once you gave the GFE that the fees for a required service could not change.
1. we tell them they can shop around for a title company to do the title search
2. we give them the required written list of title companies and they pick someone from the list.
3. that title company charges $500.00 for the service so we disclose that on the GFE
4. according to the new rules that fee is now subject to a 10% tolerance (because they decided not to shop around and pick from our list).
5. they contact us and tell us they want to use a different company for the title search (not on our list)
6. when we prepare the SS we put the fees from that title company on the SS - lets say $800.00
7. we do not have to provide a new GFE and we are not obligated to the 10% tolerance between the GFE and the HUD.
That's wonderful. We thought that once you gave the GFE that the fees for a required service could not change.
You're #3 is incorrect. You issue the GFE and provide the written list of providers BEFORE they select a service provider. You won't know who they are using until AFTER the GFE is issued. You must make your best guess of the fee BEFORE they choose a company and list that fee on the GFE. If they choose someone one your list, you are subject to a 10% tolerance. If they choose someone not on your list, there is no tolerance.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/02/09 01:44 PM
Originally Posted By: MT Pockets
I have a question on how to categorize settlement services that are selected by the realtor but the buyer pays part of the fee? Our mortgage lenders tell me that normally, in our area, the realtor selects the title company which is also the closing agent but the buyer pays fees for the title insurance/closing costs. Can we say the Bank selects and live with the 10% tolerance level?
Refer to the RESPA FAQs:
GFE-Seller Paid Q&A #1 & 2, and
GFE - Block 5 Q&A #1 & 2.
Posted By: MT Pockets
Re: RESPA changes 1-1-10 - 10/02/09 02:51 PM
Thank you. I am more confused the more I read and try to understand how we are supposed to complete the GFE and HUD 1 accurately. Trying to explain to lenders and customers is a huge challenge.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/02/09 03:02 PM
I know exactly what you mean. Plus the GFE never tells the applicant what to bring to the closing table (as somethings are POC, paid by the seller, etc.). It also never tells them their total PITI if they have an escrow. Thanks HUD!
Posted By: CrookedVulture
Re: RESPA changes 1-1-10 - 10/02/09 06:26 PM
I have a question about the updated definition of mortgage broker in the new RESPA rules. The updated definition is as follows:
"Mortgage Broker means a person (not an employee of a lender) or entity that renders origination services and serves as an intermediary between a borrower and a lender in a transaction involving a federally related mortgage loan, including such a person or entity that closes the loan in its own name in a table funded transaction. A loan correspondent approved under 24 CFR 202.8 for Federal Housing Administration programs is a mortgage broker for purposes of this part."
I work for a bank that closes mortgage loans in our own name using our own funds with the purpose of then selling those loans to other financial institutions (or Freddie/Fannie). Is that considered table-funding? And if so, are we then considered a mortgage broker under this definition?
Also, the amended Reg Z 226.36 includes a new definition of mortgage broker that is limited to a "person". So it's possible that we will be considered a mortgage broker under RESPA but not under Reg Z?
Thanks in advance for any guidance.
"Mortgage Broker means a person (not an employee of a lender) or entity that renders origination services and serves as an intermediary between a borrower and a lender in a transaction involving a federally related mortgage loan, including such a person or entity that closes the loan in its own name in a table funded transaction. A loan correspondent approved under 24 CFR 202.8 for Federal Housing Administration programs is a mortgage broker for purposes of this part."
I work for a bank that closes mortgage loans in our own name using our own funds with the purpose of then selling those loans to other financial institutions (or Freddie/Fannie). Is that considered table-funding? And if so, are we then considered a mortgage broker under this definition?
Also, the amended Reg Z 226.36 includes a new definition of mortgage broker that is limited to a "person". So it's possible that we will be considered a mortgage broker under RESPA but not under Reg Z?
Thanks in advance for any guidance.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/02/09 06:42 PM
Quote:
I work for a bank that closes mortgage loans in our own name using our own funds with the purpose of then selling those loans to other financial institutions (or Freddie/Fannie). Is that considered table-funding? And if so, are we then considered a mortgage broker under this definition?
"table funding" (see the definition in §3500.2) is when the funds aren't yours. If you use your own funds, you are not table funding and you're not a broker.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 10/03/09 01:49 AM
Originally Posted By: David Dickinson
Quote:
Ok so at the time of application:
1. we tell them they can shop around for a title company to do the title search
2. we give them the required written list of title companies and they pick someone from the list.
3. that title company charges $500.00 for the service so we disclose that on the GFE
4. according to the new rules that fee is now subject to a 10% tolerance (because they decided not to shop around and pick from our list).
5. they contact us and tell us they want to use a different company for the title search (not on our list)
6. when we prepare the SS we put the fees from that title company on the SS - lets say $800.00
7. we do not have to provide a new GFE and we are not obligated to the 10% tolerance between the GFE and the HUD.
That's wonderful. We thought that once you gave the GFE that the fees for a required service could not change.
1. we tell them they can shop around for a title company to do the title search
2. we give them the required written list of title companies and they pick someone from the list.
3. that title company charges $500.00 for the service so we disclose that on the GFE
4. according to the new rules that fee is now subject to a 10% tolerance (because they decided not to shop around and pick from our list).
5. they contact us and tell us they want to use a different company for the title search (not on our list)
6. when we prepare the SS we put the fees from that title company on the SS - lets say $800.00
7. we do not have to provide a new GFE and we are not obligated to the 10% tolerance between the GFE and the HUD.
That's wonderful. We thought that once you gave the GFE that the fees for a required service could not change.
You're #3 is incorrect. You issue the GFE and provide the written list of providers BEFORE they select a service provider. You won't know who they are using until AFTER the GFE is issued. You must make your best guess of the fee BEFORE they choose a company and list that fee on the GFE. If they choose someone one your list, you are subject to a 10% tolerance. If they choose someone not on your list, there is no tolerance.
Thanks David, now it makes much more sense. We were trying to figure out how to quote fees from a company we don't normally do business with. We are thinking about only putting one title company on our list and putting their charges on the GFE. Then if they pick them, we won't be going over the tolerance because the charges will be accurate. And if they don't pick that company, a tolerance does not apply. Win-Win - Hope I got it right this time.
Posted By: Ninky
Re: RESPA changes 1-1-10 - 10/05/09 06:07 PM
What about subordinate lien purchase transactions?(piggybacks) Under GFE Block 5 in the appendix C, it says for all purchase transactions you must provide an estimate of the charge for the owners' title policy. The Q&A says each purchase transaction must have a separate GFE and separate HUD1. As the 2nd lien holder, we do not require this Owner's TP. Can we put NA on our GFE?
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 10/06/09 07:14 PM
Any fifty state nationwide lenders who would like to compare notes on the new GFE challenges, please send me a message. I am interested in opening a dialogue with other national lenders on several GFE related issues.
Thanks
Thanks
Posted By: Ninky
Re: RESPA changes 1-1-10 - 10/07/09 02:45 PM
I always thought that the borrower was supposed to choose their title company, that the lender could not tell them where they had to close their loan. For the Lender's title services and policy, we are held to a 10% tolerance if we select the company? So, I guess we can tell a borrower where they have to close?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/07/09 02:49 PM
If you consider that a "required" provider, yes.
Posted By: Oursisnottoreasonwhy
Re: RESPA changes 1-1-10 - 10/07/09 04:05 PM
Originally Posted By: David Dickinson
You're #3 is incorrect. You issue the GFE and provide the written list of providers BEFORE they select a service provider. You won't know who they are using until AFTER the GFE is issued. You must make your best guess of the fee BEFORE they choose a company and list that fee on the GFE. If they choose someone one your list, you are subject to a 10% tolerance. If they choose someone not on your list, there is no tolerance.
If you have 3 Title companies on your "list" 1 charges $100 2 charges $150 3 charges $300
If I pick #1 to put on my GFE because I want to show the lowest closing costs to be competitive, the customer picks #2 or #3 because they have some type of loyalty to that title company, are we not outside the 10% tolerance? Or after they select I need to issue a revised GFE?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/07/09 04:25 PM
If they choose someone on your list, YOU are subject to the 10% tolerance. If they choose someone on your list, this is NOT a changed circumstance allowing you to issue a new GFE. Therefore, you probably need to list the highest $ amount.
Posted By: Ninky
Re: RESPA changes 1-1-10 - 10/07/09 04:27 PM
Does anyone know where we can find the new GFE in a WORD format?
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 10/07/09 08:56 PM
HUD has updated the RESPA FAQs today (10/7). A new item was added on page 19 to address the recent guidance from the FRB to HUD regarding the FHA prepayment penalty issue. A new item was added on page 33 to address how to show points on the new HUD-1 form to help with IRS 1098 reporting.
http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs.pdf
http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs.pdf
Posted By: Oursisnottoreasonwhy
Re: RESPA changes 1-1-10 - 10/08/09 02:46 PM
Has HUD produced the new Settlement Cost Booklet?
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 10/08/09 02:49 PM
Not yet. The last page of the FAQs says they will publish it on their website and put a notice in the Federal Register when it is available.
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 10/08/09 09:07 PM
HUD updated the FAQs again on 10-7-09: HUD FAQ 10-7-09
Posted By: Ninky
Re: RESPA changes 1-1-10 - 10/08/09 10:00 PM
Under the Summary of your loan, if the balloon payment is due in an odd amount of months, do you round? i.e. if it will be due in 15 yrs and 6 months, do we put 15 years or 15.5 years? What is expected or acceptable?
Posted By: MT Pockets
Re: RESPA changes 1-1-10 - 10/09/09 04:56 PM
Since "years" is hardcoded and there is no other guidance in the instructions or Q & A, seems to me it would be 15.5 but applying logic to this new GFE does not always give you the right answer.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/09/09 06:40 PM
Did the credit life entry ever get answered? I have scanned but have not found any replies on that. thanks! I'm beginning to think, since it's not required, it would just be shown as "other fees" on the HUD 1, 1300 series...and not appear on the GFE at all.
Also...I see where the opinion is back that you will have to provide a list of insurance companies...that's not an item in 4, 5 or 6..it's at 11, so why or where does it state this would require a list?
Also...I see where the opinion is back that you will have to provide a list of insurance companies...that's not an item in 4, 5 or 6..it's at 11, so why or where does it state this would require a list?
Posted By: GoBigRed
Re: RESPA changes 1-1-10 - 10/12/09 12:59 PM
Even though a signature is not required on the GFE, are we allowed to add a signature page/line at the end of the new form?
Posted By: MT Pockets
Re: RESPA changes 1-1-10 - 10/12/09 05:54 PM
I have a question on repair inspection fees. The bank selects the appraiser for the inspection and we do not retain the fee. Currently, we disclosed it on line 805 of the HUD 1 and on the GFE. On the new GFE,would the inspection fee be on Block 3 and subject to the 10% tolerance? The 10/7/09 Q & A for GFE - Block 1 question 2 indicates the lender inspection fees would be part of "Our origination charge" in Block 1 but we are not retaining the fee.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/13/09 01:24 PM
Originally Posted By: GoBigRed
Even though a signature is not required on the GFE, are we allowed to add a signature page/line at the end of the new form?
No. You can't alter the GFE form. You could have a separate page that acknowledges receipt of the GFE.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/13/09 01:37 PM
Can someone provide a link to the final RESPA rule, either in the FR or HUD? I have checked both the FR and HUD and have been unable to locate the document.
Thanks in advance.
Thanks in advance.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/13/09 02:19 PM
http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm
This will take you to a page where the final rule and FAQs are available.
This will take you to a page where the final rule and FAQs are available.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/13/09 02:19 PM
Oops forgive me, I found it on the HUD site. Thanks
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/13/09 04:42 PM
OK, question about using an average charge. The way I am reading this, I should not use an average charge. Here is my reasoning. If you use an average charge, and my total settlement charges subject to the 10% rule are exceeded by 10%, I will still need to reimburse. Am I right?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/13/09 05:28 PM
Yes.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/13/09 06:37 PM
Does anyone have copies of the new GFE and HUD-1 in excel or microsoft word so that we can modify them to do training?
Thanks
Thanks
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/13/09 08:28 PM
I know I am going to be asking some annoying opinions on here in the next few days. Please take a look at question 6 on page 28 of the new Q&A. It reads:
6) Q: How should payments by the seller or real estate agent that are for settlement services included on the GFE be shown on the HUD-1?
A: If a seller or real estate agent pays for a charge that was included on the GFE, the charges should be listed in the borrower's column, with an offsetting credit reported in Lines 204-209 of the HUD-1, identifying the party paying the charge. For a seller-paid charge, the charge should also be listed in Lines 506-509. For a charge paid by the real estate agent, the name of the person paying the charge must also be listed.
To me, this says something very intersting and I want to see if everyone agrees. If you notice, no adjustment is made on page two of the HUD to the borrower's fees, if it is paid by the real estate broker or seller and listed on the GFE. To me, what that is saying is if you disclose the fee on the GFE, regardless of who paid it you must compare the HUD and GFE against each other on page 3 of the HUD. Thus, a fee such as an appraisal disclosed on the GFE, and paid by someone other than the bank, would be subject to the 10% rule. The reason I say that, is because in this example no cooresponding adjustment is made to the HUD like in the example given on question 9 page 26. The difference here is, the bank is not paying the charge.
Please opine.
6) Q: How should payments by the seller or real estate agent that are for settlement services included on the GFE be shown on the HUD-1?
A: If a seller or real estate agent pays for a charge that was included on the GFE, the charges should be listed in the borrower's column, with an offsetting credit reported in Lines 204-209 of the HUD-1, identifying the party paying the charge. For a seller-paid charge, the charge should also be listed in Lines 506-509. For a charge paid by the real estate agent, the name of the person paying the charge must also be listed.
To me, this says something very intersting and I want to see if everyone agrees. If you notice, no adjustment is made on page two of the HUD to the borrower's fees, if it is paid by the real estate broker or seller and listed on the GFE. To me, what that is saying is if you disclose the fee on the GFE, regardless of who paid it you must compare the HUD and GFE against each other on page 3 of the HUD. Thus, a fee such as an appraisal disclosed on the GFE, and paid by someone other than the bank, would be subject to the 10% rule. The reason I say that, is because in this example no cooresponding adjustment is made to the HUD like in the example given on question 9 page 26. The difference here is, the bank is not paying the charge.
Please opine.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/13/09 08:47 PM
You're right. The GFE is supposed to list fees the borrower "typically" pays for (see several Q&As to support this). If someone else pays for it after the GFE is issued, is is not relevant. The tolerance rules still apply.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 10/14/09 01:07 AM
We are in the process of testing our lending software. When we enter the information for the GFE, everything looked great. We then entered the sellers information for the HUD and added the required seller paid item (such as transer fee). When we ran our comparison, the software showed we were out of tolerance by the amount of the items that the seller is required to pay. Should we have listed the seller paid items on the GFE even though the FAQ states not to? These are items that the borrower would not typically incur and the requirement for who should pay for them is not in question.
2) Q: Are charges to the seller listed on the GFE?
A: RESPA requires that only the borrower receive a GFE. The GFE is defined as an estimate of settlement charges a borrower is likely to incur in connection with the settlement. Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—do not have to be included on the GFE. If the borrower typically would incur charges for title services and lender's and owner's title insurance, the GFE instructions make it clear that those charges are required to be listed regardless of whether, for example, the contract requires the seller to pay for the service. If there is a question about whether the borrower or seller is to pay for a particular settlement service, the charge for that service should be disclosed on the GFE.
2) Q: Are charges to the seller listed on the GFE?
A: RESPA requires that only the borrower receive a GFE. The GFE is defined as an estimate of settlement charges a borrower is likely to incur in connection with the settlement. Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—do not have to be included on the GFE. If the borrower typically would incur charges for title services and lender's and owner's title insurance, the GFE instructions make it clear that those charges are required to be listed regardless of whether, for example, the contract requires the seller to pay for the service. If there is a question about whether the borrower or seller is to pay for a particular settlement service, the charge for that service should be disclosed on the GFE.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 10/14/09 01:25 AM
Originally Posted By: CompDat
Does anyone have copies of the new GFE and HUD-1 in excel or microsoft word so that we can modify them to do training?
Thanks
Thanks
We were also wondering about this. I found a site that is selling the forms in word or excel format. They are even on sale right now. We decided not to buy them. If you decide to buy them and if they work for your training purpose, let us all know.
Anyway, the site is http://www.formsinword.com/HUDhousingandurbandevelopmentHUD(page1)1-40093A.htm
Posted By: CO Officer
Re: RESPA changes 1-1-10 - 10/14/09 01:45 PM
When a borrower chooses not to escrow their taxes and insurance, we charge a fee that affects line 802 - would that be considered a changed circumstance?
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 10/14/09 01:57 PM
In today's the ABA Newsbytes,
HUD
ABA, Trade Groups Ask HUD to Postpone RESPA Rule’s Implementation Date
ABA and five other trade groups yesterday asked the Department of Housing and Urban Development to postpone the Jan. 1, 2010 implementation date of its final Real Estate Settlement Procedures Act rule, and then take several additional steps to achieve the rule’s effective implementation.
“Despite the best motivations of HUD, and the sincerest efforts of the industry, we are headed for a mortgage market train wreck on the tracks of RESPA compliance,” the trade groups said in a letter to HUD Secretary Shaun Donovan and Assistant Secretary David Stevens. “Unfortunately, the gap between the rule, which was unclear, and practical implementation is not being successfully bridged by the [frequently asked questions guidance].”
After postponing the rule’s implementation date, they said, HUD should finish resolving the issues described in the letter, many of which will require revised FAQs; provide a reasonable implementation period before compliance becomes mandatory; and notify the public that beginning Jan. 1 -- and through the implementation period -- that using the new or old forms in transactions subject to the rule will not constitute a RESPA violation. Read the letter. For more information, contact ABA’s Rod Alba.
HUD
ABA, Trade Groups Ask HUD to Postpone RESPA Rule’s Implementation Date
ABA and five other trade groups yesterday asked the Department of Housing and Urban Development to postpone the Jan. 1, 2010 implementation date of its final Real Estate Settlement Procedures Act rule, and then take several additional steps to achieve the rule’s effective implementation.
“Despite the best motivations of HUD, and the sincerest efforts of the industry, we are headed for a mortgage market train wreck on the tracks of RESPA compliance,” the trade groups said in a letter to HUD Secretary Shaun Donovan and Assistant Secretary David Stevens. “Unfortunately, the gap between the rule, which was unclear, and practical implementation is not being successfully bridged by the [frequently asked questions guidance].”
After postponing the rule’s implementation date, they said, HUD should finish resolving the issues described in the letter, many of which will require revised FAQs; provide a reasonable implementation period before compliance becomes mandatory; and notify the public that beginning Jan. 1 -- and through the implementation period -- that using the new or old forms in transactions subject to the rule will not constitute a RESPA violation. Read the letter. For more information, contact ABA’s Rod Alba.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/14/09 02:07 PM
Originally Posted By: jlroberts
We are in the process of testing our lending software. When we enter the information for the GFE, everything looked great. We then entered the sellers information for the HUD and added the required seller paid item (such as transer fee). When we ran our comparison, the software showed we were out of tolerance by the amount of the items that the seller is required to pay. Should we have listed the seller paid items on the GFE even though the FAQ states not to? These are items that the borrower would not typically incur and the requirement for who should pay for them is not in question.
2) Q: Are charges to the seller listed on the GFE?
A: RESPA requires that only the borrower receive a GFE. The GFE is defined as an estimate of settlement charges a borrower is likely to incur in connection with the settlement. Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—do not have to be included on the GFE. If the borrower typically would incur charges for title services and lender's and owner's title insurance, the GFE instructions make it clear that those charges are required to be listed regardless of whether, for example, the contract requires the seller to pay for the service. If there is a question about whether the borrower or seller is to pay for a particular settlement service, the charge for that service should be disclosed on the GFE.
2) Q: Are charges to the seller listed on the GFE?
A: RESPA requires that only the borrower receive a GFE. The GFE is defined as an estimate of settlement charges a borrower is likely to incur in connection with the settlement. Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—do not have to be included on the GFE. If the borrower typically would incur charges for title services and lender's and owner's title insurance, the GFE instructions make it clear that those charges are required to be listed regardless of whether, for example, the contract requires the seller to pay for the service. If there is a question about whether the borrower or seller is to pay for a particular settlement service, the charge for that service should be disclosed on the GFE.
Charges to the seller are listed on the GFE. Remember the GFE is a disclosure of fees that the borrower would be likely to pay. If the seller pays them, great, if not your borrower would have to pay them. This is precisely the reason the rules have changed. Because some lenders were claiming the borrower would pay nothing, to get the sale, then at close they would pay everything. It sounds like your software is working correctly.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/14/09 02:09 PM
Originally Posted By: CO Officer
When a borrower chooses not to escrow their taxes and insurance, we charge a fee that affects line 802 - would that be considered a changed circumstance?
I guess this one becomes a tought question and you should develop an internal rule to keep this consistent. IMO this would not constitute a change in circumstance if most of your applicants waived escrow and were charged the fee, and you did not ask the applicant what they would do. If this was the case, I would argue that your GFE was issued incorrectly and then would be subject to the tolerence.
However, if you did ask the borrower and they wanted to escrow, then changed their mind. IMO this could constitute a change in circumstance.
Posted By: Ninky
Re: RESPA changes 1-1-10 - 10/14/09 03:33 PM
One of the bullets in the ABA letter yesterday stated that one of the new requirements requiring more implementation time as "Prohibited used of HUD-1A on non-sale transactions when lenders cover borrower costs". Where is that in the reg? What would you use on home improvement and home equity "no cost" loans if not the HUD1A?
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/14/09 06:17 PM
On page 68243 of the Federal Register under the Appendix A for instructions for copleting the HUD-1 and HUD-1A:
Charges paid outside of settlement by the
borrower, seller, loan originator, real estate
agent, or any other person, must be included
on the HUD–1 but marked ‘‘P.O.C.’’ for ‘‘Paid
Outside of Closing’’ (settlement) and must
not be included in computing totals.
If you notice that since it does not say HUD-1A I am assuming they mean you must disclose this on the HUD-1. If you look at the new form HUD-1a there is no first page it would be hard to disclose that.
Charges paid outside of settlement by the
borrower, seller, loan originator, real estate
agent, or any other person, must be included
on the HUD–1 but marked ‘‘P.O.C.’’ for ‘‘Paid
Outside of Closing’’ (settlement) and must
not be included in computing totals.
If you notice that since it does not say HUD-1A I am assuming they mean you must disclose this on the HUD-1. If you look at the new form HUD-1a there is no first page it would be hard to disclose that.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/14/09 06:23 PM
Also if you notice how the cure provision works or lender paid item on the Q&A page 26 number 9, it says you must make a HUD-1. I believe because you need to show the offsetting entry on page 1 lite item 204-209 as well as the POC item on page 2 in the appropriate area.
Posted By: Ninky
Re: RESPA changes 1-1-10 - 10/14/09 07:20 PM
But that same page 68243 also says in the next paragraph:
In the case of "no cost" loans where "no cost" encompasses third party fees as well as the upfront payment to the loan originator, the third party services covered by the "no cost" provisions must be itemized and listed in the borrower's column on the HUD-1/1A with the charge for the third party service. These itemized charges must be offset with a negative adjusted origination charge on Line 803 and recorded in the columns.
I am confused. It doesn't really say, at least I don't understand it to say, that the HUD 1 must be used for "no cost" loans.
In the case of "no cost" loans where "no cost" encompasses third party fees as well as the upfront payment to the loan originator, the third party services covered by the "no cost" provisions must be itemized and listed in the borrower's column on the HUD-1/1A with the charge for the third party service. These itemized charges must be offset with a negative adjusted origination charge on Line 803 and recorded in the columns.
I am confused. It doesn't really say, at least I don't understand it to say, that the HUD 1 must be used for "no cost" loans.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/14/09 07:25 PM
Perhaps one area that might be causing some confusion is the HUD letters term "lender covers". In my example the lender is covering a cost and "making a cure" for all intents and purposes.
You are referring to "no cost" loans which would be treated differently because there would be no need to show costs on the 200 series titled "Amounts paid by, or on behalf of the borrower". IMO in those cases you could use the HUD-1A. But if the lender is paying part, then you need the HUD-1.
Does anyone else agree with me, or am I getting confused? IMO these fees, even though they would be no cost, would still need to be on the GFE.
You are referring to "no cost" loans which would be treated differently because there would be no need to show costs on the 200 series titled "Amounts paid by, or on behalf of the borrower". IMO in those cases you could use the HUD-1A. But if the lender is paying part, then you need the HUD-1.
Does anyone else agree with me, or am I getting confused? IMO these fees, even though they would be no cost, would still need to be on the GFE.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/15/09 02:43 PM
The POC issue is very confusing. It depends on when fees (paid by the lender or seller) or determined.
If you issue the GFE and then decide to eat a fee or the seller is going to pay for it, you'll need to show the offset in the 200 series. Hence, a HUD-1 is needed.
If you know the borrower is not going to pay a fee at the time the GFE is issued (like the bank will eat the flood determination) - a "no cost" or "partial no-cost loan" - then you can use a HUD-1A.
This is something we are going to cover in-depth at our upcoming webinar. Go here for more info:
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1253206816535
If you issue the GFE and then decide to eat a fee or the seller is going to pay for it, you'll need to show the offset in the 200 series. Hence, a HUD-1 is needed.
If you know the borrower is not going to pay a fee at the time the GFE is issued (like the bank will eat the flood determination) - a "no cost" or "partial no-cost loan" - then you can use a HUD-1A.
This is something we are going to cover in-depth at our upcoming webinar. Go here for more info:
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1253206816535
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/15/09 02:49 PM
I agree Dave. Correct me if I am wrong, but in your second scenario where the bank knows it will eat the flood determination, you offset that fee with a negative adjustment to origination charges in box 2.
Sorry if my questions seem like old hat. This banter and research is really helping me understand the regulation. FWIW I thought your training last week was excellent.
The reason I keep opining on thise questions is because I have not heard anyone expressly state that you can cure preclose. But the way I read the Q&As you can.
Sorry if my questions seem like old hat. This banter and research is really helping me understand the regulation. FWIW I thought your training last week was excellent.
The reason I keep opining on thise questions is because I have not heard anyone expressly state that you can cure preclose. But the way I read the Q&As you can.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/15/09 03:51 PM
That's correct. Then you could use a HUD-1A and it will match the GFE.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 10/15/09 04:33 PM
Anyone else reading the 49 page ABA letter to HUD asking for a postponement of implementation? Page 2 has my favorite line so far.... I'm all for sacrificial offerings, bribes, whatever it will take to get this thing clarified adequately to not feel like I'm shooting kraps when it comes to interpretation and compliance.
Quote:
Without taking the steps recommended above, widespread consumer confusion, crippling market dysfunction and a strong possibility of imminent litigation morass are on the horizon.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/15/09 04:40 PM
I'm all for delaying the rules, but it's a little late. This would have been 6 months ago, before we all starting training, designing procedures, etc. Lots of wasted time on this one. Thanks HUD - NOT!
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 10/15/09 05:19 PM
David, look at this thread. We've all started training and changing but there are too many questions out there as to exactly what we're supposed to be doing not to mention all the contradictions created and I'm only on page 10 of the letter now!
Going forward with this on 1/1/10 IS a time bomb waiting to explode. I don't want my FI to be where the brown matter hits the fan of interpretations. I want this all spelled out clearly. Whatever training I've done up to now won't be wasted.
Going forward with this on 1/1/10 IS a time bomb waiting to explode. I don't want my FI to be where the brown matter hits the fan of interpretations. I want this all spelled out clearly. Whatever training I've done up to now won't be wasted.
Posted By: BFaith
Re: RESPA changes 1-1-10 - 10/15/09 05:35 PM
Can someone provide a link to the ABA letter?
Posted By: BFaith
Re: RESPA changes 1-1-10 - 10/15/09 05:50 PM
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 10/15/09 06:17 PM
Hypothetically speaking, Would it be permissible for a bank to raise its origination fee, say $250 to help defray the cost of the anticipated expenses from fees that will be over the GFE tolerance range that they will soon have to absorb?
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 10/15/09 06:23 PM
Had a question from the Processing area and I am not sure of the answer.
Where does the Delivery Charge for a Fannie Mae loan go on the new GFE?
Where does the Delivery Charge for a Fannie Mae loan go on the new GFE?
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/15/09 06:26 PM
DD I am not sure why not. I think it is permissible. I would also say the delivery charge would probably go under costs charged by you. One of the Q&As talks about this. I believe it is question 12 page 6. This is eally a document delivery fee.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/15/09 08:05 PM
Originally Posted By: Truffle Royale
David, look at this thread. We've all started training and changing but there are too many questions out there as to exactly what we're supposed to be doing not to mention all the contradictions created and I'm only on page 10 of the letter now!
Going forward with this on 1/1/10 IS a time bomb waiting to explode. I don't want my FI to be where the brown matter hits the fan of interpretations. I want this all spelled out clearly. Whatever training I've done up to now won't be wasted.
Going forward with this on 1/1/10 IS a time bomb waiting to explode. I don't want my FI to be where the brown matter hits the fan of interpretations. I want this all spelled out clearly. Whatever training I've done up to now won't be wasted.
I agree. I was simply ranting that it would have been nice to know this BEFORE we all began training and preparing.
Posted By: NCBanker
Re: RESPA changes 1-1-10 - 10/16/09 02:34 PM
Am I correct in saying that the list of providers (from which the customer can shop)does NOT have to include any price information?
If that is the case, the customer theoretically could not make their decision without going home and "shopping".
So in the meantime, what amount do you disclose for that particular service? I'm hearing people say to disclose with the highest amount on your list of providers, but that potentially puts you at a competitive disadvantage.
Does anyone have another interpretation or solution?
I'm mainly worried about the list of attorneys. Can anyone else share how they plan to handle the process of estimating attorney fees?
Thank you.
If that is the case, the customer theoretically could not make their decision without going home and "shopping".
So in the meantime, what amount do you disclose for that particular service? I'm hearing people say to disclose with the highest amount on your list of providers, but that potentially puts you at a competitive disadvantage.
Does anyone have another interpretation or solution?
I'm mainly worried about the list of attorneys. Can anyone else share how they plan to handle the process of estimating attorney fees?
Thank you.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/16/09 02:47 PM
Quote:
Am I correct in saying that the list of providers (from which the customer can shop)does NOT have to include any price information?
Correct. There is no guidance about what needs to be included on the list. I would think you would at least provide the contact info. You can certainly add pricing info.
The GFE must have a fee for the service. You have tolerances to live by, so you're really forced to pick the highest fee possible for each service.
Posted By: bankchick
Re: RESPA changes 1-1-10 - 10/16/09 03:26 PM
I sent an e-mail to Ron Alba, one of the authors of the ABA letter in regards to where the credit life should be listed. He stated that since credit life is an optional item, it would go in 904/905 section on the Hud-1. However, he said he addressed the question to several of the RESPA attorneys and they are quite stumped on the GFE answer. The lists on the GFE are for required items, not optional items.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 10/16/09 04:02 PM
I attended another training session yesterday on RESPA and now even more confused. Am I correct that a new GFE cannot be issued if we know a fee has changed in the process and that we must wait until closing and see if 10% tolerance and if so, reimburse the fee. What happens if you underestimate.
Posted By: Carolina Blue
Re: RESPA changes 1-1-10 - 10/16/09 08:24 PM
Our mortgage department manager is telling me that a credit report fee can vary anywhere from $12 to $200 based on the number of investors the loan is shopped to and the number of credit report updates they have to obtain. How in the heck can we disclose that on the new GFE?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/18/09 05:34 PM
Originally Posted By: Carolina Blue
Our mortgage department manager is telling me that a credit report fee can vary anywhere from $12 to $200 based on the number of investors the loan is shopped to and the number of credit report updates they have to obtain. How in the heck can we disclose that on the new GFE?
I've never seen a CR costing more then $50. Are you sure?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/18/09 05:37 PM
Originally Posted By: ahkcompliance
Am I correct that a new GFE cannot be issued if we know a fee has changed in the process and that we must wait until closing and see if 10% tolerance and if so, reimburse the fee. What happens if you underestimate.
There are many "changed circumstances" that will allow you to re-issue a GFE. If you get to closing and are outside of tolerance, you need to cure the violation by "eating" the difference between the overage and the tolerance limit. You must also issue a new Settlement Statement showing the correction.
We will be discussing this (and more) in our upcoming webinar where we discuss how to complete the GFE & SS line by line. You can find more info here:
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1253206816535
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/18/09 05:40 PM
Originally Posted By: bankchick
I sent an e-mail to Ron Alba, one of the authors of the ABA letter in regards to where the credit life should be listed. He stated that since credit life is an optional item, it would go in 904/905 section on the Hud-1. However, he said he addressed the question to several of the RESPA attorneys and they are quite stumped on the GFE answer. The lists on the GFE are for required items, not optional items.
I agree this is a "stumper", but believe credit life insurance would go in block 6 of the GFE. I know this states "required services . . ." but it's the only "logical" place.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 10/19/09 03:03 PM
I guess I'm having a difficult time understanding why single premium optional credit insurance would have to be disclosed as a "settlement cost" on the GFE. It's money being borrowed to purchase a optional product (thus reflecting in the initial loan amount), not to pay for a settlement item such as required homeowners insurance, pay taxes current, pay for the appraisal, tile insurance, etc.
Have I missed something in the new instructions?
I agree it is to be disclosed on the Settlement Statement, but even then I think it's more appropriate to disclose it in the 800 series (its a fee being paid to the bank where they don't retain all of it) vs the 900 series, but Appendix A does instruct you to disclose in the 900 series; I guess because it is a single premium and is requirend to be paid in advance.
Have I missed something in the new instructions?
I agree it is to be disclosed on the Settlement Statement, but even then I think it's more appropriate to disclose it in the 800 series (its a fee being paid to the bank where they don't retain all of it) vs the 900 series, but Appendix A does instruct you to disclose in the 900 series; I guess because it is a single premium and is requirend to be paid in advance.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/19/09 03:58 PM
Providing lists of providers. I have a question. I know it's been discussed in this thread having to give a list of insurance companies, HOWEVER, since that is an item all by itself on the GFE, I am questioning that logic ( would question the logic of this anyway! ). Has this thought process changed? Sorry, I've been on vacation and thought I may have missed something even in my scanning back through!
). Has this thought process changed? Sorry, I've been on vacation and thought I may have missed something even in my scanning back through!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/19/09 04:14 PM
I've been thinking about optional credit insurance and the GFE. I believe it goes on line 904 (if it's optional) of the HUD-1/1A. If you require it, it appears to go in the 1300 series (included in 1301 and itemized outside the borrower's column).
I now believe that it would not be listed on the GFE if it is not required by the lender. Appendix C of RESPA states to list items required in connection with the loan. Optional insurance doesn't meet this criteria.
As I think about this, many other fees come to mind that are not required for the loan (homeowners association dues, for instance). Read Q&A #9 in the HUD-1 General Section about surveys. There's 4 different answers depending on whether it is required and by whom. Specifically, look at Answer d.
I now believe that it would not be listed on the GFE if it is not required by the lender. Appendix C of RESPA states to list items required in connection with the loan. Optional insurance doesn't meet this criteria.
As I think about this, many other fees come to mind that are not required for the loan (homeowners association dues, for instance). Read Q&A #9 in the HUD-1 General Section about surveys. There's 4 different answers depending on whether it is required and by whom. Specifically, look at Answer d.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 10/19/09 04:17 PM
David, because Home Owners Association dues include the insurance premium for the blanket policy, I'd argue that they ARE required to make the loan. Just sayin'...not a good example of fees not required for the loan.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/19/09 04:21 PM
Dang. Just when I thought I had it figured out. Dave, I think I agree with you on this. IMO this would qualify as something the borrower could shop for on their own (even though they don't) and would be subject to an unlimited tolerence.
However if the bank required it, I believe this would go 900 series, but I have a different reason. I believe it goes there because it is not optional. This would follow the same logic as a VA funding fee.
However if the bank required it, I believe this would go 900 series, but I have a different reason. I believe it goes there because it is not optional. This would follow the same logic as a VA funding fee.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/19/09 04:27 PM
Originally Posted By: RR joker
Providing lists of providers. I have a question. I know it's been discussed in this thread having to give a list of insurance companies, HOWEVER, since that is an item all by itself on the GFE, I am questioning that logic ( would question the logic of this anyway! ). Has this thought process changed? Sorry, I've been on vacation and thought I may have missed something even in my scanning back through!
). Has this thought process changed? Sorry, I've been on vacation and thought I may have missed something even in my scanning back through! You only need to provide a list of providers for GFE items 4-6. See the Q&As #4 in the "GFE-Written List of Providers" section.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/19/09 04:53 PM
okay, I was just remembering a lengthly discussion on this before I left and didn't see where it got "straighted out"..thanks, David!
Posted By: ahou
Re: RESPA changes 1-1-10 - 10/19/09 05:02 PM
We pass on the third party overnight delivery charges to the seller or buyer for sending payoffs overnight to reduce the interest they have to pay.
We do not require the overnight fee for our own administrative purposes, such as delivery of documents between offices. Where do we put this fee? Is it part of the title charge or our origination charge?
We do not require the overnight fee for our own administrative purposes, such as delivery of documents between offices. Where do we put this fee? Is it part of the title charge or our origination charge?
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/19/09 06:05 PM
I am not sure I am reading your question or fee correctly. If you charging a fee "courier fee" for sending payoffs (settlement) then I would call this an title fee.
I have never heard of this, and I could be wrong but it seems like the logical place to me.
See question 4 page 22 of the Q&A. It says that a title service is a service for conducting settlement.
My edit here: What on Earth this fee has anything to do with Title fees I don't know.
I have never heard of this, and I could be wrong but it seems like the logical place to me.
See question 4 page 22 of the Q&A. It says that a title service is a service for conducting settlement.
My edit here: What on Earth this fee has anything to do with Title fees I don't know.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/19/09 06:54 PM
Originally Posted By: David Dickinson
I've been thinking about optional credit insurance and the GFE. I believe it goes on line 904 (if it's optional) of the HUD-1/1A. If you require it, it appears to go in the 1300 series (included in 1301 and itemized outside the borrower's column).
I now believe that it would not be listed on the GFE if it is not required by the lender. Appendix C of RESPA states to list items required in connection with the loan. Optional insurance doesn't meet this criteria.
I now believe that it would not be listed on the GFE if it is not required by the lender. Appendix C of RESPA states to list items required in connection with the loan. Optional insurance doesn't meet this criteria.
Also, look at Q&A #1 in the "HUD-1 - 1300 Series" section. It states the 1300 series is used to record charges "not disclosed on the GFE".
Posted By: Gotwood
Re: RESPA changes 1-1-10 - 10/19/09 07:06 PM
I fear in HUD's effort to prove they are protecting the consumer, they are adament about getting something out, even if it is flawed.
This is a train wreck waiting to happen. All aboard!
This is a train wreck waiting to happen. All aboard!
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/19/09 07:13 PM
Originally Posted By: David Dickinson
Originally Posted By: David Dickinson
I've been thinking about optional credit insurance and the GFE. I believe it goes on line 904 (if it's optional) of the HUD-1/1A. If you require it, it appears to go in the 1300 series (included in 1301 and itemized outside the borrower's column).
I now believe that it would not be listed on the GFE if it is not required by the lender. Appendix C of RESPA states to list items required in connection with the loan. Optional insurance doesn't meet this criteria.
I now believe that it would not be listed on the GFE if it is not required by the lender. Appendix C of RESPA states to list items required in connection with the loan. Optional insurance doesn't meet this criteria.
Also, look at Q&A #1 in the "HUD-1 - 1300 Series" section. It states the 1300 series is used to record charges "not disclosed on the GFE".
Your right I apologize. I think I was getting the two switched around.
So on the 900 series when requied on the 1300 when not required.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/19/09 07:18 PM
Dave can you help me understand this. I just went back and read the last two posts and your post states:
believe it goes on line 904 (if it's optional) of the HUD-1/1A. If you require it, it appears to go in the 1300 series (included in 1301 and itemized outside the borrower's column)
The way I read it, I would put it the other way around. I think I might be missing something.
believe it goes on line 904 (if it's optional) of the HUD-1/1A. If you require it, it appears to go in the 1300 series (included in 1301 and itemized outside the borrower's column)
The way I read it, I would put it the other way around. I think I might be missing something.
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 10/19/09 07:43 PM
I have to say - I am still very confused about the written preferred providers of service.
Block 3 - Required Services that we select - are these vendors that are on the written preferred providers of service even though the borrower is restricted to the 1 credit bureau, the 1 flood cert and even though there are 4 appraisers, they don't get the choice there either (thanks to HVCC).
or is my written list limited to the providers of service they CAN shop for - such as title company and (strangely) pest inspection or surveyor even though I don't know any of these providers - that's handled by the settlement agent.
Block 3 - Required Services that we select - are these vendors that are on the written preferred providers of service even though the borrower is restricted to the 1 credit bureau, the 1 flood cert and even though there are 4 appraisers, they don't get the choice there either (thanks to HVCC).
or is my written list limited to the providers of service they CAN shop for - such as title company and (strangely) pest inspection or surveyor even though I don't know any of these providers - that's handled by the settlement agent.
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 10/19/09 07:50 PM
Here's a question I haven't seen anywhere in the forum yet - and it has to do with the monthly payment - P&I + MI
Is there any type of tolerance on the MI? While I can match the principal and interest payment back to the loan amount, note rate and loan term, I may not know the MI company at the time of the GFE. Each has their own set of rates and risk based pricing (granted which I would know from the credit score) BUT you get my drift. What would happen if I had to change MI in mid-stream and MI company #2 had higher rates. Is that an issue?
Is there any type of tolerance on the MI? While I can match the principal and interest payment back to the loan amount, note rate and loan term, I may not know the MI company at the time of the GFE. Each has their own set of rates and risk based pricing (granted which I would know from the credit score) BUT you get my drift. What would happen if I had to change MI in mid-stream and MI company #2 had higher rates. Is that an issue?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/19/09 08:13 PM
respa queen...in regard to your first post, the written list is for providers they can shop for (block 4, 5,6 ). Also, the purchaser could never choose their appraiser, even pre HVCC.
on to the second post, monthly MI and PMI isn't contained in a field subject to tolerances. (upfront charges are in the 10% tolerance)
on to the second post, monthly MI and PMI isn't contained in a field subject to tolerances. (upfront charges are in the 10% tolerance)
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/19/09 08:14 PM
Yes, the written list is limited to those they can shop.
A 10% threshold should be applied to the MI if they cannot shop. However, you are requiring it, and they cannot shop. You are required to take steps to know the amount or be within 10% before you issue the GFE.
A 10% threshold should be applied to the MI if they cannot shop. However, you are requiring it, and they cannot shop. You are required to take steps to know the amount or be within 10% before you issue the GFE.
Posted By: Ninky
Re: RESPA changes 1-1-10 - 10/19/09 09:57 PM
We have heard that some banks are considering using one fee across the board to originate loans. No pass through or reconciling 3rd party fees.....this is our fee to make this loan to you. There would be no offset, as in a no cost loan, only the one origination fee. No tolerance concerns or redisclosure problems. Is this a possiblity?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/20/09 02:46 PM
Someone mentioned earlier today that BOfA is now charging an application fee...wouldn't this be prohibited by not only the new RESPA, but also the changes effective already in Z? I know they could collect such a fee once the application was accepted by the borrower, but I wouldn't think that would fly up front.
(I'm guessing this is in addition TO a credit report and appraisal fee)
(I'm guessing this is in addition TO a credit report and appraisal fee)
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/20/09 05:24 PM
Question to those of you who "keep" the YSP on above par loans...do you gather from a few of the Q&A's that this will no longer be happening? The only way I can see for it to possibly happen is if you place the part you intend to "keep" in origination charges, and the part, if any, you intend to credit the borrower in Block 2?
Posted By: AuditorK
Re: RESPA changes 1-1-10 - 10/20/09 06:39 PM
Can anyone tell me where in the @#* property taxes go on the new GFE? For the life of me, I just can't figure out where.
I've had my fair share of RESPA changes for the day - in case you can't tell
I've had my fair share of RESPA changes for the day - in case you can't tell
Posted By: BLPage
Re: RESPA changes 1-1-10 - 10/20/09 08:16 PM
In BOL's webinar, RESPA-Implementing the New Rules, it was stated that it should be noted that "No taxes, No PITI" appears on the new GFE." So, it's not that you can't find where to put the taxes, it's that there's no place to put them. The GFE confines itself to escrowed taxes only.
Posted By: BLPage
Re: RESPA changes 1-1-10 - 10/20/09 08:38 PM
I have a question regarding the GFE and 'Changed Circumstances."
* The GFE is sent out but without a bank origination charge noted.
* The $1M loan is approved by the Loan Committee, but with a 1% origination charge.
* The HUD Line 801/GFE #1 now has a $10,000 variance in the GFE vs. HUD comparison section.
Is the decision to collect the origination fee at time of approval a "changed circumstance" so a revised GFE can go out showing that $10,000 charge increase ? I believe it should be because the collection requirement was not known when the GFE was sent out. We have this happen frequently and I'm creating some training and want to highlight this one way or the other.
* The GFE is sent out but without a bank origination charge noted.
* The $1M loan is approved by the Loan Committee, but with a 1% origination charge.
* The HUD Line 801/GFE #1 now has a $10,000 variance in the GFE vs. HUD comparison section.
Is the decision to collect the origination fee at time of approval a "changed circumstance" so a revised GFE can go out showing that $10,000 charge increase ? I believe it should be because the collection requirement was not known when the GFE was sent out. We have this happen frequently and I'm creating some training and want to highlight this one way or the other.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/20/09 08:53 PM
Wow, a $1MM consumer loan. IMO that is not a changed circumstance. You should not issue the GFE without knowing t he costs. I realize that some loans (like a $1MM loan) just take time. You would just have to inform loan committee that charging that fee is not an option.
But in all seriousness. Do you really think you are going to charge a $10,000 origination fee?
But in all seriousness. Do you really think you are going to charge a $10,000 origination fee?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 10/20/09 09:06 PM
Originally Posted By: BLPage
Is the decision to collect the origination fee at time of approval a "changed circumstance" so a revised GFE can go out showing that $10,000 charge increase ? I believe it should be because the collection requirement was not known when the GFE was sent out. We have this happen frequently and I'm creating some training and want to highlight this one way or the other.
IMO, no, this would not fly.
You give a quote, customer feels it is the best and decides to go with you, then you tack on the fees and it may be too late for the customer to start over again, so they feel they have to finish financing with you.
This is exactly the type of event and upcharging that the regulations is trying to prevent from happening. Particular fees or either certain price points or loan amounts should be well documented for a lender to refer to and quote at the initial discussion with your client.
Posted By: Jan94
Re: RESPA changes 1-1-10 - 10/21/09 01:47 AM
We struggling with the "intent to proceed" requirement. Would appreciate anyone sharing how they are going to show this. We thought about creating a form that the lender would complete so we would have some sort of documentation but not excited about creating something else. Thank you.
Posted By: ahou
Re: RESPA changes 1-1-10 - 10/21/09 12:21 PM
We will give a notice at application that states something like 'If you wish to proceed with this application for credit, contact us at xxx or visit any office. We will need to collect the following fees at that time. [list of fees]'
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/21/09 12:29 PM
Originally Posted By: RR joker
Question to those of you who "keep" the YSP on above par loans...do you gather from a few of the Q&A's that this will no longer be happening? The only way I can see for it to possibly happen is if you place the part you intend to "keep" in origination charges, and the part, if any, you intend to credit the borrower in Block 2?
Bump...anyone?
Posted By: Sage
Re: RESPA changes 1-1-10 - 10/21/09 02:37 PM
Does paper size matter? The HUD site now has the HUD-1 as a legal size doc.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/21/09 02:54 PM
Originally Posted By: David Dickinson
I've been thinking about optional credit insurance and the GFE. I believe it goes on line 904 (if it's optional) of the HUD-1/1A. If you require it, it appears to go in the 1300 series (included in 1301 and itemized outside the borrower's column).
I now believe that it would not be listed on the GFE if it is not required by the lender. Appendix C of RESPA states to list items required in connection with the loan. Optional insurance doesn't meet this criteria.
As I think about this, many other fees come to mind that are not required for the loan (homeowners association dues, for instance). Read Q&A #9 in the HUD-1 General Section about surveys. There's 4 different answers depending on whether it is required and by whom. Specifically, look at Answer d.
I now believe that it would not be listed on the GFE if it is not required by the lender. Appendix C of RESPA states to list items required in connection with the loan. Optional insurance doesn't meet this criteria.
As I think about this, many other fees come to mind that are not required for the loan (homeowners association dues, for instance). Read Q&A #9 in the HUD-1 General Section about surveys. There's 4 different answers depending on whether it is required and by whom. Specifically, look at Answer d.
Okay, speaking of optional CL and Disab...and specifically as it applies to page 18, Question GFE-3. If a customer gets optional credit LIFE insurance (they say "credit insurance") and it is a PART OF the principal (not a separate monthly charge)...surely that would be part of the P&I you list, right? not the principal BEFORE Credit life is added...would that be reasonable?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/21/09 03:08 PM
Originally Posted By: CompDat
Dave can you help me understand this. I just went back and read the last two posts and your post states:
believe it goes on line 904 (if it's optional) of the HUD-1/1A. If you require it, it appears to go in the 1300 series (included in 1301 and itemized outside the borrower's column)
The way I read it, I would put it the other way around. I think I might be missing something.
believe it goes on line 904 (if it's optional) of the HUD-1/1A. If you require it, it appears to go in the 1300 series (included in 1301 and itemized outside the borrower's column)
The way I read it, I would put it the other way around. I think I might be missing something.
There's much confusion this topic. Appendix Z - line 904 states to list insurance "not required by the Lender". So that appears to be optional credit insurance. The 1300 series is used to list services the borrower can shop for - which sounds like insurance that is required. However, it could be credit insurance if the Lender requires it, but allows the borrower to choose the provider.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/21/09 08:37 PM
This is how we've interpreted optional credit life and it's how you read "required".
We have it in the 900 series, Items required by lender to be paid in advance. This does not say it's a requirement...it says it's required to be paid in advance.
Section 1300 are REQUIRED services...that you can shop for.
Optional Credit life is not required, thus would not fit that section.
We have it in the 900 series, Items required by lender to be paid in advance. This does not say it's a requirement...it says it's required to be paid in advance.
Section 1300 are REQUIRED services...that you can shop for.
Optional Credit life is not required, thus would not fit that section.
Posted By: Frank
Re: RESPA changes 1-1-10 - 10/21/09 09:02 PM
more on credit life... When we have credit life, it's loaded in the system by adding it to the balance, thus a regular monthly payment consisit of principal, interest, and credit life...in a roundabout way.
On page 1 of the GFE under "summary of your loan" the initial monthly amount owed for P&I, and any mtg insuranc........this amount would not be the true monthly payment if we have credit life as part of the loan. This is addressed in the HUD Q&A on pg 18 #3 on discretianary charges. So in the "escrow account information " you're supposed to disclose this same monthly amount per the Q&A....this seems like it would be deceiving to the consumer when you consider that the number is not the TRUE monthly payment.
It seems almost as if the GFE document does not account for credit life... How will others address credit life in a RESPA transaction?
On page 1 of the GFE under "summary of your loan" the initial monthly amount owed for P&I, and any mtg insuranc........this amount would not be the true monthly payment if we have credit life as part of the loan. This is addressed in the HUD Q&A on pg 18 #3 on discretianary charges. So in the "escrow account information " you're supposed to disclose this same monthly amount per the Q&A....this seems like it would be deceiving to the consumer when you consider that the number is not the TRUE monthly payment.
It seems almost as if the GFE document does not account for credit life... How will others address credit life in a RESPA transaction?
Posted By: Tigg
Re: RESPA changes 1-1-10 - 10/21/09 09:53 PM
I think (although I'm not sure I'm doing that very clearly these days!) that the idea of credit life is you would not know at application whether or not the consumer would want to purchase it. You would also not necessarily know that your customer would have escrows unless your bank escrows on all loans.
As for where to place credit life on the HUD, I have to agree with RR Joker. It makes sense to me.
Now, when I go to Jack H's seminar on Friday - these answers could all change!
As for where to place credit life on the HUD, I have to agree with RR Joker. It makes sense to me.
Now, when I go to Jack H's seminar on Friday - these answers could all change!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/21/09 09:56 PM
Originally Posted By: Go Hogs Go
On page 1 of the GFE under "summary of your loan" the initial monthly amount owed for P&I, and any mtg insuranc........this amount would not be the true monthly payment if we have credit life as part of the loan. This is addressed in the HUD Q&A on pg 18 #3 on discretianary charges. So in the "escrow account information " you're supposed to disclose this same monthly amount per the Q&A....this seems like it would be deceiving to the consumer when you consider that the number is not the TRUE monthly payment.
It seems almost as if the GFE document does not account for credit life... How will others address credit life in a RESPA transaction?
It seems almost as if the GFE document does not account for credit life... How will others address credit life in a RESPA transaction?
I agree. Th GFE does not tell them how much their PITI will be nor will it tell them how much their P& I plus credit insurance will be. HUD doesn't seem to care that the borrowers doesn't know what their monthly payment will be nor what to bring to closing (the GFE doesn't tell them either).
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/22/09 12:39 PM
I agree that many customer's may not request CL at time of application, so at that point, the P&I will be based on the principal...however, if I had a customer who came in and said...look, banker, I really want life insurance to cover this so my family isn't stuck...and I add it for them...I'm quite sure I will be quoting a P&I with CL (our's is also added to principal). If it was optional monthly, I would not.
I had a discussion with one of our closing attorney's yesterday and we are planning on getting together to discuss how they will lump their fees and I am drafting a letter to all of our listed attorneys so they can break things down for us...I mean come on...we have to be able to figure the title insurance, lender and owner, right, and know what all will be in their lumped fee, right?
In addition, I spoke with my compliance contact at FRB ATL yesterday...they will be "sorting it out as time goes by"...well...what can I say, it's not their regulation, after all! Anyway, he suggested that since they (attorney's) will have to lump their fees, FC as well as non-FC, that we use the itemization on the TIL or some itemization so that we don't have to count the entire lump in the APR...(of course, with Z's proposed changes, they may eventually all end up as FC's anyway...thus increasing HPML's and HOEPA loans as well...what a wonderful world!)
I had a discussion with one of our closing attorney's yesterday and we are planning on getting together to discuss how they will lump their fees and I am drafting a letter to all of our listed attorneys so they can break things down for us...I mean come on...we have to be able to figure the title insurance, lender and owner, right, and know what all will be in their lumped fee, right?
In addition, I spoke with my compliance contact at FRB ATL yesterday...they will be "sorting it out as time goes by"...well...what can I say, it's not their regulation, after all!
Anyway, he suggested that since they (attorney's) will have to lump their fees, FC as well as non-FC, that we use the itemization on the TIL or some itemization so that we don't have to count the entire lump in the APR...(of course, with Z's proposed changes, they may eventually all end up as FC's anyway...thus increasing HPML's and HOEPA loans as well...what a wonderful world!)
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 10/22/09 02:19 PM
The OTS will be hosting a conference call on 11/2 from 2 to 3:30 PM EST to discuss the RESPA rule. They will have some officials from HUD on the call. Here's a link to the information about the call.
http://www.ots.treas.gov/?p=Events&C...34-86a3226b50d5
The OTS has posted a sample completed GFE and a sample completed HUD-1 form on the page.
http://www.ots.treas.gov/?p=Events&C...34-86a3226b50d5
The OTS has posted a sample completed GFE and a sample completed HUD-1 form on the page.
Posted By: Tigg
Re: RESPA changes 1-1-10 - 10/22/09 03:33 PM
Originally Posted By: RR joker
This is how we've interpreted optional credit life and it's how you read "required".
We have it in the 900 series, Items required by lender to be paid in advance. This does not say it's a requirement...it says it's required to be paid in advance.
Section 1300 are REQUIRED services...that you can shop for.
Optional Credit life is not required, thus would not fit that section.
We have it in the 900 series, Items required by lender to be paid in advance. This does not say it's a requirement...it says it's required to be paid in advance.
Section 1300 are REQUIRED services...that you can shop for.
Optional Credit life is not required, thus would not fit that section.
Wait - What if the purchase of credit life is optional, but you only have one provider? (I guess you would call it a required provider.) Then it would still be in the 900 series, right?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/22/09 03:36 PM
You may only have one provider, but they can go outside the bank to obtain their own, right? If so..I wouldn't consider it a required provider. If you do that, you turn it into a FC for APR purposes...most allow "choices".
Posted By: AuditorK
Re: RESPA changes 1-1-10 - 10/22/09 03:39 PM
Does anyone know if this conference call open to financial institutions that are not credit unions?
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 10/22/09 04:47 PM
The NCUA regulates credit unions not the OTS. There does not seem to be a registration requirement for the call. The OTS provides a phone number and a participant passcode. I'm thinking anyone can listen to the call provided there are enough phone lines available for the call.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/22/09 05:25 PM
There's always other providers the borrower could choose. I agree it's still in the 900 series.
Posted By: Brooks1435
Re: RESPA changes 1-1-10 - 10/22/09 06:39 PM
We don't require services like pest inspections or surveys. However, some borrowers request a survey if the property is found to be in a flood zone. Some want a pest inspection but that is a service the seller would usually pay. My point is, since we don't require these, where would we list them on the GFE?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/22/09 06:53 PM
Well, HUD denied the request to "stay" the deadline. Full speed ahead, ya'll!
I'd post it, but I have a PDF copy and haven't looked at their site for it.
And Brooks, you don't...you'll put them on the HUD somewhere in the 1300 section.
I'd post it, but I have a PDF copy and haven't looked at their site for it.
And Brooks, you don't...you'll put them on the HUD somewhere in the 1300 section.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 10/22/09 07:32 PM
I have the same question...services that we don't require but usually the seller pays for, do we need to list on the GFE?
If we ahve a list of service providers, does it matter how many are on the list? Before we needed 5 but if we only have 2 it is okay and then if they don't pick them it is not considered a reqquired service?
If we ahve a list of service providers, does it matter how many are on the list? Before we needed 5 but if we only have 2 it is okay and then if they don't pick them it is not considered a reqquired service?
Posted By: Brooks1435
Re: RESPA changes 1-1-10 - 10/22/09 07:49 PM
On page 11 of the FAQs it says the settlement service providers list should contain providers that are likely available to provide the settlement service for the borrower. We have many branches spread out across the state. Should we compile a list specific to each branch? Could we compile a bank-wide list and seperate the providers by location? Do we have to retain a copy of the list in the loan file with the GFE?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/22/09 07:57 PM
Originally Posted By: ahkcompliance
I have the same question...services that we don't require but usually the seller pays for, do we need to list on the GFE?
If we ahve a list of service providers, does it matter how many are on the list? Before we needed 5 but if we only have 2 it is okay and then if they don't pick them it is not considered a reqquired service?
If we ahve a list of service providers, does it matter how many are on the list? Before we needed 5 but if we only have 2 it is okay and then if they don't pick them it is not considered a reqquired service?
There is no where to put services you don't require on the GFE...only the HUD seems to permit being able to include those charges in teh 1300 series (even though it say's "required services you can shop for)
HUD did not provide for any particular number of providers to be listed.
Having a list of providers and requiring the service are two different things. If you require it and you allow shopping, you HAVE to give a list of some number. If they don't pick from your list and use someone else, it removes that from your 10% tolerance limits. (this applies to blocks 4, 5, 6 of the GFE)
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/22/09 07:59 PM
Originally Posted By: Brooks1435
On page 11 of the FAQs it says the settlement service providers list should contain providers that are likely available to provide the settlement service for the borrower. We have many branches spread out across the state. Should we compile a list specific to each branch? Could we compile a bank-wide list and seperate the providers by location? Do we have to retain a copy of the list in the loan file with the GFE?
Yes, you need a market driven list (or at least include area service providers) according to HUD's opinions. Whether it's branch specific, or system-wide probably wouldn't matter. if they pick someone NOT on the list, I might want to include my list to prove it!
Posted By: Brooks1435
Re: RESPA changes 1-1-10 - 10/22/09 08:04 PM
Would a minimum finance charge be considered a prepayment penalty?
Posted By: AuditorK
Re: RESPA changes 1-1-10 - 10/22/09 08:27 PM
Originally Posted By: RR joker
Well, HUD denied the request to "stay" the deadline. Full speed ahead, ya'll!
I'd post it, but I have a PDF copy and haven't looked at their site for it.
I'd post it, but I have a PDF copy and haven't looked at their site for it.
I can't find anything on this. Can anyone help me find support for this? I'd like to show it to those here who believe the RESPA deadline will be postponed.
Nevermind, I just found it.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/22/09 08:47 PM
If you will pm you with an email address I'll send it to you...keep your fingers crossed it doesn't get caught up in our secure mail, but if it does, just go through the process to retieve it.
Didn't see your last sentence!
Didn't see your last sentence!
Posted By: Frank
Re: RESPA changes 1-1-10 - 10/22/09 09:40 PM
We (the bank) pays for the credit report(s), it is not charged to the customer.
So on the GFE the credit report fee would be shown in block 3.
On the HUD-1, per the FAQ page 29 Q#11, the credit report fee would be shown on line 805 with a corresponding credit on line 204-209, thereby eliminating the use of Hud 1A forms....
Have I got this right?
I've been messsing with this stuff alllll day. I've been in contact with a consumer compliance specialist at HUD and the info they're giving me directly contradicts what's in the FAQ...especially the parts about credit life....I'm going home.
So on the GFE the credit report fee would be shown in block 3.
On the HUD-1, per the FAQ page 29 Q#11, the credit report fee would be shown on line 805 with a corresponding credit on line 204-209, thereby eliminating the use of Hud 1A forms....
Have I got this right?
I've been messsing with this stuff alllll day. I've been in contact with a consumer compliance specialist at HUD and the info they're giving me directly contradicts what's in the FAQ...especially the parts about credit life....I'm going home.
Posted By: RVFlyboy
Re: RESPA changes 1-1-10 - 10/22/09 09:46 PM
Just saw a message from ABA - their request to HUD for a delay in RESPA effective date has been DENIED.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/22/09 09:59 PM
Originally Posted By: CessnaFlyboy
Just saw a message from ABA - their request to HUD for a delay in RESPA effective date has been DENIED.
Full steam ahead!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/22/09 10:04 PM
I have briefly reviewed the OTS completed forms and found a few errors and notable items:
Good Faith Estimate – page 1:
Dates #1 has a time. You can do this “if necessary” it states in Appendix C. The only time I see this happening is the applicant is sitting at the desk with the Loan Officer and they want to make sure they understand these rates can change quickly. If you mail it to an applicant, the time seems like a moot issue.
Good Faith Estimate – page 2:
Block 3 has 2 services per line. I think this is because they are limited on the expansion of the form at this time. I believe software will expand this block as necessary.
Block 5 – The borrower is paying 100% of the Owner’s Title Insurance. This is not “typical” in our area. Just a note of interest.
Block 7 – The borrower is paying 50% of the Transfer Tax. This is typically a seller’s fee.
Good Faith Estimate – page 3:
Shopping Chart. This doesn’t have to be completed, but if it is, it should be accurate. This information indicates there is no prepayment penalty. The first page of the Good Faith Estimate says there is a penalty.
HUD-1 – Page 1:
Block H – should have a phone number.
206 – shows a credit to the borrower for transfer taxes. Therefore, the borrower didn’t pay any of this fee (see line 1203 too).
HUD-1 – Page 2:
Line 801. Origination charge was 6,750. Now it’s reduced to 6,250. They bank fees must have come in at $500 less.
Line 802 should be a negative number.
Line 1007 has 2 negatives.
Line 1202 has both a Deed and Mortgage fee. I would think it would be one or the other.
1300’s: 1031 is the sum of 1302 and 1303. 1304 (home warranty) is something not required by the lender and therefore, not listed on the Good Faith Estimate. This fee is also not listed in the tolerance boxes on page 3. Everything else is. This is correctly completed.
HUD -1 – Page 3:
I don’t see anything wrong here. It would have been nice if they would have shown an example of being out of tolerance and shown us how to cure it.
-----------------------------------------------------------------
We are also offering a 2 hour webinar for BankersOnline on November 10, 2009. This may sound a little odd (what’s new from me?!) but I’m very excited about this training. We have put together a 100 page packet detailing line-by-line, how to complete the Good Faith Estimate, HUD-1 and HUD-1A. We have incorporated the RESPA Q&As into the regulation and provided numerous mathematical examples. We’ve taken snap shots of the disclosures and inserted them in the training packet. You’ll also get several Good Faith Estimate & HUD-1/1A examples completed under various scenarios.
The great thing about the BOL webinars is you get 30 days of unlimited playback so you can copy the material for all of your loan officers and have them listen to the training at their convenience (and over and over, if necessary!). You also get a written response to every question asked during and after the webinar. Click on this link for more information and to register for the Banker’s Compliance Consulting/BOL RESPA webinar:
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1253206816535
Good Faith Estimate – page 1:
Dates #1 has a time. You can do this “if necessary” it states in Appendix C. The only time I see this happening is the applicant is sitting at the desk with the Loan Officer and they want to make sure they understand these rates can change quickly. If you mail it to an applicant, the time seems like a moot issue.
Good Faith Estimate – page 2:
Block 3 has 2 services per line. I think this is because they are limited on the expansion of the form at this time. I believe software will expand this block as necessary.
Block 5 – The borrower is paying 100% of the Owner’s Title Insurance. This is not “typical” in our area. Just a note of interest.
Block 7 – The borrower is paying 50% of the Transfer Tax. This is typically a seller’s fee.
Good Faith Estimate – page 3:
Shopping Chart. This doesn’t have to be completed, but if it is, it should be accurate. This information indicates there is no prepayment penalty. The first page of the Good Faith Estimate says there is a penalty.
HUD-1 – Page 1:
Block H – should have a phone number.
206 – shows a credit to the borrower for transfer taxes. Therefore, the borrower didn’t pay any of this fee (see line 1203 too).
HUD-1 – Page 2:
Line 801. Origination charge was 6,750. Now it’s reduced to 6,250. They bank fees must have come in at $500 less.
Line 802 should be a negative number.
Line 1007 has 2 negatives.
Line 1202 has both a Deed and Mortgage fee. I would think it would be one or the other.
1300’s: 1031 is the sum of 1302 and 1303. 1304 (home warranty) is something not required by the lender and therefore, not listed on the Good Faith Estimate. This fee is also not listed in the tolerance boxes on page 3. Everything else is. This is correctly completed.
HUD -1 – Page 3:
I don’t see anything wrong here. It would have been nice if they would have shown an example of being out of tolerance and shown us how to cure it.
-----------------------------------------------------------------
We are also offering a 2 hour webinar for BankersOnline on November 10, 2009. This may sound a little odd (what’s new from me?!) but I’m very excited about this training. We have put together a 100 page packet detailing line-by-line, how to complete the Good Faith Estimate, HUD-1 and HUD-1A. We have incorporated the RESPA Q&As into the regulation and provided numerous mathematical examples. We’ve taken snap shots of the disclosures and inserted them in the training packet. You’ll also get several Good Faith Estimate & HUD-1/1A examples completed under various scenarios.
The great thing about the BOL webinars is you get 30 days of unlimited playback so you can copy the material for all of your loan officers and have them listen to the training at their convenience (and over and over, if necessary!). You also get a written response to every question asked during and after the webinar. Click on this link for more information and to register for the Banker’s Compliance Consulting/BOL RESPA webinar:
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1253206816535
Posted By: Tigg
Re: RESPA changes 1-1-10 - 10/22/09 10:25 PM
Thanks RRjoker and David for your help.
David I look forward to your expertise on escrows in December when you make your way down South!
David I look forward to your expertise on escrows in December when you make your way down South!
Posted By: Heather Lucas
Re: RESPA changes 1-1-10 - 10/22/09 11:07 PM
Does anyone have any idea on how we are going to calculate the deductible points to report on Form 1098 in box 2? The current instructions say that deductible points are an originaton fee or discount that is a percentage of the loan amount. However, the new form requires that we put our processing fees in with the origination fee and does not have a spot to state the percentage. So does this mean the borrower can no longer deduct origination fees?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/23/09 01:14 PM
David, did you also notice that the release fee (1202 on the HUD) is carried straight over, instead of moving up to 1201? Our WK forms black out that column and I believe it should be in 1201.
I also am not seeing two negatives in 1007...can you explain that further? I'm not sure why it's the same amount as one month's taxes unless that's a coincidence?
Just an observation: In the Q&A they show an example of how to show a tolerance. correction. Page 27
I also am not seeing two negatives in 1007...can you explain that further? I'm not sure why it's the same amount as one month's taxes unless that's a coincidence?
Just an observation: In the Q&A they show an example of how to show a tolerance. correction. Page 27
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/23/09 01:20 PM
Originally Posted By: Heather Lucas
Does anyone have any idea on how we are going to calculate the deductible points to report on Form 1098 in box 2? The current instructions say that deductible points are an originaton fee or discount that is a percentage of the loan amount. However, the new form requires that we put our processing fees in with the origination fee and does not have a spot to state the percentage. So does this mean the borrower can no longer deduct origination fees?
See the Q&A 10-7-09 page 33
Speaking of originations fees...for in-house loans where you charge a loan fee, but it's a set amount and not a percentage...should that be considered an "origination fee", or not...I'm wondering about 1098 reporting of that fee based on how you "define" it?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/23/09 02:19 PM
Originally Posted By: RR joker
David, did you also notice that the release fee (1202 on the HUD) is carried straight over, instead of moving up to 1201? Our WK forms black out that column and I believe it should be in 1201.
I didn't see that. Good point.
Quote:
I also am not seeing two negatives in 1007...can you explain that further? I'm not sure why it's the same amount as one month's taxes unless that's a coincidence?
Without knowing when the escrow items are paid, I can't calculate the adjustment. I assume it's just a coincidence.
Quote:
Just an observation: In the Q&A they show an example of how to show a tolerance. correction. Page 27
But they show a $0 tolerance item (transfer taxes). I'm still confused on how to show a cure for items for the 10% tolerance items. You don't own them 100% of the increase. Also, what if 3 fees are over and 2 are under but you are 11% over tolerance. How do you allocate the cure to one item like they show in the Q&A's? Do we need to pro-rate the cure? Do you assign it to one fee? Lots of questions on this.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/23/09 02:56 PM
I see what you mean. I'm wondering if you rebate down to a total of 10%...that would make logical sense...HA..did I just say "logical" regarding anything HUD?
(oh...and now I see the two minus signs...I was looking for double figures!
(oh...and now I see the two minus signs...I was looking for double figures!
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/23/09 03:17 PM
Well let me retract my observation regarding line 1202...the Q&A 10-22-09 line 1200 Q#5 shows it in the 1202 if paid by the seller. That's weird..borrower's charge moves us to 1201, but seller goes across on 1202.
Geesh!
Geesh!
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 10/23/09 03:34 PM
I have a question regarding the definition of "changed circumstances". In the definitions section "changed circumstances" is said to include "information particular to the borrower or transaction that was relied on in providing the GFE and that changes or is found to be inaccurate after the GFE has been provided. This may include information about: (and i'm inserting here just the ones i'm interested in) the amount of the loan......the estimated value of the property". Then it goes on to say that changed circumstances DO NOT include ".......an estimate of the value of the property (or) the mortgage loan amount sought........"....What am i missing here? That seems very contradictory to me.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/23/09 03:40 PM
Absolutely it looks like a contradictory. You'll find the same with the loan amount (they tell it can be a changed circumstance, but tell it isn't later).
I believe the point is these need to be "materially different" to be a changed circumstance. IOW, if the borrower tells you their house is worth $150,000 and the appraisal comes in at $151,000, that's probably not a changed circumstance. Also, if they say they want to borrow $100,000 and then they need $101,000, that's not a changed circumstance.
However, each of the examples I gave could be if it takes them to a different program. For instance, if you were lending exactly 80 LTV and the appraisal comes in $1,000 less then the estimate, this could bump them to a different program or at least they may not qualify for the 80% LTV program you were looking at.
There's lot so things like this in the RESPA rules.
I believe the point is these need to be "materially different" to be a changed circumstance. IOW, if the borrower tells you their house is worth $150,000 and the appraisal comes in at $151,000, that's probably not a changed circumstance. Also, if they say they want to borrow $100,000 and then they need $101,000, that's not a changed circumstance.
However, each of the examples I gave could be if it takes them to a different program. For instance, if you were lending exactly 80 LTV and the appraisal comes in $1,000 less then the estimate, this could bump them to a different program or at least they may not qualify for the 80% LTV program you were looking at.
There's lot so things like this in the RESPA rules.
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 10/23/09 03:51 PM
So we are left to interpret it however we interpret it? Or rather, however our examiners interpret it?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/23/09 04:21 PM
Good point.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/23/09 04:23 PM
I think they even basically state this...you have to decide and keep your ammo for proof of why you did what you did! LOL
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 10/23/09 04:27 PM
Thanks for your help on this.
Posted By: Heather Lucas
Re: RESPA changes 1-1-10 - 10/23/09 05:16 PM
Ok, so apparently HUD has never read the TILA. The only way for the borrower to know what affects their APR is to review the Itemization of Amount Financed, which BTW is not even required when a GFE is prepared. Ok, so the borrower does not receive any document at application (and possible at closing that shows how the APR is calculated, since this information is no longer displayed on the HUD). It also seems that the only purpose for the GFE and HUD is for the 5% of borrowers that actually compare lenders. It provides no information to the borrower as who is collecting the fee, if the lender or broker are retained the fee, what is included in the APR, etc. IT seems that HUD is accomodiating for 5% rather than the other 95%. STUPID!
It also seems that HUD has not reviewed the state laws either. Most state laws don't allow non-lenders, i.e. originators or borkers to charge an origination charge. Ok, so where do they put their fees? Does RESPA trump state law? It's interesting that HUD has made no effort to try and intergrate their forms to any other regulations.
It also seems that HUD has not reviewed the state laws either. Most state laws don't allow non-lenders, i.e. originators or borkers to charge an origination charge. Ok, so where do they put their fees? Does RESPA trump state law? It's interesting that HUD has made no effort to try and intergrate their forms to any other regulations.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 10/23/09 05:34 PM
David in your analysis of the OTS examples you said: It appears this is a purchase therefore there would be a deed and a mortgage to be filed. I think you're confusing a Deed of Trust which is another name for a Mortgage in some but not all states, with a Deed to the property.
By the way, Heather, I totally agree this is stupid and confusing and totally a knee-jerk reactionary move with no thought to the ramifications a/k/a typical government and your tax dollars at work.
Quote:
Line 1202 has both a Deed and Mortgage fee. I would think it would be one or the other.
By the way, Heather, I totally agree this is stupid and confusing and totally a knee-jerk reactionary move with no thought to the ramifications a/k/a typical government and your tax dollars at work.
Posted By: Heather Lucas
Re: RESPA changes 1-1-10 - 10/23/09 05:36 PM
On the new GFE we are suppose to list all fees regardless which party pays the fee and then "plug" the total seller paid on the front page of the HUD-1. Ok, so how do we assign the seller payment? i.e. which fees will be paid by the seller, because this will affect their TIL. The point of the TIL was to compare lenders as well. But two lenders could allocate the seller paid costs differently and come up with two very different TIL, so how does the borrower came these TIL? THe old GFE would have said which fees are PFC and which fees are indicated as seller paid so the borrower could see. However, the form makes no such designation. So three days from application,the borrower receives a TIL and a useless GFE will not explanation of how the TIL was derived. Ok, so do we need to start supplying an Itemization of Amount Financed at application? And then do we customize our Itemization to show which fees are paid by the seller, because now it does not that was the job of the GFE.
Is the federal reserve doing anything?
Is the federal reserve doing anything?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/23/09 05:46 PM
The ATL FRB suggested we supply an itemization even though you "don't have to" if providing a HUD.
Posted By: Bullseye
Re: RESPA changes 1-1-10 - 10/23/09 05:50 PM
Originally Posted By: RR joker
The ATL FRB suggested we supply an itemization even though you "don't have to" if providing a HUD.
Our local FDIC examiner suggested the same thing. We discussed how it was going to be difficult to determine what fees were included as a finance charge and which weren't when everything was lumped together. We also have state laws which are going to require a break-out of the fees so I think a separate itemization is what we are going to have to do somewhere in the file.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/23/09 05:52 PM
We are preparing a spreadsheet for the attorneys to fill out for FC determination purposes.
We will also breakdown OUR fees for the same purpose on our early and final input sheets.
We will also breakdown OUR fees for the same purpose on our early and final input sheets.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/23/09 06:23 PM
Originally Posted By: Heather Lucas
On the new GFE we are suppose to list all fees regardless which party pays the fee and then "plug" the total seller paid on the front page of the HUD-1. Ok, so how do we assign the seller payment? i.e. which fees will be paid by the seller, because this will affect their TIL. The point of the TIL was to compare lenders as well. But two lenders could allocate the seller paid costs differently and come up with two very different TIL, so how does the borrower came these TIL? THe old GFE would have said which fees are PFC and which fees are indicated as seller paid so the borrower could see. However, the form makes no such designation. So three days from application,the borrower receives a TIL and a useless GFE will not explanation of how the TIL was derived. Ok, so do we need to start supplying an Itemization of Amount Financed at application? And then do we customize our Itemization to show which fees are paid by the seller, because now it does not that was the job of the GFE.
Is the federal reserve doing anything?
Is the federal reserve doing anything?
The GFE and ETIL are two different laws. Although related, you will need to get your ETIL correct regardless of how the GFE is listed. On the GFE, you MUST list the seller paid costs as if the applicant will pay them. On the ETIL, you can allocate who will be the payor.
Posted By: Still Smiling
Re: RESPA changes 1-1-10 - 10/23/09 06:24 PM
Just thought I would mention the FAQ's were updated again as of 10/22/09.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 10/23/09 06:40 PM
We currently do not require a certain attorney to be used. We only idicated that teh be licensed in the state. Since we don't have a list of attorney's and it is an item they can shop for, would that be included in the 10% tolerance?
Posted By: Gotwood
Re: RESPA changes 1-1-10 - 10/23/09 06:44 PM
this post should be required reading for the examiners. better yet, ask them what to do in these specific circumstances. if they can't answer them, i'm guessing they will be willing to "work" with you as they will be just as confused. i'm actually sending this to some of my former colleagues at the fdic to let them know they had better brush up on the reg.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/23/09 07:15 PM
Gotwood...the examiner's are charged with enforcing another agencies law. They will cripple along to begin with and will look to us for help (how much you wanna bet, I'm pretty darn sure of it)
I believe they will go easy (unless blatant)until time has gone by enough to sort through some questionable issues.
ahk..if you require an attorney to be used...you will have to provide a list...how many you put on the list is up to you. If they choose one from your list, you have a 10% tolerance...if they go outside the list, you are safe!
I believe they will go easy (unless blatant)until time has gone by enough to sort through some questionable issues.
ahk..if you require an attorney to be used...you will have to provide a list...how many you put on the list is up to you. If they choose one from your list, you have a 10% tolerance...if they go outside the list, you are safe!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/23/09 07:19 PM
Originally Posted By: CompDat
The GFE and ETIL are two different laws. Although related, you will need to get your ETIL correct regardless of how the GFE is listed. On the GFE, you MUST list the seller paid costs as if the applicant will pay them. On the ETIL, you can allocate who will be the payor.
I disagree you list seller paid costs on the GFE. When I read the regulation I came that conclusion, but several Q&As (which seem to be caring more weight than the regulation) state to list fees the borrower "typically" pays for. For instance, I don't believe transfer taxes should be listed on the GFE as they are always paid by the seller. I also think you should only list 50% of the owner's title insurance as this is what is paid by the borrower 99.9% of the time. When you get the purchase agreement and it identifies something different, you have a changed circumstance and amend the GFE, if necessary.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/23/09 07:36 PM
Question 1 Page 9 (Seller Paid Items):
Q: If at the time a GFE is issued it is known that the seller will pay settlement charges typically paid by the borrower, how are the charges disclosed on the GFE?
A: All charges typically paid by the borrower must be disclosed on the GFE regardless of whether the charges will be paid for by the borrower, the seller, or other party.
Question 2 clarifies even more. I really think you need to list seller paid fees on the GFE. The reason I say this is because under what is "typical" is not contingent on who will pay them this loan. Thus even if you KNOW the seller will pay the fees, you should still list them. Notice in the answer it says, you MUST disclose the fees, regardless if the charges will be paid by the seller.
Q: If at the time a GFE is issued it is known that the seller will pay settlement charges typically paid by the borrower, how are the charges disclosed on the GFE?
A: All charges typically paid by the borrower must be disclosed on the GFE regardless of whether the charges will be paid for by the borrower, the seller, or other party.
Question 2 clarifies even more. I really think you need to list seller paid fees on the GFE. The reason I say this is because under what is "typical" is not contingent on who will pay them this loan. Thus even if you KNOW the seller will pay the fees, you should still list them. Notice in the answer it says, you MUST disclose the fees, regardless if the charges will be paid by the seller.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/23/09 07:40 PM
I want to clarify above. The definition of typical is not listed, but IMO typically was intended to mean, does the borrower pay for this fee, typically. I cannot think of any fee or charge in a secondary market transaction that would not be typically paid by the borrower. I can find countless evidence where charges have been paid by other parties, but that does not make it typical. I asked the OCC to opine once regarding the old rule. I had a very seasoned regulator (which I am sure you have dealt with since you're in my area - GO BIG RED) that told me, you should list fees on the GFE, if you do not know they will be charged, but they occur on >10% of loans. This to me, suggests that typical has little to do with the intent of a single loan, but of all the loans conducted in your geographic area. Thus, IMO seller paid fees must be listed regardless.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/23/09 07:47 PM
Originally Posted By: Still Smiling
Just thought I would mention the FAQ's were updated again as of 10/22/09.
I gave them a quick view: 2 Q&As on broker issued GFE and a ton on reverse mortgages.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/23/09 08:01 PM
We have the following under Transfer taxes:
Intagibles, GRMA, GA Transfer (purchase) and FL Doc Stamps.
I can't say that these are all typically paid by the seller. I think everyone has to see what is typically paid by the seller in a state-by-state situation, maybe?
Intagibles, GRMA, GA Transfer (purchase) and FL Doc Stamps.
I can't say that these are all typically paid by the seller. I think everyone has to see what is typically paid by the seller in a state-by-state situation, maybe?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/23/09 08:02 PM
Originally Posted By: CompDat
Question 1 Page 9 (Seller Paid Items):
Q: If at the time a GFE is issued it is known that the seller will pay settlement charges typically paid by the borrower, how are the charges disclosed on the GFE?
A: All charges typically paid by the borrower must be disclosed on the GFE regardless of whether the charges will be paid for by the borrower, the seller, or other party.
Question 2 clarifies even more. I really think you need to list seller paid fees on the GFE. The reason I say this is because under what is "typical" is not contingent on who will pay them this loan. Thus even if you KNOW the seller will pay the fees, you should still list them. Notice in the answer it says, you MUST disclose the fees, regardless if the charges will be paid by the seller.
Q: If at the time a GFE is issued it is known that the seller will pay settlement charges typically paid by the borrower, how are the charges disclosed on the GFE?
A: All charges typically paid by the borrower must be disclosed on the GFE regardless of whether the charges will be paid for by the borrower, the seller, or other party.
Question 2 clarifies even more. I really think you need to list seller paid fees on the GFE. The reason I say this is because under what is "typical" is not contingent on who will pay them this loan. Thus even if you KNOW the seller will pay the fees, you should still list them. Notice in the answer it says, you MUST disclose the fees, regardless if the charges will be paid by the seller.
All I can say is I disagree. If the seller doesn't typically pay transfer taxes or 100% of owner's title insurance (which is true in our are), then I recommend you not list them on the GFE. That's what the Q&As states, as you quoted. It doesn't say list all fee associated with the loan, no matter who typically pays for them.
I agree this is what the regulation implied, but the Q&As have clarified this not to be true.
For sure, there are a lot of questions like this still unanswered. Hopefully, we can get more guidance on this and other issues. You wouldn't wrong to list seller paid fees, but I don't think you need to. It also might put you at a competitive disadvantage when the applicant sees these large amounts to settle.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/23/09 08:11 PM
I hope so because I honestly believe that the term "typical" has little to nothing to do with "this loan" (hypathetical loan).
I once audited a mortgage place and came across a lender who never made more than a total of $10 in mistakes on the GFE. I asked her why and she said, that you can get a GFE exactly right if you just do your homework (and no she was not completing the GFE at close - I checked). So one day I was auditing her area and heard her making several calls. She was finding out exact charges for every fee before she completed the GFE.
When I spoke with the OCC examiner regarding fees that a borrower would normally pay (old rule: the lender shall provide all applicants for a federally related mortgage loan with a good faith estimate of the amount of or range of charges for the specific settlement services the borrower is likely to incur in connection with the settlement. )
We were discussing the fees for brokerage fees, title insurance, and a few other fees. She told me, the term likely does not mean 50%. It is more of a "could" statement. I did some statistical analysis of all loans and fees and we came to the conclusion, that to avoid RESPA violations, if your unsure about a fee, list it on the GFE (and that rhymes - perhaps I will use that in my training).
I once audited a mortgage place and came across a lender who never made more than a total of $10 in mistakes on the GFE. I asked her why and she said, that you can get a GFE exactly right if you just do your homework (and no she was not completing the GFE at close - I checked). So one day I was auditing her area and heard her making several calls. She was finding out exact charges for every fee before she completed the GFE.
When I spoke with the OCC examiner regarding fees that a borrower would normally pay (old rule: the lender shall provide all applicants for a federally related mortgage loan with a good faith estimate of the amount of or range of charges for the specific settlement services the borrower is likely to incur in connection with the settlement. )
We were discussing the fees for brokerage fees, title insurance, and a few other fees. She told me, the term likely does not mean 50%. It is more of a "could" statement. I did some statistical analysis of all loans and fees and we came to the conclusion, that to avoid RESPA violations, if your unsure about a fee, list it on the GFE (and that rhymes - perhaps I will use that in my training).
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 10/23/09 08:19 PM
Quote:
if your unsure about a fee, list it on the GFE (and that rhymes - perhaps I will use that in my training).
Cute, very cute. I may have to use that too. Of course, I give you all the credit.
Good discussion.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/23/09 08:24 PM
You know the more I read the question from page 9 I am starting to come to your side of the fence. However I think that the original poster was stating other fees, like in the case of seller paid fees for a VA loan. In a VA loan it is "typical" that a seller would pay the fees. However not exclusive.
I was not thinking of it in the case of owners title insurance or transfer taxes.
I guess here is where I see the line that is drawn by question 1. If you do a loan and a borrower will not be paying the fees, you know they will not be paying the fees, the borrower knows they will not be payin the fee and the seller will be paying the fee, I would list it on the GFE, if it is for fees that a borrower typically pays, origination fees, escrow amounts, title insurance and most other fees.
But in your two examples you may be right.
I was not thinking of it in the case of owners title insurance or transfer taxes.
I guess here is where I see the line that is drawn by question 1. If you do a loan and a borrower will not be paying the fees, you know they will not be paying the fees, the borrower knows they will not be payin the fee and the seller will be paying the fee, I would list it on the GFE, if it is for fees that a borrower typically pays, origination fees, escrow amounts, title insurance and most other fees.
But in your two examples you may be right.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/23/09 08:28 PM
haha..that is a good one!
I think this is being misinterpreted. It has nothing to do with what the contract says the seller will pay..it has everything to do with "typically paid SELLER fees"..not what the seller MIGHT pay for the borrower.
Many contract have the seller pay ALL fees...well boy couldn't THAT get taken advantage of!
My opinion is simply this and it goes with the catch phrase above. If it's not strictly a seller paid item, it should be on the GFE...otherwise I really hope folks can back up why they believe it is "typically" paid by the seller.
Quote:
Q: If at the time a GFE is issued it is known that the seller will pay settlement charges typically paid by the borrower, how are the charges disclosed on the GFE?
A: All charges typically paid by the borrower must be disclosed on the GFE regardless of whether the charges will be paid for by the borrower, the seller, or other party.
Question 2 clarifies even more. I really think you need to list seller paid fees on the GFE. The reason I say this is because under what is "typical" is not contingent on who will pay them this loan. Thus even if you KNOW the seller will pay the fees, you should still list them. Notice in the answer it says, you MUST disclose the fees, regardless if the charges will be paid by the seller.
A: All charges typically paid by the borrower must be disclosed on the GFE regardless of whether the charges will be paid for by the borrower, the seller, or other party.
Question 2 clarifies even more. I really think you need to list seller paid fees on the GFE. The reason I say this is because under what is "typical" is not contingent on who will pay them this loan. Thus even if you KNOW the seller will pay the fees, you should still list them. Notice in the answer it says, you MUST disclose the fees, regardless if the charges will be paid by the seller.
I think this is being misinterpreted. It has nothing to do with what the contract says the seller will pay..it has everything to do with "typically paid SELLER fees"..not what the seller MIGHT pay for the borrower.
Many contract have the seller pay ALL fees...well boy couldn't THAT get taken advantage of!
My opinion is simply this and it goes with the catch phrase above. If it's not strictly a seller paid item, it should be on the GFE...otherwise I really hope folks can back up why they believe it is "typically" paid by the seller.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/23/09 08:32 PM
RR, I am in agreement with you, however in the two situations where Dave explain, those charges are not typically paid by the borrower.
But on your behalf, if a lender makes a GFE and assumes something is seller paid and it is not, its a GFE violation and not something that constitutes a changed circumstance, if it is a fee that a borrower typically pays. For example, the situation I used with VA loans. If you make a GFE and don't include origination fees, you will be hard pressed to convince anyone that you were going to have the seller pay them and it was a changed circumstance. It is a fee that is typically paid by the borrower.
But on your behalf, if a lender makes a GFE and assumes something is seller paid and it is not, its a GFE violation and not something that constitutes a changed circumstance, if it is a fee that a borrower typically pays. For example, the situation I used with VA loans. If you make a GFE and don't include origination fees, you will be hard pressed to convince anyone that you were going to have the seller pay them and it was a changed circumstance. It is a fee that is typically paid by the borrower.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/23/09 08:39 PM
Yeah, I agree with that too...however, I posted something up above where we have several items that fit nowhere really but in the transfer tax section. They are not all typically paid by the seller, so I think it boils down to a state-by-state situation.
So, if you have a contract and it state seller will pay up to 4% in closing costs...are you all of the opinion you account for that, or disclose the fees even tho they will be absorbed by the seller. Be nice if the GFE had a seller-paid credit area on it!
So, if you have a contract and it state seller will pay up to 4% in closing costs...are you all of the opinion you account for that, or disclose the fees even tho they will be absorbed by the seller. Be nice if the GFE had a seller-paid credit area on it!
Posted By: pjs
Re: RESPA changes 1-1-10 - 10/24/09 03:25 PM
Originally Posted By: David Dickinson
-----------------------------------------------------------------
We are also offering a 2 hour webinar for BankersOnline on November 10, 2009. This may sound a little odd (what’s new from me?!) but I’m very excited about this training. We have put together a 100 page packet detailing line-by-line, how to complete the Good Faith Estimate, HUD-1 and HUD-1A. We have incorporated the RESPA Q&As into the regulation and provided numerous mathematical examples. We’ve taken snap shots of the disclosures and inserted them in the training packet. You’ll also get several Good Faith Estimate & HUD-1/1A examples completed under various scenarios.
The great thing about the BOL webinars is you get 30 days of unlimited playback so you can copy the material for all of your loan officers and have them listen to the training at their convenience (and over and over, if necessary!). You also get a written response to every question asked during and after the webinar. Click on this link for more information and to register for the Banker’s Compliance Consulting/BOL RESPA webinar:
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1253206816535
I'm excited that I got approval today and signed up for David's webinar.
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 10/25/09 03:32 PM
Not sure if everyone saw the 10/23/09 updated FAQ's
http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs.pdf
http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs.pdf
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 10/25/09 05:50 PM
They are really just toying with us for their own evil purposes now, aren't they???
I wish they would offer not only the updated version, but also just addendums to the FAQ's... they are not making this easy for note making and study purposes.
I wish they would offer not only the updated version, but also just addendums to the FAQ's... they are not making this easy for note making and study purposes.
Posted By: Tigg
Re: RESPA changes 1-1-10 - 10/26/09 11:25 AM
I was at a seminar Friday (Thanks Jack - great job) and just want to clarify somethings.
If, in a purchase transaction, you typically have the closing attorney prepare the HUD-1 is the fee considered an "origination fee"?
What else can be construed as an "origination fee" that might not come immediately to mind?
I'm really afraid of getting this part wrong - and it has the ZERO tolerance attached to it...
If, in a purchase transaction, you typically have the closing attorney prepare the HUD-1 is the fee considered an "origination fee"?
What else can be construed as an "origination fee" that might not come immediately to mind?
I'm really afraid of getting this part wrong - and it has the ZERO tolerance attached to it...
Posted By: pjs
Re: RESPA changes 1-1-10 - 10/26/09 11:47 AM
Tigg- I've never seen an attorney fee preparing the HUD-1 as a origination fee. The origination fee as I understand it is a fee for processing the loan application.
I believe the origination fee has nothing to do with an attorney or title company preparing a HUD-1 settlement statment.
I believe the origination fee has nothing to do with an attorney or title company preparing a HUD-1 settlement statment.
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 10/26/09 11:50 AM
But this is where my confusion comes in.
Let's talk about the survey. We do not require a survey - however we will not accept an exception on the title policy for matters of survey. In most cases, this is handled by the ALTA 9 but there are times where the title company wants a survey. From what I've been reading, even if I think that a survey will be required, I need to put it on the GFE. I don't hire surveyors (or termite companies) so I don't have names but I have to put it on my preferred providers checklist???
Let's talk about the survey. We do not require a survey - however we will not accept an exception on the title policy for matters of survey. In most cases, this is handled by the ALTA 9 but there are times where the title company wants a survey. From what I've been reading, even if I think that a survey will be required, I need to put it on the GFE. I don't hire surveyors (or termite companies) so I don't have names but I have to put it on my preferred providers checklist???
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/26/09 01:05 PM
Originally Posted By: respa queen
From what I've been reading, even if I think that a survey will be required, I need to put it on the GFE.
I don't think that would be a bad idea, but it would not be required. However, if it turns out the property would need a survey, I don't believe this qualifies as a changed circumstance and in all likelihood you will be eating some form of the survey anyway.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/26/09 01:07 PM
Originally Posted By: pjs
Tigg- I've never seen an attorney fee preparing the HUD-1 as a origination fee. The origination fee as I understand it is a fee for processing the loan application.
I believe the origination fee has nothing to do with an attorney or title company preparing a HUD-1 settlement statment.
I believe the origination fee has nothing to do with an attorney or title company preparing a HUD-1 settlement statment.
That is true, however the new Q&As state that you must put the fees in the right bucket. The example they give is, you either pay the attorney to do the papers for closing or settlement. If it is for closing and you pass it on to the borrower, its an origination fee. If it is for settlement and you pass it on to the borrower, its a title fee.
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 10/26/09 01:18 PM
Would you be willing to share?
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/26/09 01:31 PM
Im not sure I follow.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/26/09 01:35 PM
The attorney can't charge for preparing the HUD 1/TIL, however he could be charging for other bank-related preparation. The best thing to do is instruct your attorney how to charge or have him/her fill out a sheet of how they WILL charge and use that for your estimates.
As far as a survey for unknown title problems? That should fit neatly into "changed circumstances".
If you require their service then you must give a list...no minimum required number has been stated, but you must have it for those items contained in blocks 4, 5 and 6.
As far as a survey for unknown title problems? That should fit neatly into "changed circumstances".
Quote:
I don't hire surveyors (or termite companies) so I don't have names but I have to put it on my preferred providers checklist???
If you require their service then you must give a list...no minimum required number has been stated, but you must have it for those items contained in blocks 4, 5 and 6.
Posted By: MarieR
Re: RESPA changes 1-1-10 - 10/26/09 02:47 PM
In regards to the attorney fees - we have some attorneys that break out their fee neatly for us to pull the doc prep out (for exhibit and/or deed) and some that just have one fee for prepared exhibit for mortgage and title opinion. Do I need to have the fee broken out by the attorney (I think yes) or can I just group it with title services since it is one fee? I think I know the answer, but don't want the attorney battle.
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 10/26/09 03:19 PM
He said he was working on a spreadsheet to find out what the various charges are from attorneys
Posted By: wdt
Re: RESPA changes 1-1-10 - 10/26/09 03:40 PM
Originally Posted By: David Dickinson
Originally Posted By: ahkcompliance
Am I correct that a new GFE cannot be issued if we know a fee has changed in the process and that we must wait until closing and see if 10% tolerance and if so, reimburse the fee. What happens if you underestimate.
But if we uinderestimate an actual charge, we do not have to re-dosclose, isn't that correct?
There are many "changed circumstances" that will allow you to re-issue a GFE. If you get to closing and are outside of tolerance, you need to cure the violation by "eating" the difference between the overage and the tolerance limit. You must also issue a new Settlement Statement showing the correction.
We will be discussing this (and more) in our upcoming webinar where we discuss how to complete the GFE & SS line by line. You can find more info here:
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1253206816535
Posted By: Still Smiling
Re: RESPA changes 1-1-10 - 10/26/09 04:13 PM
Can anyone tell me where an advance mortgage release fee would be on the GFE?
Posted By: Tigg
Re: RESPA changes 1-1-10 - 10/26/09 05:24 PM
Originally Posted By: RR joker
If you require their service then you must give a list...no minimum required number has been stated, but you must have it for those items contained in blocks 4, 5 and 6.
The first thing that came to my mind when I read this was:
If you insist...you must have a list!
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 10/26/09 06:28 PM
I like that!
Posted By: Mary Beth Guard
Re: RESPA changes 1-1-10 - 10/26/09 06:43 PM
Originally Posted By: OldSchoolBanker
Not sure if everyone saw the 10/23/09 updated FAQ's
http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs.pdf
http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs.pdf
Want to see just the 10/23 changes? Me, too! Here they are, all by themselves:
http://www.bankersonline.com/lending/lending_hudfaq.html
Posted By: starfish
Re: RESPA changes 1-1-10 - 10/26/09 07:05 PM
Our Mortgage Department received notification from a title company that effective immediately, they would be using the average charge pricing under the new RESPA rules for government recording fees. They told us we have no option but to begin doing this immediately. My concern is that the bank is the one responsible for RESPA accuracy when the examiners are here. How do I know that the title company used the correct method to establish the average charge? Also, it would seem that every title company should be using the same average charge if this is the case because it's government recording fees. The average charge they came up with for residential refinances is $93.00 and residential purchase is $153.00. In a quick review of recent refinances, the price is typically $60.00 or under. The title company states that they will no longer charge for addtional recorded documents such as quit claim deeds, power or attorney recording or subordination recording fees. However, most of our transactions do not include these fees. Also, subordination recording fees are a finance charge so how will I be able to comply with Reg Z if they lump all of this together as an average charge? I'm hoping some others have insight into what their local title companies are doing.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/26/09 07:19 PM
Are they supplying you with the, what is it...6 months evidence of how they arrived at the fee and on-going compliance? What a mess! If they lump fc and non fc fees together you won't have much choice but to include the entire amount as a fc, I'm afraid.
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 10/26/09 07:51 PM
So last week HUD emphatically denies the request for a delay in the effective date of the RESPA changes, stating that the industry will have had 14 months in which to prepare, which should be adequate time.
The same day they post additional FAQs on the changes! I hope 14 months will be adequate time for HUD. In the last answer of the 10-07-09 FAQs, they indicate they have not yet revised the Settlement Cost Booklet. Any guesses on how soon before January 1 this will be available?
The same day they post additional FAQs on the changes! I hope 14 months will be adequate time for HUD. In the last answer of the 10-07-09 FAQs, they indicate they have not yet revised the Settlement Cost Booklet. Any guesses on how soon before January 1 this will be available?
Posted By: MarieR
Re: RESPA changes 1-1-10 - 10/26/09 07:58 PM
Thank you Mary Beth for just the "new" FAQs, much easier to keep up with.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/26/09 08:01 PM
You partly can't blame HUD on the FAQ's...questions are still rolling in to be answered. They could just say...figure it out for yourself!
I think the bigger problem is there have been so many changes that we are all having to take them in order of effective date so the opportunity to develop questions sooner just didn't happen.
I think the bigger problem is there have been so many changes that we are all having to take them in order of effective date so the opportunity to develop questions sooner just didn't happen.
Posted By: pjs
Re: RESPA changes 1-1-10 - 10/26/09 08:02 PM
Originally Posted By: Sinatra Fan
So last week HUD emphatically denies the request for a delay in the effective date of the RESPA changes, stating that the industry will have had 14 months in which to prepare, which should be adequate time.
The same day they post additional FAQs on the changes! I hope 14 months will be adequate time for HUD. In the last answer of the 10-07-09 FAQs, they indicate they have not yet revised the Settlement Cost Booklet. Any guesses on how soon before January 1 this will be available?
The same day they post additional FAQs on the changes! I hope 14 months will be adequate time for HUD. In the last answer of the 10-07-09 FAQs, they indicate they have not yet revised the Settlement Cost Booklet. Any guesses on how soon before January 1 this will be available?
I don't know. HUD told us to call back the first week of January 2010 to check if the booklets were updated by then.
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 10/26/09 08:05 PM
What??? So, if that timeline is correct, we will be handing out old booklets with new GFE's, and neither will bear much relationship to the other.
Posted By: pjs
Re: RESPA changes 1-1-10 - 10/26/09 08:06 PM
Yeppers, I couldn't even pre-order the new booklets.
Posted By: Still Smiling
Re: RESPA changes 1-1-10 - 10/26/09 09:06 PM
Originally Posted By: Still Smiling
Can anyone tell me where an advance mortgage release fee would be on the GFE?
Anyone?
Posted By: Will B
Re: RESPA changes 1-1-10 - 10/26/09 09:29 PM
If FHA requires an inspection of the septic system, etc, would the inspection be a lender required settlement service? FHA isn't really the lender or originator, but the lender wouldn't grant the loan under these terms if FHA refuses to insure it. If it is a lender required settlement service, should we consider this a changed circumstance and issue a revised GFE showing this in section #6? (assuming the borrower can select the inspector).
Then, if the inspector identifies that repair work is needed, how should we handle the cost of the repair work on the GFE and HUD-1?
Then, if the inspector identifies that repair work is needed, how should we handle the cost of the repair work on the GFE and HUD-1?
Posted By: Sound Tactic
Re: RESPA changes 1-1-10 - 10/27/09 12:28 AM
Originally Posted By: starfish
Our Mortgage Department received notification from a title company that effective immediately, they would be using the average charge pricing under the new RESPA rules for government recording fees. They told us we have no option but to begin doing this immediately. My concern is that the bank is the one responsible for RESPA accuracy when the examiners are here. How do I know that the title company used the correct method to establish the average charge? Also, it would seem that every title company should be using the same average charge if this is the case because it's government recording fees. The average charge they came up with for residential refinances is $93.00 and residential purchase is $153.00. In a quick review of recent refinances, the price is typically $60.00 or under. The title company states that they will no longer charge for addtional recorded documents such as quit claim deeds, power or attorney recording or subordination recording fees. However, most of our transactions do not include these fees. Also, subordination recording fees are a finance charge so how will I be able to comply with Reg Z if they lump all of this together as an average charge? I'm hoping some others have insight into what their local title companies are doing.
Well you are still able to come up with your own GFE and assign the charge that you think will best represent the loan. IMO the title company might just be doing it to help you out. I see this as a good thing and it might help you better analyze the expected price of recording fees. If you contact the title company and they say it will cost $17, but you think it will cost $25, then by all means, put $25 on the GFE. So long as your estimate is in good faith, I don't see an issue.
On the other hand if you guess low, you may be curing it.
Posted By: Tigg
Re: RESPA changes 1-1-10 - 10/27/09 11:37 AM
Originally Posted By: pjs
Yeppers, I couldn't even pre-order the new booklets.
Great.....
Posted By: dottiec
Re: RESPA changes 1-1-10 - 10/27/09 02:03 PM
For a junior lien home equity loan we do not require title insurance. We contract with a company (not a title company) to perform a records search for deed and mortgage information. The applicant has no choice in who provides the service.
Is this a Block #3- Required Service or a Block #4- Title Service.
Also, what line on the HUD-1A should it be placed on?
Thanks.
Is this a Block #3- Required Service or a Block #4- Title Service.
Also, what line on the HUD-1A should it be placed on?
Thanks.
Posted By: SUSANE1
Re: RESPA changes 1-1-10 - 10/27/09 03:01 PM
Has anyone come up with a CHECKLIST of sorts to use???
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 10/27/09 03:09 PM
dottiec, I'd say it's a title service and it goes on line 1103 on the HUD.
Posted By: MarieR
Re: RESPA changes 1-1-10 - 10/27/09 03:30 PM
Originally Posted By: MarieR
In regards to the attorney fees - we have some attorneys that break out their fee neatly for us to pull the doc prep out (for exhibit and/or deed) and some that just have one fee for prepared exhibit for mortgage and title opinion. Do I need to have the fee broken out by the attorney (I think yes) or can I just group it with title services since it is one fee? I think I know the answer, but don't want the attorney battle.
Can I add another question?
Currently our attorney fee is grouped and the doc prep is only a small portion so we do not use it as part of the finance charge. Am I correct in that since we have to break the fee out the doc prep fee that on the HUD it will also be part of line 801 and a finance charge or can we still exclude it from the finance charge? I am so confused anymore!!!
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/27/09 05:51 PM
Originally Posted By: Still Smiling
Originally Posted By: Still Smiling
Can anyone tell me where an advance mortgage release fee would be on the GFE?
Anyone?
That question was presented to me a few days ago. I've decided that it shouldn't be charged on a RESPA-related loan...what is my reasoning? You may or may not use that fee, so isn't that like an "unearned fee or upcharging" of sorts? We've requested dismissal of that fee as a cost of doing business...because you may or may not ever use it.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 10/27/09 05:53 PM
Originally Posted By: Will B
If FHA requires an inspection of the septic system, etc, would the inspection be a lender required settlement service? FHA isn't really the lender or originator, but the lender wouldn't grant the loan under these terms if FHA refuses to insure it. If it is a lender required settlement service, should we consider this a changed circumstance and issue a revised GFE showing this in section #6? (assuming the borrower can select the inspector).
Then, if the inspector identifies that repair work is needed, how should we handle the cost of the repair work on the GFE and HUD-1?
Then, if the inspector identifies that repair work is needed, how should we handle the cost of the repair work on the GFE and HUD-1?
Maybe things have changed, but when I was an originator and a well or septic was involved, a Health Inspections was always required. I would call that a required service and at least in this part of the county is done by the Health Department...is it now something that may or may NOT be required?
If that's the case and you couldn't possibly know up front, I'd say it could consitute a changed circumtance. If it's still like I remember it, it would not be.
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 10/27/09 09:15 PM
Not sure if this has been discussed previously as I could not locate any links.
Regarding a NO CLOSING COST LOAN, where the bank pays all closing costs:
The FAQ's indicate to show a GFE credit on line 2 which creates a credit in Block A. My question is what do we do as a lender when the following occurs?
1) The actual closing costs are less than the credit from the GFE Block A? The HUD-1 FAQ instructions are to carryover Block A to the HUD-1, which means the borrower could receive cash back on a No Closing Cost loan.
2) The actual closing costs are higher than the credit from the GFE Block A? Obviously the bank would intend to pay the closing costs that exceed the GFE Block A estimate. How is that reconciled on the HUD-1?
Thanks for your input in advance!
Regards,
Regarding a NO CLOSING COST LOAN, where the bank pays all closing costs:
The FAQ's indicate to show a GFE credit on line 2 which creates a credit in Block A. My question is what do we do as a lender when the following occurs?
1) The actual closing costs are less than the credit from the GFE Block A? The HUD-1 FAQ instructions are to carryover Block A to the HUD-1, which means the borrower could receive cash back on a No Closing Cost loan.
2) The actual closing costs are higher than the credit from the GFE Block A? Obviously the bank would intend to pay the closing costs that exceed the GFE Block A estimate. How is that reconciled on the HUD-1?
Thanks for your input in advance!
Regards,
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/27/09 10:39 PM
Originally Posted By: OldSchoolBanker
Not sure if this has been discussed previously as I could not locate any links.
Regarding a NO CLOSING COST LOAN, where the bank pays all closing costs:
The FAQ's indicate to show a GFE credit on line 2 which creates a credit in Block A. My question is what do we do as a lender when the following occurs?
1) The actual closing costs are less than the credit from the GFE Block A? The HUD-1 FAQ instructions are to carryover Block A to the HUD-1, which means the borrower could receive cash back on a No Closing Cost loan.
2) The actual closing costs are higher than the credit from the GFE Block A? Obviously the bank would intend to pay the closing costs that exceed the GFE Block A estimate. How is that reconciled on the HUD-1?
Thanks for your input in advance!
Regards,
Regarding a NO CLOSING COST LOAN, where the bank pays all closing costs:
The FAQ's indicate to show a GFE credit on line 2 which creates a credit in Block A. My question is what do we do as a lender when the following occurs?
1) The actual closing costs are less than the credit from the GFE Block A? The HUD-1 FAQ instructions are to carryover Block A to the HUD-1, which means the borrower could receive cash back on a No Closing Cost loan.
2) The actual closing costs are higher than the credit from the GFE Block A? Obviously the bank would intend to pay the closing costs that exceed the GFE Block A estimate. How is that reconciled on the HUD-1?
Thanks for your input in advance!
Regards,
Maybe you can help me here and perhaps I can help. This is a no closing cost loan. Your not charging any origination fee. So, how can the Block A from the GFE exceed block a on the HUD?
Perhaps I am confused. If so let me know and we can figure it out.
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 10/28/09 10:42 AM
CompDat, thanks for your question on my original posting.
You are correct there is no origination fee but there still can be third party fees which the bank intends to pay on behalf of the borrower (title, appraisal etc).
In reading FAQ #1 on page 21 of the 10/23/09 FAQ, we are instructed to insert a credit into Block 2 for the amount of to offset all third party fees, which passes a credit to Block A. The lender is then held to a zero tolerance on the amount of that credit.
Does this help clarify the question?
Thanks
You are correct there is no origination fee but there still can be third party fees which the bank intends to pay on behalf of the borrower (title, appraisal etc).
In reading FAQ #1 on page 21 of the 10/23/09 FAQ, we are instructed to insert a credit into Block 2 for the amount of to offset all third party fees, which passes a credit to Block A. The lender is then held to a zero tolerance on the amount of that credit.
Does this help clarify the question?
Thanks
Posted By: CompDat
Re: RESPA changes 1-1-10 - 10/28/09 01:49 PM
Originally Posted By: OldSchoolBanker
CompDat, thanks for your question on my original posting.
You are correct there is no origination fee but there still can be third party fees which the bank intends to pay on behalf of the borrower (title, appraisal etc).
In reading FAQ #1 on page 21 of the 10/23/09 FAQ, we are instructed to insert a credit into Block 2 for the amount of to offset all third party fees, which passes a credit to Block A. The lender is then held to a zero tolerance on the amount of that credit. Then, I would change the credit to be higher on the GFE, so that there would be no difference net of the items that cannot change (I am pretty sure this is wrong but right now I don't know how to do it).
Does this help clarify the question?
Thanks
You are correct there is no origination fee but there still can be third party fees which the bank intends to pay on behalf of the borrower (title, appraisal etc).
In reading FAQ #1 on page 21 of the 10/23/09 FAQ, we are instructed to insert a credit into Block 2 for the amount of to offset all third party fees, which passes a credit to Block A. The lender is then held to a zero tolerance on the amount of that credit. Then, I would change the credit to be higher on the GFE, so that there would be no difference net of the items that cannot change (I am pretty sure this is wrong but right now I don't know how to do it).
Does this help clarify the question?
Thanks
OK lets talk through this. I admit fully that I do not know the answer and this one is stumping me. But here is how I would do it until I find out if this is correct or not. Since line 2 caries directly to the GFE, but your going to eat additional costs anyway, you could still bring line 2 over, and make a "cure" to cover the rest. I say this because, you really did not intend for your borrower to pay any of the costs. Some of the costs just came in higher. Thus, you would fill out a HUD-1 in this case, and make the adjusting entry to line 1206 and show it as a negative on page 1 in the 200 series.
If it comes in lower, then I have no idea what to do, but I am not sure that it matters if there is a net negative balance in the "items that cannot change" box.
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 10/28/09 06:58 PM
Originally Posted By: David Dickinson
Originally Posted By: Busy body
Does this mean that we are held to the original GFE unless there are other changed circumstances? Or can it be stretched to mean that since we didn't have an application in the first place, changed circumstance does not apply. We issue GFEs for prequals and the lenders here are not ready to give it up. Thanks!
If you issue a GFE, you are bound by it. If there is a changed circumstance, you can change the fees ONLY affected by the change.
I think your lenders will want to stop issuing GFE's on prequals. They could issue another type of info sheet, but if they issue a GFE, they are "stuck" with it.
I just want to bring this issue up again. We have a program where the customers can apply online for their mortgage loan (Mortgagebot), and oftentimes they put "TBD" on the street name, then they will put a city and state. This online application (as required) automatically generates all of the disclosures including the GFE. This is frustrating.
Posted By: MarieR
Re: RESPA changes 1-1-10 - 10/28/09 07:19 PM
Attorney fees question- in the FAQ's it says that attorney fees for preparing loan documents is considered part of the orgination fee in block 1. Would the preperation of an exhibit to go with the mortgage or prep of the deed count? Or are they refering to items like the note, security agreement, etc? Thanks
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 10/28/09 07:26 PM
Originally Posted By: FlamingoGal
Originally Posted By: David Dickinson
Originally Posted By: Busy body
Does this mean that we are held to the original GFE unless there are other changed circumstances? Or can it be stretched to mean that since we didn't have an application in the first place, changed circumstance does not apply. We issue GFEs for prequals and the lenders here are not ready to give it up. Thanks!
If you issue a GFE, you are bound by it. If there is a changed circumstance, you can change the fees ONLY affected by the change.
I think your lenders will want to stop issuing GFE's on prequals. They could issue another type of info sheet, but if they issue a GFE, they are "stuck" with it.
I just want to bring this issue up again. We have a program where the customers can apply online for their mortgage loan (Mortgagebot), and oftentimes they put "TBD" on the street name, then they will put a city and state. This online application (as required) automatically generates all of the disclosures including the GFE. This is frustrating.
I would check with Mortgagebot. It would seem to me that they will be forced to make changes to their program to comply with the Jan 2010 RESPA changes.
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 10/28/09 07:33 PM
Originally Posted By: MarieR
Attorney fees question- in the FAQ's it says that attorney fees for preparing loan documents is considered part of the orgination fee in block 1. Would the preperation of an exhibit to go with the mortgage or prep of the deed count? Or are they refering to items like the note, security agreement, etc? Thanks
The FAQ states "sttorney's fees charge to prepare loan documents for the lender" are included here. I would take that to mean any documents that the lender requires in order to complete the loan transaction.
I'm wondering about fees for an attorney to review the documents. My best guess would be to put that in Block 3 (although now I'm thinking that Block 4 might be more appropriate, since that might be construed as a "title service").
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 10/28/09 08:22 PM
My thought was - if it goes into your pocket, Block 3. If it goes into an attorney's pocket, Block 4
Posted By: Jan94
Re: RESPA changes 1-1-10 - 10/28/09 09:02 PM
On the HUD-1 line 1107 for flood certification fee, is this just for the life of loan fee or would it also include the charge for the determination? We thought the LOL would go in 1107 and we'd use a separate line for the determination fee. They would both go in box 3 of the GFE. Anyone see that differently? Thank you!
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 10/28/09 09:40 PM
Yes, thank you - we just found out from Mortgagebot that we can turn off the disclosures on prequals. It's frustrating, though, as our customers seem to expect to get TILs and GFEs on prequals - it's one of the reasons they come to us before they find the property - not just to get prequalified, but to see what the fees potentially will be. So, although not required, we have given earlies on prequals, then we just give new ones when the circumstances change such as finding a property. This is just one of those changes that is not going to be seen as a benefit by our customers (we are working on an alternative to the GFE that we can create and give them that will still give them a break down of fees and just not call it a GFE or have it look like the GFE). We think our way gives better customer service than the new RESPA way.
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 10/29/09 11:52 AM
You are correct. The reason it was split (I'm assuming) is to properly calculate the FC - but they would be "lumped" together in Block 3 of the new GFE
Posted By: ahou
Re: RESPA changes 1-1-10 - 10/29/09 12:04 PM
Originally Posted By: Sinatra Fan
Originally Posted By: MarieR
Attorney fees question- in the FAQ's it says that attorney fees for preparing loan documents is considered part of the orgination fee in block 1. Would the preperation of an exhibit to go with the mortgage or prep of the deed count? Or are they refering to items like the note, security agreement, etc? Thanks
The FAQ states "sttorney's fees charge to prepare loan documents for the lender" are included here. I would take that to mean any documents that the lender requires in order to complete the loan transaction.
I'm wondering about fees for an attorney to review the documents. My best guess would be to put that in Block 3 (although now I'm thinking that Block 4 might be more appropriate, since that might be construed as a "title service").
I was told in a recent seminar that attorney's fees for preparing loan docs for the lender go in block 1. (fees that all loan originators will receive) A closing fee charged by the attorney to conduct the closing (service fee) goes in block 4.
Posted By: etm614
Re: RESPA changes 1-1-10 - 10/30/09 04:40 PM
I have the same questions asked above about no closing coast loans as we also pay the closing costs on home equity loans. It seems as though having to put the credit so that it ends up on Line A eliminates the 10% variance and changed circumstance rules that apply would otherwise apply to the fees that comprise that credit. We sometimes encounter situations in which recording and attorney fees are higher due to an undisclosed lien.
I have already signed up for the webinar on 11/10 and hope that one of the gurus can weigh in with their interpretation.
I have already signed up for the webinar on 11/10 and hope that one of the gurus can weigh in with their interpretation.
Posted By: NanciT
Re: RESPA changes 1-1-10 - 10/30/09 05:45 PM
Is it possible to hold the mortgage broker responsible for fees that are understated on the GFE which then fall outside the 10% tolerance on the HUD-1? If the broker is just plain wrong about the fee, the lender accepts the GFE and there is no subsequent changed circumstances that allow reissuance of the GFE, is the lender left holding the bag? The following FAQ seems to indicate that the lender cannot deduct the "mistake" from the broker's compensation but perhaps someone has a way around this? I appreciate anyone's input!!!
6) Q: If a loan originator pressures a settlement agent to reduce their charges or to ‗cover the difference‘ to bring the costs into compliance with the tolerances, is that considered a violation of RESPA Section 8(a)?
A: If a loan originator (or other settlement service provider) pressures a settlement agent (or other settlement service provider) to reduce their charges or otherwise ‗cover the difference‘ to bring the costs into compliance with the tolerances as a condition of receiving future referrals of business, it may be considered a potential violation of RESPA Section 8(a). Please contact the Office of RESPA and ILS to file a complaint.
6) Q: If a loan originator pressures a settlement agent to reduce their charges or to ‗cover the difference‘ to bring the costs into compliance with the tolerances, is that considered a violation of RESPA Section 8(a)?
A: If a loan originator (or other settlement service provider) pressures a settlement agent (or other settlement service provider) to reduce their charges or otherwise ‗cover the difference‘ to bring the costs into compliance with the tolerances as a condition of receiving future referrals of business, it may be considered a potential violation of RESPA Section 8(a). Please contact the Office of RESPA and ILS to file a complaint.
Posted By: Gotwood
Re: RESPA changes 1-1-10 - 10/30/09 05:52 PM
I don't see a way around this, even if you have a separate agreement w/ the broker that they are responsible for inaccuries on documents.
Just one of many real scenarios we will be facing come January 1st.
Just one of many real scenarios we will be facing come January 1st.
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 10/30/09 07:40 PM
And one of the reasons we will NOT enter into any arrangements with brokers. We'll just originate on our own.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 10/30/09 08:40 PM
Originally Posted By: Sinatra Fan
And one of the reasons we will NOT enter into any arrangements with brokers. We'll just originate on our own.
Either the Brokers have better lobbyist than the banks or this is HUDs way of getting rid of the trouble makes for this mess?
I know we will no longer have any broker relationships.
Posted By: Still Smiling
Re: RESPA changes 1-1-10 - 10/31/09 02:28 PM
I could really use some help with a few examples that do not justify a changed circumstance. I have read through the FAQ's and they seem to be the obvious ones, but I am more interested in your opinions of those that might not be so obvious. Any help is greatly appreciated.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 11/01/09 03:12 AM
I can only find one item on the FAQ concerning Yield Spread Premiums on the GFE and I am not sure if I understand it correctly. We are a correspondent lender and receive 1% for the sale of the loan. The loan does not close in our name. Do we list this as an origination fee on line 1 “Our origination charge” and then list it as a credit on line 2 “Your credit or charge (points) for the specific interest rate chosen”?
Does this also apply when we include the point and delivery fees in the rate on a secondary market loan that we close and service?
Does this also apply when we include the point and delivery fees in the rate on a secondary market loan that we close and service?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/02/09 01:58 PM
Originally Posted By: NanciT
Is it possible to hold the mortgage broker responsible for fees that are understated on the GFE which then fall outside the 10% tolerance on the HUD-1? If the broker is just plain wrong about the fee, the lender accepts the GFE and there is no subsequent changed circumstances that allow reissuance of the GFE, is the lender left holding the bag? The following FAQ seems to indicate that the lender cannot deduct the "mistake" from the broker's compensation but perhaps someone has a way around this? I appreciate anyone's input!!!
6) Q: If a loan originator pressures a settlement agent to reduce their charges or to ‗cover the difference‘ to bring the costs into compliance with the tolerances, is that considered a violation of RESPA Section 8(a)?
A: If a loan originator (or other settlement service provider) pressures a settlement agent (or other settlement service provider) to reduce their charges or otherwise ‗cover the difference‘ to bring the costs into compliance with the tolerances as a condition of receiving future referrals of business, it may be considered a potential violation of RESPA Section 8(a). Please contact the Office of RESPA and ILS to file a complaint.
6) Q: If a loan originator pressures a settlement agent to reduce their charges or to ‗cover the difference‘ to bring the costs into compliance with the tolerances, is that considered a violation of RESPA Section 8(a)?
A: If a loan originator (or other settlement service provider) pressures a settlement agent (or other settlement service provider) to reduce their charges or otherwise ‗cover the difference‘ to bring the costs into compliance with the tolerances as a condition of receiving future referrals of business, it may be considered a potential violation of RESPA Section 8(a). Please contact the Office of RESPA and ILS to file a complaint.
I think this (in red) should be looked at. It would stand to reason that if a broker messed up, you should have an agreement that they would cure the error...that's different that conditioning future referrals, IMHO.
Posted By: Carter's Mom
Re: RESPA changes 1-1-10 - 11/02/09 01:58 PM
OK, I have a question. If you have a mortgage loan with a discount or points (charges) and the lender is paying $500 in closing costs (credit) how do you show both on the GFE? It says you can only choose one in box 2, page 2 of the GFE. Any ideas?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/02/09 02:04 PM
Originally Posted By: jlroberts
I can only find one item on the FAQ concerning Yield Spread Premiums on the GFE and I am not sure if I understand it correctly. We are a correspondent lender and receive 1% for the sale of the loan. The loan does not close in our name. Do we list this as an origination fee on line 1 “Our origination charge” and then list it as a credit on line 2 “Your credit or charge (points) for the specific interest rate chosen”?
Does this also apply when we include the point and delivery fees in the rate on a secondary market loan that we close and service?
Does this also apply when we include the point and delivery fees in the rate on a secondary market loan that we close and service?
If it's a true YSP based on the rate (above par) and you know it prior to closing, it should be included in the origination charge. If it's a SRP and it's paid (if any) after closing, you would not. Because it's a table-funded loan and you are aware of the additional fee you will get, my opinion would be you would disclose it.
On to your second question. Including point and delivery fees in rate. Does this mean you are charging a higher rate that you assume will cover these fees in lieu of charging the fee? If so, then Id say you fit a #2 check box one scenario and would be entering zero in block 2.
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 11/03/09 01:53 PM
Question to HUD:Our question is regarding the No Closing Cost loan, where the bank pays some or all closing costs (including third party costs). The 10/23/09 FAQ has a question on page 21 about GFE-Block 2.
The FAQ's indicate to show a GFE credit on line 2 which creates a credit in Block A. My question is what do we do as a lender when the following occurs?
1) The actual closing costs are less than the credit from the GFE Block A? The HUD-1 FAQ instructions are to carryover Block A to the HUD-1, which means the borrower could receive cash back on a No Closing Cost loan. Surely this is not the intent of HUD.
2) The actual closing costs are higher than the credit from the GFE Block A? Obviously the bank would intend to pay the closing costs that exceed the GFE Block A estimate. How is that reconciled on the HUD-1?
I posed the question above to the FHA RESPA email address and did receive a response. Here is their response below:
1) The GFE is an estimate. If the actual closing costs are lower than the GFE, it is certainly a bonus for the consumer. The estimates for certain fees are expected to be within a tolerance level, but if fees are lower than expected but still within the tolerance, HUD would not expect to see a refund.
The rule includes some references which may be helpful.
“ In the case of ‘‘no cost’’ loans, where ‘‘no
cost’’ refers only to the loan originator’s fees,
the amounts shown in Lines 801 and 802
should offset, so that the charge shown on
Line 803 is zero. Where ‘‘no cost’’ includes
third party settlement services, the credit
shown in Line 802 will more than offset the
amount shown in Line 801. The amount
shown in Line 803 will be a negative number
to offset the settlement charges paid
indirectly through the loan originator.” P. 68245 FR Nov. 17, 2008
2) If the actual closing costs are higher than expected, the lender has an opportunity to cure. I’ve enclosed below another clip from the Federal Register describing the rule. Essentially, lenders have 30 days to work with the settlement agent to cure and issue a new HUD-1.
HUD Determination
Based on the comments received in response to the proposed rule and further consideration of this issue by
HUD, HUD has determined that a cure provision is important to allow loan originators to more effectively manage
any uncertainty in costs associated with the required tolerances on the GFE. By including a cure provision, HUD
recognizes that some errors are inevitable when handling large numbers of complex transactions, and HUD does
not intend for the tolerance requirements to create liability for inadvertent errors.
As described in more detail above, HUD has built an opportunity to cure violations of the tolerances into the
requirements establishing the tolerances. The final rule also provides that a violation of any of the
requirements for completing the HUD– 1/1A shall be deemed to be a violation of section 4 of RESPA. However, the
rule provides that an inadvertent or technical error in completing the HUD– 1/1A shall not be deemed a violation of
section 4 of RESPA, if a revised HUD– 1/1A is provided to the borrower and/or seller within 30 calendar days of
settlement. This opportunity to cure errors on the HUD–1/1A is consistent with HUD’s longstanding policy permitting settlement agents to provide revised HUD–1/1A settlement statements where errors are discovered after settlement.
P. 68222
The FAQ's indicate to show a GFE credit on line 2 which creates a credit in Block A. My question is what do we do as a lender when the following occurs?
1) The actual closing costs are less than the credit from the GFE Block A? The HUD-1 FAQ instructions are to carryover Block A to the HUD-1, which means the borrower could receive cash back on a No Closing Cost loan. Surely this is not the intent of HUD.
2) The actual closing costs are higher than the credit from the GFE Block A? Obviously the bank would intend to pay the closing costs that exceed the GFE Block A estimate. How is that reconciled on the HUD-1?
I posed the question above to the FHA RESPA email address and did receive a response. Here is their response below:
1) The GFE is an estimate. If the actual closing costs are lower than the GFE, it is certainly a bonus for the consumer. The estimates for certain fees are expected to be within a tolerance level, but if fees are lower than expected but still within the tolerance, HUD would not expect to see a refund.
The rule includes some references which may be helpful.
“ In the case of ‘‘no cost’’ loans, where ‘‘no
cost’’ refers only to the loan originator’s fees,
the amounts shown in Lines 801 and 802
should offset, so that the charge shown on
Line 803 is zero. Where ‘‘no cost’’ includes
third party settlement services, the credit
shown in Line 802 will more than offset the
amount shown in Line 801. The amount
shown in Line 803 will be a negative number
to offset the settlement charges paid
indirectly through the loan originator.” P. 68245 FR Nov. 17, 2008
2) If the actual closing costs are higher than expected, the lender has an opportunity to cure. I’ve enclosed below another clip from the Federal Register describing the rule. Essentially, lenders have 30 days to work with the settlement agent to cure and issue a new HUD-1.
HUD Determination
Based on the comments received in response to the proposed rule and further consideration of this issue by
HUD, HUD has determined that a cure provision is important to allow loan originators to more effectively manage
any uncertainty in costs associated with the required tolerances on the GFE. By including a cure provision, HUD
recognizes that some errors are inevitable when handling large numbers of complex transactions, and HUD does
not intend for the tolerance requirements to create liability for inadvertent errors.
As described in more detail above, HUD has built an opportunity to cure violations of the tolerances into the
requirements establishing the tolerances. The final rule also provides that a violation of any of the
requirements for completing the HUD– 1/1A shall be deemed to be a violation of section 4 of RESPA. However, the
rule provides that an inadvertent or technical error in completing the HUD– 1/1A shall not be deemed a violation of
section 4 of RESPA, if a revised HUD– 1/1A is provided to the borrower and/or seller within 30 calendar days of
settlement. This opportunity to cure errors on the HUD–1/1A is consistent with HUD’s longstanding policy permitting settlement agents to provide revised HUD–1/1A settlement statements where errors are discovered after settlement.
P. 68222
Posted By: KML 54
Re: RESPA changes 1-1-10 - 11/03/09 02:05 PM
I believe that section 3500.7(h) exempts home equity loans from the GFE disclosure requirement.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/03/09 04:08 PM
OldSchool...how are you interpreting the answer to #2...It almost sounds like you have to carry over what you disclose...then correct...that doesn't make a whole lot of practical sense....am I missing something?
Posted By: kristin09
Re: RESPA changes 1-1-10 - 11/03/09 08:37 PM
I have a question regarding if you have an interest-related change on the GFE. For example, if we allow a floating rate for 45 days and then the borrower locks into a rate, my understanding is that we only need to issue a revised GFE to amend those interest rate dependent charges and terms change. We are not allowed to change the other terms on the GFE unless we have a "changed circumstance".
My question is do we have to give the borrowers at least 10 business days from the date the revised GFE is provided to close the loan (in order to shop around)? FAQ #12 under Important Dates states that you do if you have a changed circumstance or a borrower requested change, but this change is outside all other settlement charges.
Anyone have thoughts?
My question is do we have to give the borrowers at least 10 business days from the date the revised GFE is provided to close the loan (in order to shop around)? FAQ #12 under Important Dates states that you do if you have a changed circumstance or a borrower requested change, but this change is outside all other settlement charges.
Anyone have thoughts?
Posted By: Carter's Mom
Re: RESPA changes 1-1-10 - 11/03/09 08:45 PM
Originally Posted By: Carter's Mom
OK, I have a question. If you have a mortgage loan with a discount or points (charges) and the lender is paying $500 in closing costs (credit) how do you show both on the GFE? It says you can only choose one in box 2, page 2 of the GFE. Any ideas?
Bump.... anyone have any thoughts on this?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/03/09 09:10 PM
reduce your orignation charges?
Posted By: Amos
Re: RESPA changes 1-1-10 - 11/03/09 09:21 PM
What actions, if any, do you plan to take on applications where you have provided the GFE but you do not have the applicant's intent to proceed (i.e., they are shopping around)? Will you do nothing? Will you send a Notice of Incompleteness? Will you start processing the application? What action will you take if the GFE expires and the applicant did not give you an intent to proceed?
Posted By: MT Pockets
Re: RESPA changes 1-1-10 - 11/03/09 09:37 PM
My advice to our lenders on this issue - If you have a complete application and no intent to proceed by the borrower, you have a withdrawn application and would follow your current practice for a withdrawn app. If you don't have a complete application, don't issue the GFE. Follow the procedures for an incomplete application.
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 11/03/09 11:56 PM
KML -Some lenders are using No Closing Cost on refinances, whereas others are doing them with closed end home equity loans which are subject to RESPA. You are correct that HELOC are not covered.
RR Joker - cryptic answer indeed. You are correct it looks like you carryover the GFE amount then it is reconciled with the cure process and reconciliation on page 3 of the HUD-1. Obviously the lender's intent is to pay the costs anyway.
RR Joker - cryptic answer indeed. You are correct it looks like you carryover the GFE amount then it is reconciled with the cure process and reconciliation on page 3 of the HUD-1. Obviously the lender's intent is to pay the costs anyway.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/04/09 01:09 PM
I truly hope the attorneys are getting up to speed on this...I've had some want to get together for some training...when we blast them with our fee sheet soon, we may get their attention?
Posted By: Carter's Mom
Re: RESPA changes 1-1-10 - 11/04/09 01:16 PM
If I am reading the FAQs correctly, if you have a tolerance violation and you are going to cut a check to the borrower then you have to provide a corrected HUD 1. Am I understanding that correctly? If this is true, what is everyones plans? Are you going to close the loan and then provide the check and corrected HUD 1 after closing? Are you going to try to do it all at the closing table?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/04/09 01:43 PM
Originally Posted By: Carter's Mom
If I am reading the FAQs correctly, if you have a tolerance violation and you are going to cut a check to the borrower then you have to provide a corrected HUD 1. Am I understanding that correctly? If this is true, what is everyones plans? Are you going to close the loan and then provide the check and corrected HUD 1 after closing? Are you going to try to do it all at the closing table?
That's correct. I would think you would want to be done with it at closing and not have to do any follow up after the loan is closed.
Posted By: Carter's Mom
Re: RESPA changes 1-1-10 - 11/04/09 02:04 PM
So do we give the customer both HUD 1s?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/04/09 02:19 PM
CM-I thought I had read that if the lender recognizes an error at time of settlment, you can poc the the amount and only charge the disclosed amount to the borrower, so the entire cost is shown but the borrower only pays what was disclosed to them on the GFE. I am trying to find the specific reference to it (I think it was in the most recent FAQ)
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/04/09 02:49 PM
It appears they still use the term revised even if it's done at closing. So..you'd have the HUD that reflects the GFE, then a revised one POC curing the tolerance violation...at least that's how it's described as far as I can tell.
So..each party would receive the first HUD and a corrected HUD clearing the tolerance...seems unncessary but I guess it's on account of the comparison on page 3 being done per the original GFE.
So..each party would receive the first HUD and a corrected HUD clearing the tolerance...seems unncessary but I guess it's on account of the comparison on page 3 being done per the original GFE.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/04/09 03:02 PM
If at the time the HUD is completed and the section that shows the Tolerance variance. If the aggregate is out of tolerance by 2% = to $65 over the 10% tolerance allowed, you only need to credit back to the customer the $65 to get your tolerance back into 10%.
Do I have that right?
Do I have that right?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/04/09 03:05 PM
Originally Posted By: RR joker
It appears they still use the term revised even if it's done at closing. So..you'd have the HUD that reflects the GFE, then a revised one POC curing the tolerance violation...at least that's how it's described as far as I can tell.
So..each party would receive the first HUD and a corrected HUD clearing the tolerance...seems unncessary but I guess it's on account of the comparison on page 3 being done per the original GFE.
So..each party would receive the first HUD and a corrected HUD clearing the tolerance...seems unncessary but I guess it's on account of the comparison on page 3 being done per the original GFE.
Makes a lot of sense..
I guess I need to go back to that section...
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/04/09 03:09 PM
DD, keep in mind that the tolerance is calculated from the original GFE you gave. If you gave an updated GFE you need to go back to the original and calculate your tolerance.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/04/09 03:13 PM
Truf...how do you figure. If you updated a GFE due to 1) expiration prior to Intent to proceed, or 2) an allowable changed circumstance...that is the GFE you use. Keep in mind only the section that CHANGED can be changed upon revision.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/04/09 03:21 PM
I was parotting something I heard in the OTS call yesterday, or so I thought. She said you had to go back to the original GFE to calculate the tolerance. Did anyone else hear that or did I misunderstand? Trust me, I can take the hit if I got it wrong especially because everyone here needs to get it right!
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/04/09 03:22 PM
If that were true..there would be no need for revisions!
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/04/09 03:36 PM
RR is right-if a new GFE is issued due to "changed circumstance" then only the fees directly related to the change can be revised. Other fees originally quoted can not change. As an example, if a loan amount is changed, only fees related to loan amount can change (title insurance, per diem, points, etc). Other static fees (processing, doc prep, etc) that are not determined based on loan amount must stay the same. I would think the final tolerances would be based on the last GFE and the lender would need to document the reasons for the redisclosure.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/04/09 04:01 PM
which would be documented and kept for 3 years!
Posted By: azbanker
Re: RESPA changes 1-1-10 - 11/04/09 04:38 PM
In construction loans in which our transaction transfers title, where would you put the fee for construction inspections? Lender requires it, it's paid to a third party, the borrower is not allowed to shop. Included in 801 or in section 3?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/04/09 04:41 PM
3
Posted By: azbanker
Re: RESPA changes 1-1-10 - 11/04/09 05:03 PM
Thanks RR!
Posted By: Compliance Geek
Re: RESPA changes 1-1-10 - 11/04/09 05:48 PM
Regarding item 1104 - Lender's Title Insurance. In our state, the listing agent (seller) selects the title insurance company that facilitates the purchase transaction and issues the owner's title insurance policy. Lenders typically use the same title insurance company to issue the lender's title insurance policy.
My issue is that while we technically allow the borrower to "shop" for the lender's policy (we are not selecting the title ins company), providing the borrower a list of title companies is fallacious as the borrower will not be able to select the title company (because the listing agent does it).
So, the conversation will go -
L: "Here's your list of title insurance companies for the lender's policy we require."
B: "Great, my brother works for Smith Title. Let's go with that one."
L: "Sorry, but you don't really get to choose, because that is up to the seller's real estate agent."
L: "Oh, and by the way, block 4 on that GFE we just gave you can change at settlement because you went off the list."
L: "Have a nice day."
This seems very wrong. Am I off base? I would really appreciate any thoughts.
Thanks.
My issue is that while we technically allow the borrower to "shop" for the lender's policy (we are not selecting the title ins company), providing the borrower a list of title companies is fallacious as the borrower will not be able to select the title company (because the listing agent does it).
So, the conversation will go -
L: "Here's your list of title insurance companies for the lender's policy we require."
B: "Great, my brother works for Smith Title. Let's go with that one."
L: "Sorry, but you don't really get to choose, because that is up to the seller's real estate agent."
L: "Oh, and by the way, block 4 on that GFE we just gave you can change at settlement because you went off the list."
L: "Have a nice day."
This seems very wrong. Am I off base? I would really appreciate any thoughts.
Thanks.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/04/09 06:03 PM
It's still a choice in your state, right Geek? If so, the buyer can make it a part of the purchase contract that they go with their brother's title company, even after the fact with an amendment to the contract.
What criteria is the seller's agent using? I've worked for national title companies and most often, the title company is selected based on who currently insures the property. It's usually cheaper to stay with XYZ Title than try to move it to ABC Title. Now if the agent doesn't care about his seller's cost....???
What criteria is the seller's agent using? I've worked for national title companies and most often, the title company is selected based on who currently insures the property. It's usually cheaper to stay with XYZ Title than try to move it to ABC Title. Now if the agent doesn't care about his seller's cost....???
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/04/09 06:38 PM
Quote:
Oh, and by the way, block 4 on that GFE we just gave you can change at settlement because you went off the list."
Actually, if they go off your list...it can't change, or at least has to stay within the 10% aggregate.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/04/09 07:05 PM
Around here, and probably lots of places, it's typical that closing costs are "paid" by the seller...usually by increasing the price to cover.
That said, and knowing you have to disclose these items as if the borrower was going to pay them...and since you don't get to show a credit until time for the HUD...do you all plan to just explain this to the customer?
Like "yeah, well...you really won't be needing but approximately $XX.XX to close the loan because the seller is actually going to pay all these fees we're showing you paying".
That said, and knowing you have to disclose these items as if the borrower was going to pay them...and since you don't get to show a credit until time for the HUD...do you all plan to just explain this to the customer?
Like "yeah, well...you really won't be needing but approximately $XX.XX to close the loan because the seller is actually going to pay all these fees we're showing you paying".
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/04/09 07:07 PM
That will pretty much be it, RR.
I think it is time for a career change.
I think it is time for a career change.
Posted By: Compliance Geek
Re: RESPA changes 1-1-10 - 11/04/09 07:17 PM
I suppose it is technically a choice, but in practice it doesn't happen. BTW - Sellers pay for and select the owner's policy as well. So, the same issues apply with that.
I think the seller's agent use title companies that they are comfortable with. I'm not convinced that the seller's cost is much of a factor.
Joker - I'm confused by your statement. I thought that if the borrower does not use a company that we identify for title services that the charges can then change at settlement. Sorry to be clueless on this, but the more I think I know about the new RESPA, the less I actually do.
I think the seller's agent use title companies that they are comfortable with. I'm not convinced that the seller's cost is much of a factor.
Joker - I'm confused by your statement. I thought that if the borrower does not use a company that we identify for title services that the charges can then change at settlement. Sorry to be clueless on this, but the more I think I know about the new RESPA, the less I actually do.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/04/09 07:22 PM
Geek-you are right regarding your final statement-if they choose a vendor not on your list, there is no limit to the change in fee.
As for your first question above, how is it a borrower choice if the seller selects and pays for the service?
As for your first question above, how is it a borrower choice if the seller selects and pays for the service?
Posted By: CompDat
Re: RESPA changes 1-1-10 - 11/04/09 07:42 PM
2 questions. It appears that you do not have to put estimated taxes on the GFE except if you escrow those. Is this correct?
Also, you are required to give a list of settlement service providers for anything you let the customer shop for. Those would go in line 6 of the GFE. What about hazard insurance? That is a service that the customer will shop for, however it is in line 11.
Also, you are required to give a list of settlement service providers for anything you let the customer shop for. Those would go in line 6 of the GFE. What about hazard insurance? That is a service that the customer will shop for, however it is in line 11.
Posted By: ahou
Re: RESPA changes 1-1-10 - 11/04/09 07:46 PM
Taxes (other than escrow) don't go on the GFE. Hazard goes on line 11 because it is a charge that can change.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/04/09 07:53 PM
cOMPLIANCE Geek...I may have misinterpreted. When you said "went off the list", I understood that to mean they choose someone on the list. Perhaps you meant they didn't choose someone on your list so yes, it can change.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/04/09 08:31 PM
If our Legal department only approves of certain title agencies (and have those we will not deal with),
1. If we Don't allow the customer to shop for a title company, but provide a list of those they are permitted to use, are we still held to a 10% tolerance and Would we list them in block 3? or is this still permitted?
2. Can we still have "Unacceptable" list?
1. If we Don't allow the customer to shop for a title company, but provide a list of those they are permitted to use, are we still held to a 10% tolerance and Would we list them in block 3? or is this still permitted?
2. Can we still have "Unacceptable" list?
Posted By: Carter's Mom
Re: RESPA changes 1-1-10 - 11/04/09 08:32 PM
We do early disclosures on temporary construction loans where we are also going to be doing the permanent financing. My question is, interest is due monthly, so on the payment amount do I show the first month's interest calculated assuming the entire balance is advanced? Or is it similar to the Pre Til where you assume half of the balance is advanced at origination?
Posted By: Carter's Mom
Re: RESPA changes 1-1-10 - 11/04/09 08:47 PM
Originally Posted By: Carter's Mom
We do early disclosures on temporary construction loans where we are also going to be doing the permanent financing. My question is, interest is due monthly, so on the payment amount do I show the first month's interest calculated assuming the entire balance is advanced? Or is it similar to the Pre Til where you assume half of the balance is advanced at origination?
My question is regarding the payment amount shown on the front page of the GFE.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/04/09 09:02 PM
Originally Posted By: DD Regs
If our Legal department only approves of certain title agencies (and have those we will not deal with),
1. If we Don't allow the customer to shop for a title company, but provide a list of those they are permitted to use, are we still held to a 10% tolerance and Would we list them in block 3? or is this still permitted?
You can allow them to shop, but only for the ones on your approved list...You will be held to tolerance, yes.
2. Can we still have "Unacceptable" list?
1. If we Don't allow the customer to shop for a title company, but provide a list of those they are permitted to use, are we still held to a 10% tolerance and Would we list them in block 3? or is this still permitted?
You can allow them to shop, but only for the ones on your approved list...You will be held to tolerance, yes.
2. Can we still have "Unacceptable" list?
yes...there are many attorney's etc that have no business doing RE loans!
We plan to send a letter to our approved attorney's in all markets having them detail out their charges and ways for us to determine the insurance fees, etc. I don't believe we will give a "short list" to avoid dealing with tolerance because it's not a good PR deal! However, it will mean you will disclose your highest charges and then let the borrower choose whomever they wish, so long as they are on your list.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/04/09 09:06 PM
Originally Posted By: Carter's Mom
Originally Posted By: Carter's Mom
We do early disclosures on temporary construction loans where we are also going to be doing the permanent financing. My question is, interest is due monthly, so on the payment amount do I show the first month's interest calculated assuming the entire balance is advanced? Or is it similar to the Pre Til where you assume half of the balance is advanced at origination?
My question is regarding the payment amount shown on the front page of the GFE.
See Q&A GFE-Summmary of your Loan #2. It appears you wil show the first month's estimated interest.
Posted By: Compliance Geek
Re: RESPA changes 1-1-10 - 11/04/09 09:14 PM
Originally Posted By: Sox in 07
As for your first question above, how is it a borrower choice if the seller selects and pays for the service?
That is my concern - it is not a borrower choice. So, to provide a list seems disingenuous at best. But, if we don't provide a list, then we are stuck with a 10% tolerance that we have no hope of meeting (it is likely we won't know who the title company is or what the charge is at GFE time). Plus, it is still wrong - it is not a required settlement service that we select.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/04/09 09:24 PM
Compliance Geek, if you will go back in this thread, there is discussion about certain fees that the seller "typically" pays in a closing. this appears to be driven by area/state, etc. This may fall under that category if it's typical for your area.
It's also somewhere in the Q&A's if memory serves me!
In fact, look at page 23 #7 at top of page.
never mind...next section cancelled that thought entirely!
It's also somewhere in the Q&A's if memory serves me!
In fact, look at page 23 #7 at top of page.
never mind...next section cancelled that thought entirely!
Posted By: Carter's Mom
Re: RESPA changes 1-1-10 - 11/04/09 09:31 PM
Originally Posted By: RR joker
Originally Posted By: Carter's Mom
Originally Posted By: Carter's Mom
We do early disclosures on temporary construction loans where we are also going to be doing the permanent financing. My question is, interest is due monthly, so on the payment amount do I show the first month's interest calculated assuming the entire balance is advanced? Or is it similar to the Pre Til where you assume half of the balance is advanced at origination?
My question is regarding the payment amount shown on the front page of the GFE.
See Q&A GFE-Summmary of your Loan #2. It appears you wil show the first month's estimated interest.
I saw the first month's interest. Since it is an advancing line, do you think the first month's interest should be calculated on the full loan amount even though you don't know if the full amount will be advanced at origination? Or do you think it should be based on 1/2 the loan amount like a pre til?
Posted By: azbanker
Re: RESPA changes 1-1-10 - 11/04/09 10:48 PM
Carter's Mom,
Laser pro is calculating 1/2 like on the pre til. It is also saying no balloon. On a 12 month interest only construction loan, it looks like 12 payments of 1/2 interest would pay it off...very confusing for the customer. Laser Pro is looking in to whether this is compliant.
Laser pro is calculating 1/2 like on the pre til. It is also saying no balloon. On a 12 month interest only construction loan, it looks like 12 payments of 1/2 interest would pay it off...very confusing for the customer. Laser Pro is looking in to whether this is compliant.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/05/09 04:52 AM
If you close the loan with a tolerance violation, you will give them a HUD-1/1A at closing. Then you'll give them another one showing the violation being cured and a check for the difference.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 11/05/09 01:00 PM
We have a question about Non-RESPA loans as they relate to the new GFE and HUD. An investment/rental property is a Non REPSA loan. We use the GFE and HUD for RESPA and Non RESPA loans. On 01/01/10 we don’t want to be bound to RESPA requirements on a Non RESPA loan but if we use the new documents, it makes the loan look like it is a RESPA loan.
Any ideas/thoughts/suggestions?
Any ideas/thoughts/suggestions?
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/05/09 01:17 PM
Originally Posted By: RR joker
Originally Posted By: DD Regs
If our Legal department only approves of certain title agencies (and have those we will not deal with),
1. If we Don't allow the customer to shop for a title company, but provide a list of those they are permitted to use, are we still held to a 10% tolerance and Would we list them in block 3? or is this still permitted?
You can allow them to shop, but only for the ones on your approved list...You will be held to tolerance, yes.
2. Can we still have "Unacceptable" list?
1. If we Don't allow the customer to shop for a title company, but provide a list of those they are permitted to use, are we still held to a 10% tolerance and Would we list them in block 3? or is this still permitted?
You can allow them to shop, but only for the ones on your approved list...You will be held to tolerance, yes.
2. Can we still have "Unacceptable" list?
yes...there are many attorney's etc that have no business doing RE loans!
We plan to send a letter to our approved attorney's in all markets having them detail out their charges and ways for us to determine the insurance fees, etc. I don't believe we will give a "short list" to avoid dealing with tolerance because it's not a good PR deal! However, it will mean you will disclose your highest charges and then let the borrower choose whomever they wish, so long as they are on your list.
RR joker- can you explain your last lines- you say you are not going to provide a list to avoid dealing with tolerances but then you say let the borrower choose whomever they wish so long as they are on your list-
I thought we had to have a list of approved providers- if the borrower picks off the list we have 10% tolerance but if they get someone off the list then it's zero tolerance- thanks
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/05/09 01:41 PM
By a "short list" I mean...we won't give them just 2 of our approved attorney's hoping they'll choose another attorney (still approved by us) to avoid tolerance.
If we have 15 approved closing attorneys, I'm guessing we will give them a list of all of them. We'll use the highest estimate for application purposes, but if they choose one that's less (and most are pretty standard with fees), then that's to their favor and it won't matter.
If we have 15 approved closing attorneys, I'm guessing we will give them a list of all of them. We'll use the highest estimate for application purposes, but if they choose one that's less (and most are pretty standard with fees), then that's to their favor and it won't matter.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/05/09 01:53 PM
ok thanks alot.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/05/09 01:57 PM
Our markets, for the most part, are in fairly small areas...to "discriminate" and give the appearance of "referring" only a couple of our more than capable attorneys, would not be a very good PR move, I wouldn't think!
Some larger banks/markets, I can see where they may limit or flat out require a specific closer because they are not going to care from a PR standpoint.
Some larger banks/markets, I can see where they may limit or flat out require a specific closer because they are not going to care from a PR standpoint.
Posted By: tcredle
Re: RESPA changes 1-1-10 - 11/05/09 02:43 PM
If we do the construction loan only and not the permanent financing, we have an interest only payment for 12 months. Do we give the good faith and if so where do I put the int only payment? The Good Faith is calling for the P & I payment. I am getting confused.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/05/09 02:54 PM
If you are doing a construction loan subject to RESPA, you would show the interest payment in the "monthly amount" section (on the first page and the Tradeoff Table on page 3). Then you would show the principal in the "Does your loan have a balloon payment" box (all on the first page).
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/05/09 03:03 PM
So,if we don't allow the customer to shop for a title company (off our list), but provide a list of those they are permitted to use, we are still held to a 10% tolerance?
So would we list them in block 3 as a required service that we select?
So would we list them in block 3 as a required service that we select?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/05/09 03:17 PM
Title companies always go in Block 4 (lender's) and Block 5 (owner's) - whether they can shop or you choose. If you allow them to shop, you must provide a list of providers. If you don't allow them to shop, no list is triggered.
Posted By: ahou
Re: RESPA changes 1-1-10 - 11/05/09 04:07 PM
When a loan closes in Nov, the pmt due date would be Jan 1st. Thus, we collect the current years tax liability (due in Dec) from both the seller and the borrower. Where would we record the borrower's portion on the HUD? Could we put it on line 104?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/05/09 04:13 PM
I'd put the entire year's tax bill on 904. Then I'd adjust for the seller's portion on 210 & 510.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/05/09 04:24 PM
I agree the proration of taxes is to be shown on 211/511. If there are taxes due, I'd also list them in the 900's.
Posted By: ahou
Re: RESPA changes 1-1-10 - 11/05/09 04:28 PM
Thanks Truffle & David. Makes sense to me.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/05/09 04:32 PM
Originally Posted By: DD Regs
So,if we don't allow the customer to shop for a title company (off our list), but provide a list of those they are permitted to use, we are still held to a 10% tolerance?
So would we list them in block 3 as a required service that we select?
So would we list them in block 3 as a required service that we select?
DDRegs...although David already answered your question, I wanted to elaborate just a bit.
If you allow them to choose from your "select" list of approved attorneys, they can still "shop" any or all of those attorneys. To me, that is still shopping and would be subject to the 10% tolerance.
If you choose the attorney, say on a rotational basis, and truly don't give the client a choice...that would be where you wouldn't provide a list. You would still be subject to the 10% tolerance and it would still go in the title services section.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/05/09 05:49 PM
Thanks Dave and RR,
I have another question.
In regards to a Pre Approval. I am kind of thinking this out loud, Would you give a GFE based on what you know at the time of the pre approval application? Technically you do not have enough to be considered an App per RESPA definition "no property".
If the borrower does not find a property within 10 days, you would reissue a GFE anyway.
I can't imagine a potential borrower going with you until they see a GFE for cost comparison.
I have another question.
In regards to a Pre Approval. I am kind of thinking this out loud, Would you give a GFE based on what you know at the time of the pre approval application? Technically you do not have enough to be considered an App per RESPA definition "no property".
If the borrower does not find a property within 10 days, you would reissue a GFE anyway.
I can't imagine a potential borrower going with you until they see a GFE for cost comparison.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/05/09 05:59 PM
Originally Posted By: RR joker
Our markets, for the most part, are in fairly small areas...to "discriminate" and give the appearance of "referring" only a couple of our more than capable attorneys, would not be a very good PR move, I wouldn't think!
Some larger banks/markets, I can see where they may limit or flat out require a specific closer because they are not going to care from a PR standpoint.
Some larger banks/markets, I can see where they may limit or flat out require a specific closer because they are not going to care from a PR standpoint.
Thanks. That would be a point I need to make to management.
Posted By: Compliance Geek
Re: RESPA changes 1-1-10 - 11/05/09 07:00 PM
Originally Posted By: jlroberts
We have a question about Non-RESPA loans as they relate to the new GFE and HUD. An investment/rental property is a Non REPSA loan. We use the GFE and HUD for RESPA and Non RESPA loans. On 01/01/10 we don’t want to be bound to RESPA requirements on a Non RESPA loan but if we use the new documents, it makes the loan look like it is a RESPA loan.
Any ideas/thoughts/suggestions?
Any ideas/thoughts/suggestions?
We have the same issue. We have used consumer loan docs for non-owner occupied rental property for a long time. I'm currently lobbying that we issue documents from our commercial loan system instead. The only drawback we have with this choice is that our commercial system does a lousy job with escrows and we escrow most non-owner occupied rental property loans. In the past, our loan officers have screamed when we tried to not produce an initial escrow statement for these loans. So, we may have to figure out another way to produce them.
Another alternative is that you could simply not issue the GFE, TIL, and HUD. However, most borrowers are going to want a schedule of fees anyway. I personally don't like this option.
The last option I have considered is just to continue to use the consumer docs. If we get sued by the borrower, we would have to argue that the docs didn't really apply to the loan because the loan was commercial. This is the option I like the least.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/05/09 07:55 PM
Originally Posted By: DD Regs
In regards to a Pre Approval. I am kind of thinking this out loud, Would you give a GFE based on what you know at the time of the pre approval application? Technically you do not have enough to be considered an App per RESPA definition "no property".
I've been thinking a lot about preapprovals and RESPA. Here's my thoughts so you can "think" along with me.
1. Preapproval means I've verified the customer fully. The new RESPA rules say I can't ask for any verification from the customer until I issue a GFE.
2. The RESPA FAQs state if I issue a GFE without an identified dwelling and later a dwelling is found, this is NOT a changed circumstance. Therefore, I wouldn't want to issue a GFE until a house is found.
3. #1 & #2 seem to have me caught between a rock and hard place. I can't ask for verification documents until I issue a GFE, but I don't want to issue a GFE until a house is found.
The only option I can come up with is to issue a GFE, so you can request verification documents so you can issue a preapproval. However, you can't reissue a GFE when a house is found unless there is another changed circumstance.
What do you all think?
Quote:
If the borrower does not find a property within 10 days, you would reissue a GFE anyway.
Correct.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/05/09 08:12 PM
That is what I don't get about this thing. The intent is to "help the customer make an informed decission" but how can they make an infored decission without a GFE? And what bank wants to issue a GFE w/o the identified dwelling if ading that later is not a changed condition?
Do pre approvals go Bye Bye?
Do banks provide an "Typical cost information " sheet (not a gfe) to help the custome know of your banks "typical cost".
Do pre approvals go Bye Bye?
Do banks provide an "Typical cost information " sheet (not a gfe) to help the custome know of your banks "typical cost".
Posted By: Sage
Re: RESPA changes 1-1-10 - 11/05/09 08:31 PM
In our branches the customer is not typically involved in the choice of attorney/title co. On a purchase, we typically get a title insurance policy, and just work with the title co lined up by the realtor/seller/broker. On a refi where we just need an atty opinion, we typically just order it from one of the approved attorneys that we have provided us good service.
Can we still do that? But then there is zero tolerance, right?
Can we still do that? But then there is zero tolerance, right?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/05/09 08:39 PM
I have been asking that myself, DD, about most of the new changes...
I have what should be a simple ? but I am reading conflicting infromation.
Scenario: LO is charging one point for a rate. The point is included in Block 1 of GFE, and as I understand it, Block 2, box 1 is optional as to whether to disclose that point in block one above. Say we do check it off. With the same deal, the LO is paying all or some of the closing costs. Do we net it out of Block 1, since the instructions say we can't check off more than one box in Block 2?
I have what should be a simple ? but I am reading conflicting infromation.
Scenario: LO is charging one point for a rate. The point is included in Block 1 of GFE, and as I understand it, Block 2, box 1 is optional as to whether to disclose that point in block one above. Say we do check it off. With the same deal, the LO is paying all or some of the closing costs. Do we net it out of Block 1, since the instructions say we can't check off more than one box in Block 2?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/05/09 10:04 PM
Originally Posted By: DD Regs
That is what I don't get about this thing. The intent is to "help the customer make an informed decission" but how can they make an infored decission without a GFE? And what bank wants to issue a GFE w/o the identified dwelling if ading that later is not a changed condition?
Do pre approvals go Bye Bye?
Do pre approvals go Bye Bye?
That's what I'm wondering too.
Quote:
Do banks provide an "Typical cost information " sheet (not a gfe) to help the custome know of your banks "typical cost".
I think we're going to start seeing these. As you know the GFE doesn't state the actual closing costs (how much they need to bring to the closing table) nor does it tell them their PITI payment. I assume banks will begin issuing a "Here's what you really need to know" sheet.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/05/09 10:05 PM
Originally Posted By: Sage
In our branches the customer is not typically involved in the choice of attorney/title co. On a purchase, we typically get a title insurance policy, and just work with the title co lined up by the realtor/seller/broker. On a refi where we just need an atty opinion, we typically just order it from one of the approved attorneys that we have provided us good service.
Can we still do that? But then there is zero tolerance, right?
Can we still do that? But then there is zero tolerance, right?
You can pick the provider. These would all be 10% tolerance (not 0%).
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/05/09 10:09 PM
Originally Posted By: Sox in 07
I have been asking that myself, DD, about most of the new changes...
I have what should be a simple ? but I am reading conflicting infromation.
Scenario: LO is charging one point for a rate. The point is included in Block 1 of GFE, and as I understand it, Block 2, box 1 is optional as to whether to disclose that point in block one above. Say we do check it off. With the same deal, the LO is paying all or some of the closing costs. Do we net it out of Block 1, since the instructions say we can't check off more than one box in Block 2?
I have what should be a simple ? but I am reading conflicting infromation.
Scenario: LO is charging one point for a rate. The point is included in Block 1 of GFE, and as I understand it, Block 2, box 1 is optional as to whether to disclose that point in block one above. Say we do check it off. With the same deal, the LO is paying all or some of the closing costs. Do we net it out of Block 1, since the instructions say we can't check off more than one box in Block 2?
As you noted, the instructions state you can only choose one box in Block 2. If the point is in Block 1 and you paying some of the closing costs, you would add up all of the fees the bank is "eating" and put this as a negative number in Block 2 - and mark the second box. You still list the fees in Blocks 3-11 but some/all are offset with the credit in Block 2.
We have an example of just this scenario in our webinar on 11/10. You can find more info here:
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1253206816535
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/05/09 10:12 PM
I have a question about GFE page 1, if at the time the GFE is issued you don't require escrow for the loan, but during the udnerwriting process circustances dictate that you owould now require Escrow. Is this a changed circumstance that woul dpermit you to issue a revised GFE?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/05/09 10:17 PM
It depends on why you now require the escrow. If you just decide to, that would not be a changed circumstance. If the loan is a HPML and you are required to escrow, that would be a changed circumstance. There could be other reasons - like the appraisal comes in lower, a change in programs, etc. - that could constitute a changed circumstance. You can't just change your mind from not escrowing to now wanting one.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/05/09 10:18 PM
Originally Posted By: David Dickinson
[quote=Sox in 07]
We have an example of just this scenario in our webinar on 11/10. You can find more info here:
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1253206816535
We have an example of just this scenario in our webinar on 11/10. You can find more info here:
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1253206816535
Dave,
I am asking this cause this will help determine if I am allowed to order your webinar. What type of compliance guarentee does your presentation come with?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/05/09 10:27 PM
I don't know how to answer that. There is no "guaranty" but I'm sure you'll come away with a lot of information and a better understanding of the requirements. If I was to present this training to you in person, I could "guarantee" you'd get all of your questions answered. Since it is a webinar, there are limitations (no personal contact, etc.) so I'm limited on how I can "guarantee" the training for you.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/05/09 10:43 PM
I understand what you are saying. It is a typical management type question. "Will this training guarentee to bring the bank into compliance with the reg" is like asking to guarentee that myr training for tellers will guarentee they will never violate a reg cc or whatever the reg may be...
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/05/09 10:45 PM
Good point. What's also frustrating is HUD has not answered every question we have (I've been talking to HUD attorney's almost daily) and have contradictions between the regulation and Q&As. Guaranty? Maybe guaranteed to let you understand how messed up this regulation is!
Posted By: Kathleen O. Blanchard
Re: RESPA changes 1-1-10 - 11/05/09 11:34 PM
And how do you guarantee that employees will follow the training 100% of the time?
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 11/05/09 11:51 PM
Okay - I've read this thread from beginning to end - again, and concentrated on all the YSP related items. I just want to see if I am understanding this correctly. This has been a HUGE topic of discussion for us after an ICBA audio conference yesterday. We are scheduled, David, for your conference next week, too. I apologize for the length of this, but the detail is required in order to come to the right answer, I think.
We sell loans to several investors, do FHA, Freddie, etc. We do everything, and we book the loan in our name, and we send a check or wire funds to the title company. The money for funding is the bank's money. We book the loan, then pay if off once we sell, ship the loan to the investor and are funded. This process can take a couple of weeks or more.
We used to lock the rate with the investor early in the process, but had to stop that due to issues of "fall out" and increased costs to the bank from the investor because of "fall out" percentages. Either we lock the rate with the investor before closing or after we've closed the loan, it just depends on the rate at the time. On FHA loans, we usually lock the rate with the investor right before we send it to them to underwrite.
The way I've understood everything for the new rules in this discussion (and in reading current and new RESPA) is that the money we get from the investor is a YSP (above Par). However, we don't have to disclose this on the GFE because it's not "true" table funding (everyone here calls it table funding) under the definition on the GFE since the bank funds the loan.
Is this an accurate statement? If it is, YIPPPEEEE! This would solve a lot of the stress we've all had the last couple of days.
What we were thinking after the conference yesterday is that 1) this is a YSP, 2) we are a broker, 3) we must disclose this YSP in block 1 with a credit in block 2. Well, easy as pie if you know what that is at the time of the GFE, but we never know it that early in the process, and sometimes don't even know it until after we've funded. So, how the heck would you ever be able to accurately disclose in that no tolerance box. You can see why this was a source of some stress.
THANK YOU in advance for walking through this question with me.
We sell loans to several investors, do FHA, Freddie, etc. We do everything, and we book the loan in our name, and we send a check or wire funds to the title company. The money for funding is the bank's money. We book the loan, then pay if off once we sell, ship the loan to the investor and are funded. This process can take a couple of weeks or more.
We used to lock the rate with the investor early in the process, but had to stop that due to issues of "fall out" and increased costs to the bank from the investor because of "fall out" percentages. Either we lock the rate with the investor before closing or after we've closed the loan, it just depends on the rate at the time. On FHA loans, we usually lock the rate with the investor right before we send it to them to underwrite.
The way I've understood everything for the new rules in this discussion (and in reading current and new RESPA) is that the money we get from the investor is a YSP (above Par). However, we don't have to disclose this on the GFE because it's not "true" table funding (everyone here calls it table funding) under the definition on the GFE since the bank funds the loan.
Is this an accurate statement? If it is, YIPPPEEEE! This would solve a lot of the stress we've all had the last couple of days.
What we were thinking after the conference yesterday is that 1) this is a YSP, 2) we are a broker, 3) we must disclose this YSP in block 1 with a credit in block 2. Well, easy as pie if you know what that is at the time of the GFE, but we never know it that early in the process, and sometimes don't even know it until after we've funded. So, how the heck would you ever be able to accurately disclose in that no tolerance box. You can see why this was a source of some stress.
THANK YOU in advance for walking through this question with me.
Posted By: ImGoinNuts
Re: RESPA changes 1-1-10 - 11/06/09 12:08 AM
Originally Posted By: David Dickinson
Originally Posted By: DD Regs
In regards to a Pre Approval. I am kind of thinking this out loud, Would you give a GFE based on what you know at the time of the pre approval application? Technically you do not have enough to be considered an App per RESPA definition "no property".
I've been thinking a lot about preapprovals and RESPA. Here's my thoughts so you can "think" along with me.
1. Preapproval means I've verified the customer fully. The new RESPA rules say I can't ask for any verification from the customer until I issue a GFE.
2. The RESPA FAQs state if I issue a GFE without an identified dwelling and later a dwelling is found, this is NOT a changed circumstance. Therefore, I wouldn't want to issue a GFE until a house is found.
3. #1 & #2 seem to have me caught between a rock and hard place. I can't ask for verification documents until I issue a GFE, but I don't want to issue a GFE until a house is found.
The only option I can come up with is to issue a GFE, so you can request verification documents so you can issue a preapproval. However, you can't reissue a GFE when a house is found unless there is another changed circumstance.
What do you all think?
Quote:
If the borrower does not find a property within 10 days, you would reissue a GFE anyway.
Correct.
Agree with you David - this is the same stance we are taking at this point. Mostly because our customers requesting preapproval also generally request information on approximate cost of the loan (or in some cases - several various loan types). They are shopping during the preapproval process.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/06/09 12:32 PM
Originally Posted By: David Dickinson
It depends on why you now require the escrow. If you just decide to, that would not be a changed circumstance. If the loan is a HPML and you are required to escrow, that would be a changed circumstance. There could be other reasons - like the appraisal comes in lower, a change in programs, etc. - that could constitute a changed circumstance. You can't just change your mind from not escrowing to now wanting one.
This would of course require a new GFE with only the Escrow related charges changed?
Would it be better to train staff to check the escrow required and then later if the customer doesn't need to give them the option to not escrow?
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 11/06/09 01:36 PM
In answer to my VERY long post above in case anyone else is looking for an answer to the same question
I left a message at HUD yesterday afternoon, and I actually got a call back this morning!! Yippee! The representative was VERY nice and VERY helpful! Anyway...his answer...because of how we fund in our name with our own funds, no need to worry about disclosing what we make as a YSP on the GFE! And a sigh of relief fell across the bank!
HUD's number: 202-708-3137 You will get a list of extensions for people who handle the RESPA questions. Anthony handles the callers from TX.
Quote:
Okay - I've read this thread from beginning to end - again, and concentrated on all the YSP related items. I just want to see if I am understanding this correctly...
I left a message at HUD yesterday afternoon, and I actually got a call back this morning!! Yippee! The representative was VERY nice and VERY helpful! Anyway...his answer...because of how we fund in our name with our own funds, no need to worry about disclosing what we make as a YSP on the GFE! And a sigh of relief fell across the bank!
HUD's number: 202-708-3137 You will get a list of extensions for people who handle the RESPA questions. Anthony handles the callers from TX.
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 11/06/09 01:49 PM
Originally Posted By: David Dickinson
Originally Posted By: DD Regs
That is what I don't get about this thing. The intent is to "help the customer make an informed decission" but how can they make an infored decission without a GFE? And what bank wants to issue a GFE w/o the identified dwelling if ading that later is not a changed condition?
Do pre approvals go Bye Bye?
Do pre approvals go Bye Bye?
That's what I'm wondering too.
I think preapprovals do go away. As I've explained it, if you can't prove, I can't approve.
And I can already hear the realtors complaining that none of their customers can get preapprovals. It could be interesting to see how that shakes out.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/06/09 02:23 PM
I am already hearing it from my Mortgage Team. Saying we have to do preapprovals or we will be out of the market.
Posted By: BFaith
Re: RESPA changes 1-1-10 - 11/06/09 02:25 PM
Originally Posted By: David Dickinson
Quote:
If the borrower does not find a property within 10 days, you would reissue a GFE anyway.
Correct.
I don't agree that this is automatically correct. If they don't find a property within 10 days but theyexpress an intent to continue within 10 days, then you can't change the GFE based on the identification of property.
So, if the customer looks at the GFE and says, "Yep, I like what you have to offer, I'll let you know when I find a house", then you're stuck with that GFE regardless of how long it takes them to find one. Correct?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 11/06/09 02:25 PM
Originally Posted By: DD Regs
I am already hearing it from my Mortgage Team. Saying we have to do preapprovals or we will be out of the market.
Right, because we personally make the rules up ourselves, or we personally decided to go along with this program, and no other bank in town will do this.
::sarcasm font::
Posted By: kristin09
Re: RESPA changes 1-1-10 - 11/06/09 03:09 PM
I was at a seminar (I thought) yesterday where the speaker noted that if you reissue a revised GFE, you do not have to wait another 10 business days for the borrower to review the GFE and "shop around".
However in FAQ #12 on page 18, it states that "if a revised GFE is provided due to changed circumstances or a borrower reqquested change, is it necesary to complete Line 2 of the "Important Dates" section on the revised GFE if the shopping period has ended and the borrower has already expressed intent to continue with the application?
Answer: Yes, the loan originator must complete Line 2 in the "Important Dates" section. The date entereed must be at least 10 business days from teh date the revised GFE is provided to the borrower.
Doesn't this mean you have to wait another 10 bus. days when a revised GFE is issued? Therefore, you can never close earlier than 10 business days from a revised GFE issuance?
This doesn't make sense to me.
However in FAQ #12 on page 18, it states that "if a revised GFE is provided due to changed circumstances or a borrower reqquested change, is it necesary to complete Line 2 of the "Important Dates" section on the revised GFE if the shopping period has ended and the borrower has already expressed intent to continue with the application?
Answer: Yes, the loan originator must complete Line 2 in the "Important Dates" section. The date entereed must be at least 10 business days from teh date the revised GFE is provided to the borrower.
Doesn't this mean you have to wait another 10 bus. days when a revised GFE is issued? Therefore, you can never close earlier than 10 business days from a revised GFE issuance?
This doesn't make sense to me.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/06/09 03:20 PM
Originally Posted By: David Dickinson
Originally Posted By: Sox in 07
I have been asking that myself, DD, about most of the new changes...
I have what should be a simple ? but I am reading conflicting infromation.
Scenario: LO is charging one point for a rate. The point is included in Block 1 of GFE, and as I understand it, Block 2, box 1 is optional as to whether to disclose that point in block one above. Say we do check it off. With the same deal, the LO is paying all or some of the closing costs. Do we net it out of Block 1, since the instructions say we can't check off more than one box in Block 2?
I have what should be a simple ? but I am reading conflicting infromation.
Scenario: LO is charging one point for a rate. The point is included in Block 1 of GFE, and as I understand it, Block 2, box 1 is optional as to whether to disclose that point in block one above. Say we do check it off. With the same deal, the LO is paying all or some of the closing costs. Do we net it out of Block 1, since the instructions say we can't check off more than one box in Block 2?
As you noted, the instructions state you can only choose one box in Block 2. If the point is in Block 1 and you paying some of the closing costs, you would add up all of the fees the bank is "eating" and put this as a negative number in Block 2 - and mark the second box. You still list the fees in Blocks 3-11 but some/all are offset with the credit in Block 2.
We have an example of just this scenario in our webinar on 11/10. You can find more info here:
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1253206816535
Thanks David.
Posted By: ahou
Re: RESPA changes 1-1-10 - 11/06/09 03:45 PM
Originally Posted By: kristin09
I was at a seminar (I thought) yesterday where the speaker noted that if you reissue a revised GFE, you do not have to wait another 10 business days for the borrower to review the GFE and "shop around".
However in FAQ #12 on page 18, it states that "if a revised GFE is provided due to changed circumstances or a borrower reqquested change, is it necesary to complete Line 2 of the "Important Dates" section on the revised GFE if the shopping period has ended and the borrower has already expressed intent to continue with the application?
Answer: Yes, the loan originator must complete Line 2 in the "Important Dates" section. The date entereed must be at least 10 business days from teh date the revised GFE is provided to the borrower.
Doesn't this mean you have to wait another 10 bus. days when a revised GFE is issued? Therefore, you can never close earlier than 10 business days from a revised GFE issuance?
This doesn't make sense to me.
However in FAQ #12 on page 18, it states that "if a revised GFE is provided due to changed circumstances or a borrower reqquested change, is it necesary to complete Line 2 of the "Important Dates" section on the revised GFE if the shopping period has ended and the borrower has already expressed intent to continue with the application?
Answer: Yes, the loan originator must complete Line 2 in the "Important Dates" section. The date entereed must be at least 10 business days from teh date the revised GFE is provided to the borrower.
Doesn't this mean you have to wait another 10 bus. days when a revised GFE is issued? Therefore, you can never close earlier than 10 business days from a revised GFE issuance?
This doesn't make sense to me.
You don't have to wait another 10 bus. days if the customer intends to proceed with the terms on the revised GFE. You just have to put the date 10 bus days out from the date you gave them the revised GFE.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/06/09 04:46 PM
Quote:
You don't have to wait another 10 bus. days if the customer intends to proceed with the terms on the revised GFE. You just have to put the date 10 bus days out from the date you gave them the revised GFE.
I agree. In fact, I foresee a lot of GFEs issued at closing because of a change requested by the borrower on that day.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/06/09 04:52 PM
Quote:
This would of course require a new GFE with only the Escrow related charges changed?
Yes. Only the fees affected by the change can be modified on the revised GFE>
Quote:
Would it be better to train staff to check the escrow required and then later if the customer doesn't need to give them the option to not escrow?
I don't think so. I believe the GFE should be your BEST estimate - not an overkill. If there's any doubt, include it, but otherwise, don't say there's a fee you don't think you'll have. To conservatively price up fees will also make your GFE less competitive if they are shopping.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/06/09 04:56 PM
Wait, can we back up the train just a bit here? You're saying that if the borrower requests a change at the closing table (say they decide not to escrow in a case where they do not have to) you HAVE to reissue the GFE? How did I miss that?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 11/06/09 04:58 PM
yeah...
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/06/09 05:02 PM
wow...
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/06/09 05:07 PM
Quote:
I think preapprovals do go away. As I've explained it, if you can't prove, I can't approve.
Quote:
And I can already hear the realtors complaining that none of their customers can get preapprovals. It could be interesting to see how that shakes out.
Originally Posted By: DD Regs
I am already hearing it from my Mortgage Team. Saying we have to do preapprovals or we will be out of the market.
I don't think the industry will allow preapprovals to go away, but it's going to be a challenge for those bankers that do try to provide them.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/06/09 05:08 PM
SERIOUSLY?????!!! But you're not estimating anymore. You're at the closing table. Your estimate was for escrow but at the closing table they're not escrowing. So I have to stop the closing and give them a new ESTIMATE and then go on with the reality of the closing?
omg, this just gets dumber and dumber. I'm so overwhelmed with the stupidity of some of this. Tell me again how this is better for the borrowers?
omg, this just gets dumber and dumber. I'm so overwhelmed with the stupidity of some of this. Tell me again how this is better for the borrowers?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/06/09 05:12 PM
My point is lots of times borrowers request changes on the day of closing or at the closing table. For instance, "I need $5,000 more. Can we do that?" I would reissue a new GFE with the adjusted fees because of the increased loan amount (higher origination fee, etc.) and then issue a Settlement Statement.
My point is this WILL happen and there is no waiting time between the GFE and the closing.
That's not what I'm saying. I'm saying if you don't require an escrow and they don't want it now, I wouldn't issue a new GFE. That's not a tolerance issue and it doesn't affect the GFE from a closing fee issue.
My point is this WILL happen and there is no waiting time between the GFE and the closing.
Quote:
You're saying that if the borrower requests a change at the closing table (say they decide not to escrow in a case where they do not have to) you HAVE to reissue the GFE? How did I miss that?
That's not what I'm saying. I'm saying if you don't require an escrow and they don't want it now, I wouldn't issue a new GFE. That's not a tolerance issue and it doesn't affect the GFE from a closing fee issue.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 11/06/09 05:20 PM
Originally Posted By: Truffle Royale
SERIOUSLY?????!!! But you're not estimating anymore. You're at the closing table. Your estimate was for escrow but at the closing table they're not escrowing. So I have to stop the closing and give them a new ESTIMATE and then go on with the reality of the closing?
omg, this just gets dumber and dumber. I'm so overwhelmed with the stupidity of some of this. Tell me again how this is better for the borrowers?
omg, this just gets dumber and dumber. I'm so overwhelmed with the stupidity of some of this. Tell me again how this is better for the borrowers?
NO NO NO!!!! I wasn't like yeah, yes, it was meant as a :questioning: yeah, what she said.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/06/09 05:28 PM
whew. ok, got it. Thanks, JJ and David.
Oh, and FlamingoGal, thanks for the follow-up. We were facing a mutated version of your question so I'm extremely grateful that you shared HUD's answer.
TGIF...that's all I can say as I continue to muddle through this.
Oh, and FlamingoGal, thanks for the follow-up. We were facing a mutated version of your question so I'm extremely grateful that you shared HUD's answer.
TGIF...that's all I can say as I continue to muddle through this.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/06/09 05:44 PM
Originally Posted By: DD Regs
Originally Posted By: David Dickinson
It depends on why you now require the escrow. If you just decide to, that would not be a changed circumstance. If the loan is a HPML and you are required to escrow, that would be a changed circumstance. There could be other reasons - like the appraisal comes in lower, a change in programs, etc. - that could constitute a changed circumstance. You can't just change your mind from not escrowing to now wanting one.
This would of course require a new GFE with only the Escrow related charges changed?
Would it be better to train staff to check the escrow required and then later if the customer doesn't need to give them the option to not escrow?
Sorry to beat a dead horse, but say we would not require escrow based on what the borrower told us at applicaition.
Then in the underwriting process we discover they are deliquent on their property taxes, so we now say we want them to escrow. Would that be permissible and we issue a revised GFE based on a changed circumstance we did not know at the time we issued the original GFE?
Posted By: Sage
Re: RESPA changes 1-1-10 - 11/06/09 05:45 PM
We have in house appraisers and outside appraisers. AM I right we include the fee in the origination charge if the appraisal is done by the "in house" appraiser but we do not if it is done outside? But neither fee goes in the APR?
Posted By: RobinB
Re: RESPA changes 1-1-10 - 11/06/09 06:45 PM
Originally Posted By: jlroberts
We have a question about Non-RESPA loans as they relate to the new GFE and HUD. An investment/rental property is a Non REPSA loan. We use the GFE and HUD for RESPA and Non RESPA loans. On 01/01/10 we don’t want to be bound to RESPA requirements on a Non RESPA loan but if we use the new documents, it makes the loan look like it is a RESPA loan.
Any ideas/thoughts/suggestions?
Any ideas/thoughts/suggestions?
We are thinking the same way, and don't plan to issue TILs or GFEs on loans "for business purposes" after the first of the year. Not sure about the HUD1s yet.
Posted By: ahou
Re: RESPA changes 1-1-10 - 11/06/09 06:51 PM
Originally Posted By: Sage
We have in house appraisers and outside appraisers. AM I right we include the fee in the origination charge if the appraisal is done by the "in house" appraiser but we do not if it is done outside? But neither fee goes in the APR?
That is correct. 3rd party appraisal fees go in blk 3.
Posted By: RobinB
Re: RESPA changes 1-1-10 - 11/06/09 07:10 PM
Originally Posted By: Compliance Geek
[ If we get sued by the borrower, we would have to argue that the docs didn't really apply to the loan because the loan was commercial. This is the option I like the least.
This would not work with our regulators-- we have already been told that if a disclosure is given it has to be right--regardless of whether we were required to give it at all.
Posted By: jenny123
Re: RESPA changes 1-1-10 - 11/06/09 07:52 PM
1. If the applicant expresses intent to proceed before the GFE expires and the closing does not take place until after the GFE expires, do you have to issue a new GFE? If you are no longer bound by the settlement charges, does that mean that you can change the actual costs because by then you probably would have received the invoice for the appriasal and title work to know the actual costs.
2. Would you have to issue a new GFE within 3 business days after it expires or could you issue it at closing.
The only changed circumstance is that the GFE expired and you now know the actual cost for settlement services.
2. Would you have to issue a new GFE within 3 business days after it expires or could you issue it at closing.
The only changed circumstance is that the GFE expired and you now know the actual cost for settlement services.
Posted By: jenny123
Re: RESPA changes 1-1-10 - 11/06/09 07:58 PM
Same question asked a little differently: If the applicant expresses desire to proceed within the 10 business days, are you bound by those cost unless there is a changed circumstance even if the GFE expires before loan closing.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/06/09 08:01 PM
Originally Posted By: jenny123
1. If the applicant expresses intent to proceed before the GFE expires and the closing does not take place until after the GFE expires, do you have to issue a new GFE? If you are no longer bound by the settlement charges, does that mean that you can change the actual costs because by then you probably would have received the invoice for the appriasal and title work to know the actual costs.
2. Would you have to issue a new GFE within 3 business days after it expires or could you issue it at closing.
The only changed circumstance is that the GFE expired and you now know the actual cost for settlement services.
2. Would you have to issue a new GFE within 3 business days after it expires or could you issue it at closing.
The only changed circumstance is that the GFE expired and you now know the actual cost for settlement services.
1. The borrower has 10 days to decide to proceed after they recieve the GFE. If they express intent to proceed within those 10 days, the fees on the GFE must be honored within the applicable tolerances. If they do not express intent to proceed within the 10 days, you are no longer bound by those terms, and you would issue a new one if they came back to you.
2. If a redisclose is required, you would have 3 days to do it.
Posted By: jsw9880
Re: RESPA changes 1-1-10 - 11/06/09 08:03 PM
Please note that in (2)(i) of the definition of “changed circumstances” in the final rule, which lists the things that changed circumstances do not include, the last phrase is “…unless the information changes or is found to be in accurate after the GFE has been provided.” So….a change in the loan amount or the estimate of the value of the property looks like it could be a changed circumstance if: a) they were relied upon in providing the GFE; and b) they change, or are found to be inaccurate, after the GFE has been provided.
Does that seem like it eliminates the contradiction?
Does that seem like it eliminates the contradiction?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/06/09 08:04 PM
FlamingoGal...thanks for the report back from HUD. To clarify, we use a different term for any premiums paid "post-closing". Obviously, if you close a loan and then lock it to sell...you wouldn't knowo that information. Rather than term it a YSP, we call back-in payments Service Release Premiums (SRP).
I'm not convinced if you lock an above-par rate with an investor prior to closing and KNOW you are going to receive an additional 3% based on the RATE...how you get away with not disclosing it. That puts alot of community banks and broker's out of competition in so many ways.
I'm not convinced if you lock an above-par rate with an investor prior to closing and KNOW you are going to receive an additional 3% based on the RATE...how you get away with not disclosing it. That puts alot of community banks and broker's out of competition in so many ways.
Posted By: Sage
Re: RESPA changes 1-1-10 - 11/06/09 08:19 PM
I know we have to fill in the "TradeOff Table" but do we have to fill in the first column of the "Shopping Cart" too?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/06/09 08:24 PM
Sage-you are only required to fill in the first column of the trade off table-the other 2 are optional. I don't think you are required to fill out the shopping cart.
Posted By: ahou
Re: RESPA changes 1-1-10 - 11/06/09 08:40 PM
That is correct. You don't have to fill out the shopping chart.
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 11/06/09 09:03 PM
Please don't burst my little happy Friday bubble, RR! LOL!
Seriously...PLEASE do help me through thinking this out. I agree that part of the problem is what we call things. I have to dig and dig to find out what we really do regardless of what we call it.
We actually, on some of these relationships, get both a service release premium as well as yield spread premium. Here's what I was told, "We are paid a service release premium for selling the servicing rights. Then, we also receive the difference in the pricing of the rate Freddie is quoting the day we purchase the commitment on the loan and the price we are getting on the note.. For instance, when we price a loan we look at Freddie's pricing sheet and determine how much we think we can make, based on the loan size and the competition. On a $50,000 loan, we may want to get 102% which would be 2% over what we are going to be paid by Freddie. That would be $1,000, plus we would get .25% servicing fee. But on a $300,000 loan we would make almost the same thing if we priced the loan at 100.50%. So, yes we do get a yield spread with Freddie plus a service release premium."
We used to always lock the rate early on in the process with the investor, but then we had a problem with "fall out" which was costing the bank money, so we stopped locking the rate with the investor (we still will sometimes lock with the customer but not the investor). I believe with our FHA, we lock before it goes to underwriting. But, then there are those others that either lock right before or after loan closing.
RESPA doesn't talk, though, about rate locks, etc. for determining whether or not you have to disclose this. It's all about whether or not it's table-funding (this is what the attorney said, and what HUD confirmed to me this morning - HUD said they are getting a lot of questions and this, so it may end up in the FAQ). The new definition of mortgage broker is (emphasis added) "a person (not an employee of a lender) or entity that renders origination services and serves as an intermediary between a borrower and a lender in a transaction involving a federally related mortgage loan, including such a person or entity that closes the loan in its own name in a table funded transaction. "
§3500.2 explains that table funding "means a settlement at which a loan is funded by a contemporaneous advance of loan funds and an assignment of the loan to the person advancing the funds. A table-funded loan is not a secondary market transaction (see 3500.5(b)(7)."
In an earlier post, on page 9, David said, ""table funding" (see the definition in §3500.2) is when the funds aren't yours. If you use your own funds, you are not table funding and you're not a broker." We are closing the loan in our name and using our own funds, therefore, we aren't table funding and don't need to include this in block 1. (Right?)
The gentleman from HUD this morning confirmed this. I can see where, yes, this is going to be a problem for those smaller banks who don't have the funds to structure this the way we do.
I will be so very happy when all of this makes better sense to me, and I don't feel like I'm walking in a constant fog! Please let it be that I can stay in my Friday happy place.
Seriously...PLEASE do help me through thinking this out. I agree that part of the problem is what we call things. I have to dig and dig to find out what we really do regardless of what we call it.
We actually, on some of these relationships, get both a service release premium as well as yield spread premium. Here's what I was told, "We are paid a service release premium for selling the servicing rights. Then, we also receive the difference in the pricing of the rate Freddie is quoting the day we purchase the commitment on the loan and the price we are getting on the note.. For instance, when we price a loan we look at Freddie's pricing sheet and determine how much we think we can make, based on the loan size and the competition. On a $50,000 loan, we may want to get 102% which would be 2% over what we are going to be paid by Freddie. That would be $1,000, plus we would get .25% servicing fee. But on a $300,000 loan we would make almost the same thing if we priced the loan at 100.50%. So, yes we do get a yield spread with Freddie plus a service release premium."
We used to always lock the rate early on in the process with the investor, but then we had a problem with "fall out" which was costing the bank money, so we stopped locking the rate with the investor (we still will sometimes lock with the customer but not the investor). I believe with our FHA, we lock before it goes to underwriting. But, then there are those others that either lock right before or after loan closing.
RESPA doesn't talk, though, about rate locks, etc. for determining whether or not you have to disclose this. It's all about whether or not it's table-funding (this is what the attorney said, and what HUD confirmed to me this morning - HUD said they are getting a lot of questions and this, so it may end up in the FAQ). The new definition of mortgage broker is (emphasis added) "a person (not an employee of a lender) or entity that renders origination services and serves as an intermediary between a borrower and a lender in a transaction involving a federally related mortgage loan, including such a person or entity that closes the loan in its own name in a table funded transaction. "
§3500.2 explains that table funding "means a settlement at which a loan is funded by a contemporaneous advance of loan funds and an assignment of the loan to the person advancing the funds. A table-funded loan is not a secondary market transaction (see 3500.5(b)(7)."
In an earlier post, on page 9, David said, ""table funding" (see the definition in §3500.2) is when the funds aren't yours. If you use your own funds, you are not table funding and you're not a broker." We are closing the loan in our name and using our own funds, therefore, we aren't table funding and don't need to include this in block 1. (Right?)
The gentleman from HUD this morning confirmed this. I can see where, yes, this is going to be a problem for those smaller banks who don't have the funds to structure this the way we do.
I will be so very happy when all of this makes better sense to me, and I don't feel like I'm walking in a constant fog! Please let it be that I can stay in my Friday happy place.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/06/09 09:14 PM
Budge over, Flamingo, I'm sitting right here with you in the Friday Happy Place. (That'll teach Happy not to open the bar. ) Had a meeting with my boss today on YSP/SRP to which I took a printout of your question and answer from HUD. I really don't want to get this all muddled up again.
Now if I could just convince my software provider to let us play with these forms before 1/1. They claim they can't let us because they're not done playing with them yet. How the he** can I figure all this out if I can't do it in my system??!!
) Had a meeting with my boss today on YSP/SRP to which I took a printout of your question and answer from HUD. I really don't want to get this all muddled up again.Now if I could just convince my software provider to let us play with these forms before 1/1. They claim they can't let us because they're not done playing with them yet. How the he** can I figure all this out if I can't do it in my system??!!
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/06/09 09:23 PM
Here is a dumb question-Box 11 on GFE-you list the hazard and flood ins (if any) estimates-do we have to list a company name? We have no idea who they might use, and often times it is a last minute decision on thier end. In the sample completed GFE a company name was listed.
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 11/06/09 09:28 PM
Well, just to throw an additional wrench in there, Truffle, as to why we were also so happy with that answer this morning....one of our mortgage software vendors (we have 2 plus our online) said that their software is not set up for brokers, so if we had to disclose that with the new rules, we would not be able to on that program - that is what the rep told us yesterday. That seems odd to me, but that's what she said.
Not good if you can be in a testing environment yet. I guess I can understand though with the FAQs being constantly updated.
That seems odd to me, but that's what she said.Not good if you can be in a testing environment yet. I guess I can understand though with the FAQs being constantly updated.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/06/09 09:41 PM
My wrench is that we're a bankers' bank. Community banks lock loans with us and we lock them with an investor all on the same day and always before closing. While the banks use their own funds, we act as their loan department and prepare their docs, including the GFE/TIL and HUD. That's the boiled down version, anyway. I was worried how we were going to deal with pricing, etc. I'm taking your answer to mean we don't have to include it for our banks. Please please let it stay that way. 
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/06/09 09:50 PM
Originally Posted By: Sox in 07
Here is a dumb question-Box 11 on GFE-you list the hazard and flood ins (if any) estimates-do we have to list a company name? We have no idea who they might use, and often times it is a last minute decision on thier end. In the sample completed GFE a company name was listed.
Not on the GFE. I don't know why the OTS's forms included "Insure U" on the GFE.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/06/09 09:54 PM
Thanks David!
Posted By: Ninky
Re: RESPA changes 1-1-10 - 11/06/09 09:56 PM
I keep getting error messages on all of the HUD website links. Can anyone direct me to a WORD version of the current settlement cost booklet? We do so few purchase transactions, we think we'll go ahead and reproduce it to print with our other disclosures rather than ordering hard copies.
Thanks for any help.
Thanks for any help.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 11/06/09 10:38 PM
http://www.hud.gov/offices/hsg/ramh/res/stcosmsw.doc
This version is dated 1997. The last page of the RESPA FAQs indicates that HUD is working on revising the booklet. They said they'll post it on their website and publish it in the Federal Register when it is ready.
This version is dated 1997. The last page of the RESPA FAQs indicates that HUD is working on revising the booklet. They said they'll post it on their website and publish it in the Federal Register when it is ready.
Posted By: Ninky
Re: RESPA changes 1-1-10 - 11/06/09 11:19 PM
Thank you Reads Regs. It took a while to download, but looks great. Thank you very much.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 11/07/09 09:56 PM
Does anyone know how this is going to effect the 1098 and reportable points in 2010? If all bank fees are now going to be shown on line 801, then is that the amount we would start reporting on the 1098?
Currently the 1098 instructions read as follows:
Reportable points. Report on Form 1098 points that meet all the following conditions.
1.They are clearly designated on the Uniform Settlement Statement (Form HUD-1) as points; for example, “loan origination fee”
Currently the 1098 instructions read as follows:
Reportable points. Report on Form 1098 points that meet all the following conditions.
1.They are clearly designated on the Uniform Settlement Statement (Form HUD-1) as points; for example, “loan origination fee”
Posted By: Cowboys Fan
Re: RESPA changes 1-1-10 - 11/07/09 10:31 PM
Originally Posted By: jlroberts
Does anyone know how this is going to effect the 1098 and reportable points in 2010? If all bank fees are now going to be shown on line 801, then is that the amount we would start reporting on the 1098?
Posted By: KaEm
Re: RESPA changes 1-1-10 - 11/09/09 03:20 PM
We lend in numerous states and are looking for a good website (or even a 3rd party vendor) that can provide title charges, recording fees, state taxes and notifications of fee schedule changes. Does anyone have any suggestions?
Thanks in advance.
Thanks in advance.
Posted By: jcampbell
Re: RESPA changes 1-1-10 - 11/09/09 04:47 PM
Originally Posted By: Sox in 07
Originally Posted By: jenny123
1. If the applicant expresses intent to proceed before the GFE expires and the closing does not take place until after the GFE expires, do you have to issue a new GFE? If you are no longer bound by the settlement charges, does that mean that you can change the actual costs because by then you probably would have received the invoice for the appriasal and title work to know the actual costs.
2. Would you have to issue a new GFE within 3 business days after it expires or could you issue it at closing.
The only changed circumstance is that the GFE expired and you now know the actual cost for settlement services.
2. Would you have to issue a new GFE within 3 business days after it expires or could you issue it at closing.
The only changed circumstance is that the GFE expired and you now know the actual cost for settlement services.
1. The borrower has 10 days to decide to proceed after they recieve the GFE. If they express intent to proceed within those 10 days, the fees on the GFE must be honored within the applicable tolerances. If they do not express intent to proceed within the 10 days, you are no longer bound by those terms, and you would issue a new one if they came back to you.
2. If a redisclose is required, you would have 3 days to do it.
Sox in 07, is this true? Its causing some confusion for me because the latest FAQ state that if the 10 day period expires, then the originator is permitted to chage "all of the charges and terms": (faq, pg. 16, Imp. Dates, Question #3)
3) Q: What charges can change before the interest rate is locked?
A: With the exception of interest rate-dependent charges and terms, the charges and terms for all settlement services on the GFE must be available for 10 business days from when the GFE is provided, or for such longer period of time as the loan originator provides in item 2 of the ―Important dates‖ section of the GFE. The interest rate-dependent charges and terms cannot change before the expiration of the period indicated by the loan originator in item 1 of the ―Important dates‖ section of the GFE. Between the period of time indicated in item 1 and item 2 of the ―Important dates‖ section, only interest rate-dependent charges may change until the interest rate is locked. After the expiration of the period indicated in item 2 of the ―Important dates‖ section, the loan originator is permitted to change all of the charges and terms on the GFE (assuming that the interest rate is no longer available, as indicated in item 1 of the ―Important dates‖ section).
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/09/09 05:09 PM
Unless I'm missing something (it IS Monday after all) you and Sox are agreeing, jcampbell, so I'm not understanding your question.
Ten days is the MINIMUN amount of time that the GFE is valid for. You could make it longer by putting a different date in 2. as the FAQ you quoted states.
Is that your question or did I miss it by a Monday mile?
Ten days is the MINIMUN amount of time that the GFE is valid for. You could make it longer by putting a different date in 2. as the FAQ you quoted states.
Is that your question or did I miss it by a Monday mile?
Posted By: jcampbell
Re: RESPA changes 1-1-10 - 11/09/09 06:18 PM
Originally Posted By: Truffle Royale
Unless I'm missing something (it IS Monday after all) you and Sox are agreeing, jcampbell, so I'm not understanding your question.
Ten days is the MINIMUN amount of time that the GFE is valid for. You could make it longer by putting a different date in 2. as the FAQ you quoted states.
Is that your question or did I miss it by a Monday mile?
Ten days is the MINIMUN amount of time that the GFE is valid for. You could make it longer by putting a different date in 2. as the FAQ you quoted states.
Is that your question or did I miss it by a Monday mile?
You're right, I should have been more clear.
Sox in 07 said: If they express intent to proceed within those 10 days, the fees on the GFE must be honored within the applicable tolerances.
My question is whether this is true or not because I do not see anything in the final rule or the FAQ that requires honoring fees on the GFE after the expiration of #2 (the 10 days or longer). In fact the FAQ I posted specifically states that the originator is permitted to change the charges. (assuming that the rate is no longer available)
Let me know if I am missing something - like you said, it is Monday.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/09/09 06:30 PM
It looks like you're mixing apples and oranges to me.
Sox is talking about the date listed as number 2 on page 1 of the new GFE. This line refers to '...all other settlement charges....'
Anything to do with rate lock expiration would be the date shown at number 1. Line one specifically goes on to explain that '...the interest rate, some of your loan aorigination charges and the monthly payment...' can change after this date. That does not mean other charges can be changed too.
Sox is talking about the date listed as number 2 on page 1 of the new GFE. This line refers to '...all other settlement charges....'
Anything to do with rate lock expiration would be the date shown at number 1. Line one specifically goes on to explain that '...the interest rate, some of your loan aorigination charges and the monthly payment...' can change after this date. That does not mean other charges can be changed too.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/09/09 06:43 PM
FlamingoGal...I believe that if are the lender (and fund) and subsequently sell to an investor (even if "prearranged"), you don't have to disclose the spread. This makes ZERO sense, because you know you will get it, same as a table-funded transaction...but after closing and prior to sale, it changes to a "secondary-market" transaction and those pricings are not affected.
So...what sense does the trade-off table make in a situation like this...answer THAT for me (other than a buydown, of course)
I guess another situation would be...okay, I want to make 2.75% on this loan request...so I price accordingly. If they want a credit, bump the rate up however much to receive, say a 3.25% total and credit them the 50bp difference.
Still makes no sense that abroker would have to disclose the 2.75% and a "lender" wouldn't.
So...what sense does the trade-off table make in a situation like this...answer THAT for me (other than a buydown, of course)
I guess another situation would be...okay, I want to make 2.75% on this loan request...so I price accordingly. If they want a credit, bump the rate up however much to receive, say a 3.25% total and credit them the 50bp difference.
Still makes no sense that abroker would have to disclose the 2.75% and a "lender" wouldn't.
Posted By: jcampbell
Re: RESPA changes 1-1-10 - 11/09/09 06:43 PM
Its not apples and oranges - Q3 on pg. 16 covers both #1 and #2 of the important dates section.
You're probably correct but if I'm a lender and I have broker GFE without a rate lock, show me where its prohibited to redisclose and change the estimate of other settlement charges after the 10 days.
Like I said, I think you are probably correct but I'm looking for a specific statement in the final rule or the FAQ to support it.
You're probably correct but if I'm a lender and I have broker GFE without a rate lock, show me where its prohibited to redisclose and change the estimate of other settlement charges after the 10 days.
Like I said, I think you are probably correct but I'm looking for a specific statement in the final rule or the FAQ to support it.
Posted By: Sheldon Hendrix
Re: RESPA changes 1-1-10 - 11/09/09 07:54 PM
I have a few questions on the new GFE:
1) We pull a credit report, but do not charge the expense we incur to the borrower? Do we disclose on the new GFE?
2)We charge a standard fee for an attorney's review of title and document preparation (as one single fee). Where does this get disclosed?
1) We pull a credit report, but do not charge the expense we incur to the borrower? Do we disclose on the new GFE?
2)We charge a standard fee for an attorney's review of title and document preparation (as one single fee). Where does this get disclosed?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/09/09 08:24 PM
We have always had a delima on the credit report for in-house loans (not a problem for secondary market). the charge is very small, but isn't set and we have no idea what it is prior to closing a loan. We consider it a part of our loan fee and absorb it. We've never been written up or critized for this...I don't know any other way to handle it.
As far as your second question, that should be a part of the title services fees.
However, if the document preparation is for preparing documents for you, then you are supposed to show that in your origination charges.
As far as your second question, that should be a part of the title services fees.
However, if the document preparation is for preparing documents for you, then you are supposed to show that in your origination charges.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/09/09 08:37 PM
Originally Posted By: jcampbell
Originally Posted By: Truffle Royale
Unless I'm missing something (it IS Monday after all) you and Sox are agreeing, jcampbell, so I'm not understanding your question.
Ten days is the MINIMUN amount of time that the GFE is valid for. You could make it longer by putting a different date in 2. as the FAQ you quoted states.
Is that your question or did I miss it by a Monday mile?
Ten days is the MINIMUN amount of time that the GFE is valid for. You could make it longer by putting a different date in 2. as the FAQ you quoted states.
Is that your question or did I miss it by a Monday mile?
You're right, I should have been more clear.
Sox in 07 said: If they express intent to proceed within those 10 days, the fees on the GFE must be honored within the applicable tolerances.
My question is whether this is true or not because I do not see anything in the final rule or the FAQ that requires honoring fees on the GFE after the expiration of #2 (the 10 days or longer). In fact the FAQ I posted specifically states that the originator is permitted to change the charges. (assuming that the rate is no longer available)
Let me know if I am missing something - like you said, it is Monday.
j-
I am a bit confused by what you are asking-as Truff noted, I think we are saying the same thing. The 10 (or more) days is to allow a borrower to shop. If you give them a GFE today, the costs quoted (other than interest rate related costs if not locked) are available for the borrower to accept (my wording) for 10 days, and if they do intend to proceed, the lender is locked into those fees (per the tolerances). If the customer takes your GFE, does not express any intent to proceed, but comes back 15 days later, you as the lender are not obligated to the fees originally disclosed.
Posted By: dbrunow
Re: RESPA changes 1-1-10 - 11/09/09 09:52 PM
Page 32, Answer 1 of the FAQ states that "using the HUD-1 form does not subject a transaction to coverage under RESPA."
Posted By: Sheldon Hendrix
Re: RESPA changes 1-1-10 - 11/09/09 09:54 PM
Originally Posted By: RR joker
As far as your second question, that should be a part of the title services fees.
However, if the document preparation is for preparing documents for you, then you are supposed to show that in your origination charges.
The fee is actually for both title examination and document preparation for us, so I am torn with what box to put it in - 1 or 4???
Posted By: dbrunow
Re: RESPA changes 1-1-10 - 11/09/09 09:56 PM
Page 10, Answer 1 of the FAQ states "If a borrower does not express an intent to continue with an application within ten business days after the GFE is provided (or such longer time period specified by the loan originator), the loan originator is no longer bound by the GFE."
Does that statement address your question?
Does that statement address your question?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/09/09 10:40 PM
Originally Posted By: dbrunow
Page 10, Answer 1 of the FAQ states "If a borrower does not express an intent to continue with an application within ten business days after the GFE is provided (or such longer time period specified by the loan originator), the loan originator is no longer bound by the GFE."
Does that statement address your question?
Does that statement address your question?
Plus, §3500.7(f) states (my paraphrase) "you must live by what you say on the GFE, unless a revised GFE is provided." IOW, if they come back on day 10 and say "OK, we'd like to go with your loan", you must go with those fees through closing, unless you have a changed circumstance.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/09/09 10:42 PM
Originally Posted By: Compliance Rules
I have a few questions on the new GFE:
1) We pull a credit report, but do not charge the expense we incur to the borrower? Do we disclose on the new GFE?
2)We charge a standard fee for an attorney's review of title and document preparation (as one single fee). Where does this get disclosed?
1) We pull a credit report, but do not charge the expense we incur to the borrower? Do we disclose on the new GFE?
2)We charge a standard fee for an attorney's review of title and document preparation (as one single fee). Where does this get disclosed?
1. Yes. ALL fees go on the GFE. You list the fee in Block 3 and offset in in Block 2.
2. I'm with you - Block 4 or Block 1. Another question that can't be resolved!
I'd email or call HUD to see if you can get an answer. They've got to know about these issues.
Posted By: Compliance Chick
Re: RESPA changes 1-1-10 - 11/09/09 10:53 PM
I have looked on HUD's website and am having trouble finding the phone number or email address to use for a RESPA question.
Can someone help me out?
Can someone help me out?
Posted By: Frank
Re: RESPA changes 1-1-10 - 11/09/09 10:53 PM
the credit report question is a good one. Typically, we don't pass this on to the borrower.
Recent things I've heard relating to this are:
1. The OTS RESPA webinar-the Respa rep made the statement that "if a fee is waived from the beginning, then it's not a charge to the borrower." With this thinking, it would not be disclosed on the GFE or the HUD.
I've got calls out to my regulator to try to get some guidance on this.
Recent things I've heard relating to this are:
1. The OTS RESPA webinar-the Respa rep made the statement that "if a fee is waived from the beginning, then it's not a charge to the borrower." With this thinking, it would not be disclosed on the GFE or the HUD.
I've got calls out to my regulator to try to get some guidance on this.
Posted By: Frank
Re: RESPA changes 1-1-10 - 11/09/09 10:56 PM
HSGRESPA@HUD.GOV
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/09/09 10:57 PM
Originally Posted By: Compliance Chick
I have looked on HUD's website and am having trouble finding the phone number or email address to use for a RESPA question.
Can someone help me out?
Can someone help me out?
Flamingo Gal posted this about 3 pages back:
"HUD's number: 202-708-3137 You will get a list of extensions for people who handle the RESPA questions. "
Posted By: Sheldon Hendrix
Re: RESPA changes 1-1-10 - 11/10/09 03:28 PM
Originally Posted By: David Dickinson
2. I'm with you - Block 4 or Block 1. Another question that can't be resolved!
I'd email or call HUD to see if you can get an answer. They've got to know about these issues.
Sent an email. Whatever response I get back I will share.
FYI - Compliance Coach is offering a free guid to filling out the new forms called "Getting it Right: GFE & HUD1/1A." It includes line by line instructions including the FAQs and regulatory appendixes. I am passing it along to our processors here to use.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/10/09 03:54 PM
I just sent an email in regarding broker vs lender and YSP's known up front. I just can NOT comprehend why one would have to disclose this and one would not...it seems like such a contradiction to me...I wonder if I'll get a coherent response...or one at all!
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/10/09 04:16 PM
Waiting with baited breath for that response, RR.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/10/09 04:25 PM
LOL
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 11/10/09 05:37 PM
Here is the email address where I have successfully sent and received a response: HSGRESPA@hud.gov
Posted By: Em
Re: RESPA changes 1-1-10 - 11/10/09 06:52 PM
Compliance Coach guide is a GOOD one. Thanks for sharing.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 11/10/09 08:25 PM
Originally Posted By: Cowboys Fan
Originally Posted By: jlroberts
Does anyone know how this is going to effect the 1098 and reportable points in 2010? If all bank fees are now going to be shown on line 801, then is that the amount we would start reporting on the 1098?
I just read page 38 - thanks.
I also just downloaded a Guide to Getting it Right GFE and HUD-1/1A document from www.compliancecoach.com/respa and page 27 of that guide states to disclose points on Line 802.
Am I the only one that doesn't understand whether to include the point on line 801 or put it on line 802?
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 11/10/09 08:43 PM
Originally Posted By: dbrunow
Page 32, Answer 1 of the FAQ states that "using the HUD-1 form does not subject a transaction to coverage under RESPA."
Does this apply to the GFE as well?
It's amazing that we read the FAQ over and over (I even do a find) and still overlook what you want to find.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/10/09 08:49 PM
Originally Posted By: jlroberts
Originally Posted By: Cowboys Fan
Originally Posted By: jlroberts
Does anyone know how this is going to effect the 1098 and reportable points in 2010? If all bank fees are now going to be shown on line 801, then is that the amount we would start reporting on the 1098?
I just read page 38 - thanks.
I also just downloaded a Guide to Getting it Right GFE and HUD-1/1A document from www.compliancecoach.com/respa and page 27 of that guide states to disclose points on Line 802.
Am I the only one that doesn't understand whether to include the point on line 801 or put it on line 802?
Discount points are shown on 802. Your origination fee (point) is on line 801. See the Q&A page 38 for an example of how to section this out.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/10/09 09:26 PM
Just downloaded the Compliance Coach Guide. (Thanks for the Heads up).
In th eImportant Dates section of GFE, they say after each line 1-4, you can put NA if it does not apply. In what cases would you have a NA?
In th eImportant Dates section of GFE, they say after each line 1-4, you can put NA if it does not apply. In what cases would you have a NA?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/10/09 09:32 PM
I am waiting for mine DD but that is music to my ears. For me, N/A will be for how long the rate is good for. No way are we going to guarantee any rate (unless they actually lock at that time) at the GFE stage of the game.
Posted By: Sewanee, CRCM
Re: RESPA changes 1-1-10 - 11/10/09 10:08 PM
I've been lurking on this posting, reviewing everything, and I have one question I haven't seen addressed.
Neither the GFE nor the HUD-1 or HUD-1A have signature lines. I've seen in the FAQs that you can have the customer sign a seperate document acknowledging receipt of the GFE. What about the HUD?
Traditionally both buyers and sellers have signed that. Has that changed? If so, can we have a seperate document acknowledging receipt of the HUD?
Thanks for all the good discussion.
____________________________________________
Keep Calm and Carry On
Neither the GFE nor the HUD-1 or HUD-1A have signature lines. I've seen in the FAQs that you can have the customer sign a seperate document acknowledging receipt of the GFE. What about the HUD?
Traditionally both buyers and sellers have signed that. Has that changed? If so, can we have a seperate document acknowledging receipt of the HUD?
Thanks for all the good discussion.
____________________________________________
Keep Calm and Carry On
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/10/09 11:42 PM
I just want to pipe in here and tell David and Jerod thanks so much for the webinar today on how to complete the new GFE and settlement statement. It was excellent.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/11/09 03:23 AM
Thank you pjs. It was a TON of info in a short amount of time. We knew that going in (and the feedback supported our thoughts), but how else do you explain how to complete both forms in less then 2 hours?
Now we have 241 questions to answer from the webinar! We'll be busy for a while.
If anyone was unable to attend the webinar, you can still purchase the CD from the BOL store. You get all of the materials, power point, 3 sample GFE's and Settlement Statements and a written answer to all 241 Q&A's. You can find more info here:
http://www.bankersonline.com/bankerstore/index.php?main_page=product_info&products_id=1963
Now we have 241 questions to answer from the webinar! We'll be busy for a while.
If anyone was unable to attend the webinar, you can still purchase the CD from the BOL store. You get all of the materials, power point, 3 sample GFE's and Settlement Statements and a written answer to all 241 Q&A's. You can find more info here:
http://www.bankersonline.com/bankerstore/index.php?main_page=product_info&products_id=1963
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/11/09 04:06 PM
Originally Posted By: DD Regs
Just downloaded the Compliance Coach Guide. (Thanks for the Heads up).
In th eImportant Dates section of GFE, they say after each line 1-4, you can put NA if it does not apply. In what cases would you have a NA?
In th eImportant Dates section of GFE, they say after each line 1-4, you can put NA if it does not apply. In what cases would you have a NA?
DD- I just got my copy, and I can respond to NA on 1,3 and 4.
1) If a lender does not guarantee a quoted rate being available for any amount of time (unless the customer chooses to lock at that time), NA is allowed.
3) If the customer is not locking at that point in time, this would show as NA
4) If a lender does not require a minimum time to lock prior to closing, it would be NA
My question is on #2-if we need to disclose at least 10 days, why would NA be an option?
Posted By: Tigg
Re: RESPA changes 1-1-10 - 11/11/09 04:56 PM
^^This is good to know!
Now, I see a lot of questions pertaining to purchase loans. I have a couple of questions regarding contructions loans that are covered by RESPA:
1. Is a construction line considered a balloon loan for the purposes of answering the "Summary of your loan" question?
2. Our loan processing software calculates an estimated monthly interest amount based on an initial draw of half the available line. If we use this figure, would we check "yes" on the question "Can your monthly payment can rise even if you pay on time" and then disclose an accrued interest figure for when the line is fully drawn? Or just go ahead and disclose the line as fully drawn to begin with?
Thanks everyone!
Now, I see a lot of questions pertaining to purchase loans. I have a couple of questions regarding contructions loans that are covered by RESPA:
1. Is a construction line considered a balloon loan for the purposes of answering the "Summary of your loan" question?
2. Our loan processing software calculates an estimated monthly interest amount based on an initial draw of half the available line. If we use this figure, would we check "yes" on the question "Can your monthly payment can rise even if you pay on time" and then disclose an accrued interest figure for when the line is fully drawn? Or just go ahead and disclose the line as fully drawn to begin with?
Thanks everyone!
Posted By: Compliance Geek
Re: RESPA changes 1-1-10 - 11/11/09 05:05 PM
Great seminar, David. Thanks for all your work on this mess.
Will a compiled list of the Q&As from the seminar be made available?
Thanks again.
Will a compiled list of the Q&As from the seminar be made available?
Thanks again.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/11/09 05:16 PM
Originally Posted By: Compliance Geek
Great seminar, David. Thanks for all your work on this mess.
Will a compiled list of the Q&As from the seminar be made available?
Thanks again.
Will a compiled list of the Q&As from the seminar be made available?
Thanks again.
Thanks for your kinds words. We have just over 250 questions submitted. However, several of the questions have multiple questions in them (two have 9!). I estimate we have about 750 total Questions to answer! We're working on getting them organized into topics and then will begin answering them today. I HOPE to have them done by the end of next week. We'll email them to BOL and then send all participants will get an email linking you to the Q&As.
Posted By: Will B
Re: RESPA changes 1-1-10 - 11/11/09 11:10 PM
Can someone confirm for me that the provider list is only needed for settlement services listed in GFE Sections 4, 5, and 6 when we require the service but let the customer choose who is going to provide it.
If this is true, then am I correct that we don't need a provider list for owners title insurance since it's not required by the lender.
Also, I've seen some discussion of hazard insurance and flood insurance. They're required, but they don't go in sections 4, 5, or 6. So are they exempt from the provider list requirement?
Thanks.
If this is true, then am I correct that we don't need a provider list for owners title insurance since it's not required by the lender.
Also, I've seen some discussion of hazard insurance and flood insurance. They're required, but they don't go in sections 4, 5, or 6. So are they exempt from the provider list requirement?
Thanks.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/11/09 11:54 PM
1. Maybe I'm missing something, but I don't see where "when we require the service" is listed in the instructions. All items in Blocks 4-6 must have a provider list if you allow the borrower to shop.
2. You do not need to provide a list of recommended providers for insurance. Only Block 4-6 items.
2. You do not need to provide a list of recommended providers for insurance. Only Block 4-6 items.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/12/09 01:51 PM
Originally Posted By: David Dickinson
Thank you pjs. It was a TON of info in a short amount of time. We knew that going in (and the feedback supported our thoughts), but how else do you explain how to complete both forms in less then 2 hours?
Now we have 241 questions to answer from the webinar! We'll be busy for a while.
If anyone was unable to attend the webinar, you can still purchase the CD from the BOL store. You get all of the materials, power point, 3 sample GFE's and Settlement Statements and a written answer to all 241 Q&A's. You can find more info here:
http://www.bankersonline.com/bankerstore/index.php?main_page=product_info&products_id=1963
Now we have 241 questions to answer from the webinar! We'll be busy for a while.
If anyone was unable to attend the webinar, you can still purchase the CD from the BOL store. You get all of the materials, power point, 3 sample GFE's and Settlement Statements and a written answer to all 241 Q&A's. You can find more info here:
http://www.bankersonline.com/bankerstore/index.php?main_page=product_info&products_id=1963
Yes, your're right it was a lot of information in 2 hours. It opened up some peoples' eyes on how important this is that attended it with me- Although I went home with a headache that night- Anyhow- your free 30 days access to the webinar I am taking advantage of and asking more loan people to come and view it. Thanks so much.
Posted By: Carter's Mom
Re: RESPA changes 1-1-10 - 11/12/09 02:34 PM
On a refinance loan without an escrow, am I right in saying that the property tax does not need to be disclosed anywhere on the HUD 1?
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 11/12/09 04:07 PM
On the list of providers that we give to clients, is tehre some kind of disclosure that needs to be on the list?
Posted By: BNKO
Re: RESPA changes 1-1-10 - 11/12/09 05:53 PM
When a lender receives a loan package from a broker who has already provided a GFE, can the lender provide a new GFE, or only a "revised" GFE with those terms and fees that have changed due to a changed circumstance? In other words, are lenders bound to the GFE the broker provides?
Posted By: Will B
Re: RESPA changes 1-1-10 - 11/12/09 05:58 PM
Originally Posted By: David Dickinson
1. Maybe I'm missing something, but I don't see where "when we require the service" is listed in the instructions. All items in Blocks 4-6 must have a provider list if you allow the borrower to shop.
2. You do not need to provide a list of recommended providers for insurance. Only Block 4-6 items.
2. You do not need to provide a list of recommended providers for insurance. Only Block 4-6 items.
1. I didn't think we were required to give a provider list on something like a home inspection if we're not requiring one, but it's in the purchase contract bewteen the buyer and seller. Are you saying that we'd need to give a provider list in those situtations?
2. I was referring specifically to Owner's Title Insurance, which is in Block 5. We don't require the borrower to purchase this except where it's required by state law.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/12/09 06:03 PM
Will-
1)-no-if it is a lender required service that would be a different story
2) Owners title is optional everywhere we lend as well, but they still want it disclosed so the borrower is aware of the cost up front, even if they don't want to purchase it. In either case, we do not allow the borrower to shop for their own.
1)-no-if it is a lender required service that would be a different story
2) Owners title is optional everywhere we lend as well, but they still want it disclosed so the borrower is aware of the cost up front, even if they don't want to purchase it. In either case, we do not allow the borrower to shop for their own.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/12/09 06:32 PM
Originally Posted By: Carter's Mom
On a refinance loan without an escrow, am I right in saying that the property tax does not need to be disclosed anywhere on the HUD 1?
You are correct.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/12/09 06:34 PM
Originally Posted By: ahkcompliance
On the list of providers that we give to clients, is tehre some kind of disclosure that needs to be on the list?
Not by regulation. You may WANT to add a disclaimer indicating you don't endorse the providers, have no relationship with them (if applicable), etc.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/12/09 06:52 PM
Originally Posted By: BNKO
When a lender receives a loan package from a broker who has already provided a GFE, can the lender provide a new GFE, or only a "revised" GFE with those terms and fees that have changed due to a changed circumstance? In other words, are lenders bound to the GFE the broker provides?
This is an area of confusion for me and others. There are several Q&As in the RESPA FAQs you should review.
GFE-General #7 & 16,
GFE-Changed Circumstances #8 i) & xv).
Posted By: Brad B
Re: RESPA changes 1-1-10 - 11/12/09 06:58 PM
Originally Posted By: BNKO
When a lender receives a loan package from a broker who has already provided a GFE, can the lender provide a new GFE, or only a "revised" GFE with those terms and fees that have changed due to a changed circumstance? In other words, are lenders bound to the GFE the broker provides?
3500.7(f) says that you are bound by the broker issued GFE unless you must issue a revised GFE due to a changed circumstance or borrower requested change. The Q&As about "changed circumstances" might help as well (or they may just confuse you).
I understood the speakers at the OTS conference call held this month to essentially say that you are tied to the broker's GFE.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/12/09 07:47 PM
Originally Posted By: David Dickinson
It depends on why you now require the escrow. If you just decide to, that would not be a changed circumstance. If the loan is a HPML and you are required to escrow, that would be a changed circumstance. There could be other reasons - like the appraisal comes in lower, a change in programs, etc. - that could constitute a changed circumstance. You can't just change your mind from not escrowing to now wanting one.
For clarification reasons, it is not just a "we now feel like it" but say we find out during the underwriting process that they have been dilequent on taxes, so we want to make sure that they remain current on taxes while they have an outstanding loan with us, so we now want escrow. Is this a changed circumstance that would justify changing the GFE?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/12/09 08:32 PM
I think it would be, DD. If you discovered that after the GFE was issued, you could do that.
Posted By: dbrunow
Re: RESPA changes 1-1-10 - 11/12/09 08:42 PM
Originally Posted By: jlroberts
Originally Posted By: dbrunow
Page 32, Answer 1 of the FAQ states that "using the HUD-1 form does not subject a transaction to coverage under RESPA."
Does this apply to the GFE as well?
It's amazing that we read the FAQ over and over (I even do a find) and still overlook what you want to find.
I couldn't find anything in the FAQ that says the same thing about the GFE.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/12/09 09:08 PM
The point is that optionally giving any disclosure doesn't make the loan subject to the law/regulation.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/12/09 09:09 PM
Originally Posted By: DD Regs
For clarification reasons, it is not just a "we now feel like it" but say we find out during the underwriting process that they have been delinquent on taxes, so we want to make sure that they remain current on taxes while they have an outstanding loan with us, so we now want escrow. Is this a changed circumstance that would justify changing the GFE?
Good question. My opinion - if you find out they are delinquent on taxes, that is a changed circumstance that allows you to change loan terms, such as requiring an escrow.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/12/09 09:39 PM
Is there a page 2, block 2 expert in the house? This is what has me scratching my head. Looks like most of the guidance is geared towards mortgage brokers, not lenders...I need to know if points in the total of block 1 need to be disclosed in block 2, box one. Also, if a credit is being given for all or some, can we choose to simply subtract form the total in Block one and not clarify in block 2, box 2?
Posted By: Will B
Re: RESPA changes 1-1-10 - 11/12/09 10:20 PM
Originally Posted By: Sox in 07
Will-
1)-no-if it is a lender required service that would be a different story
2) Owners title is optional everywhere we lend as well, but they still want it disclosed so the borrower is aware of the cost up front, even if they don't want to purchase it. In either case, we do not allow the borrower to shop for their own.
1)-no-if it is a lender required service that would be a different story
2) Owners title is optional everywhere we lend as well, but they still want it disclosed so the borrower is aware of the cost up front, even if they don't want to purchase it. In either case, we do not allow the borrower to shop for their own.
Your answer to #1 seems to be in conflict with David's. What is the basis for your conclusion? I agree with you but I realized that I couldn't find anything in the Federal Register or the FAQ that supported my view.
Regarding #2, I agree that we need to disclose an amount in Block 5 even if we don't require owner's title insurance, but I wasn't sure if we needed to list the provider on our provider list. I guess that will be answered based on how we resolve item #1.
Posted By: Will B
Re: RESPA changes 1-1-10 - 11/12/09 10:32 PM
Originally Posted By: Sox in 07
Is there a page 2, block 2 expert in the house? This is what has me scratching my head. Looks like most of the guidance is geared towards mortgage brokers, not lenders...I need to know if points in the total of block 1 need to be disclosed in block 2, box one. Also, if a credit is being given for all or some, can we choose to simply subtract form the total in Block one and not clarify in block 2, box 2?
In a retail loan (no broker) You can choose to include the discount points (charge or credit) in block 1. If you do that you'd check box 1 in block 2 saying that the points are already included in block 1.
As an alternative you can show the points in block 2, which means they would not be included in block 1. When using block 2, if the borrower pays points to get a lower rate you would show this in the third box in block 2. If they receive a credit in exhange for a higher rate you'd use the seccond box in block 2. This is from an ABA phone briefing presentation by Weiner Boedsky Sidman Kider.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/12/09 11:56 PM
Originally Posted By: Will B
Originally Posted By: Sox in 07
Is there a page 2, block 2 expert in the house? This is what has me scratching my head. Looks like most of the guidance is geared towards mortgage brokers, not lenders...I need to know if points in the total of block 1 need to be disclosed in block 2, box one. Also, if a credit is being given for all or some, can we choose to simply subtract form the total in Block one and not clarify in block 2, box 2?
In a retail loan (no broker) You can choose to include the discount points (charge or credit) in block 1. If you do that you'd check box 1 in block 2 saying that the points are already included in block 1.
As an alternative you can show the points in block 2, which means they would not be included in block 1. When using block 2, if the borrower pays points to get a lower rate you would show this in the third box in block 2. If they receive a credit in exhange for a higher rate you'd use the seccond box in block 2. This is from an ABA phone briefing presentation by Weiner Boedsky Sidman Kider.
Sox, For what it is worth, that is the way I understand it too.
Posted By: Jan94
Re: RESPA changes 1-1-10 - 11/13/09 02:35 AM
Originally Posted By: David Dickinson
Originally Posted By: Carter's Mom
On a refinance loan without an escrow, am I right in saying that the property tax does not need to be disclosed anywhere on the HUD 1?
You are correct.
David - is this stated in the Q&A? I'm not finding it. Thanks!
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/13/09 01:11 PM
Originally Posted By: Will B
Originally Posted By: Sox in 07
Will-
1)-no-if it is a lender required service that would be a different story
2) Owners title is optional everywhere we lend as well, but they still want it disclosed so the borrower is aware of the cost up front, even if they don't want to purchase it. In either case, we do not allow the borrower to shop for their own.
1)-no-if it is a lender required service that would be a different story
2) Owners title is optional everywhere we lend as well, but they still want it disclosed so the borrower is aware of the cost up front, even if they don't want to purchase it. In either case, we do not allow the borrower to shop for their own.
Your answer to #1 seems to be in conflict with David's. What is the basis for your conclusion? I agree with you but I realized that I couldn't find anything in the Federal Register or the FAQ that supported my view.
Regarding #2, I agree that we need to disclose an amount in Block 5 even if we don't require owner's title insurance, but I wasn't sure if we needed to list the provider on our provider list. I guess that will be answered based on how we resolve item #1.
I would certainly defer to David, but if the home inspection is not a lender required service, regardless of whether it is in the sales contract, you don't need to provide a list of home inspectors. JMHO
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/13/09 01:23 PM
Originally Posted By: DD Regs
Originally Posted By: Will B
Originally Posted By: Sox in 07
Is there a page 2, block 2 expert in the house? This is what has me scratching my head. Looks like most of the guidance is geared towards mortgage brokers, not lenders...I need to know if points in the total of block 1 need to be disclosed in block 2, box one. Also, if a credit is being given for all or some, can we choose to simply subtract form the total in Block one and not clarify in block 2, box 2?
In a retail loan (no broker) You can choose to include the discount points (charge or credit) in block 1. If you do that you'd check box 1 in block 2 saying that the points are already included in block 1.
As an alternative you can show the points in block 2, which means they would not be included in block 1. When using block 2, if the borrower pays points to get a lower rate you would show this in the third box in block 2. If they receive a credit in exhange for a higher rate you'd use the seccond box in block 2. This is from an ABA phone briefing presentation by Weiner Boedsky Sidman Kider.
Sox, For what it is worth, that is the way I understand it too.
Thanks to both of you. Now to come up with a consistent procedure.
Posted By: dbrunow
Re: RESPA changes 1-1-10 - 11/13/09 02:51 PM
Originally Posted By: Jan94
Originally Posted By: David Dickinson
Originally Posted By: Carter's Mom
On a refinance loan without an escrow, am I right in saying that the property tax does not need to be disclosed anywhere on the HUD 1?
You are correct.
David - is this stated in the Q&A? I'm not finding it. Thanks!
In the instructions for completing the HUD, it says "Lines 901–904. This series is used to record the items which the Lender requires to be paid at the time of settlement..."
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/13/09 03:23 PM
Originally Posted By: Sox in 07
Originally Posted By: DD Regs
Originally Posted By: Will B
Originally Posted By: Sox in 07
Is there a page 2, block 2 expert in the house? This is what has me scratching my head. Looks like most of the guidance is geared towards mortgage brokers, not lenders...I need to know if points in the total of block 1 need to be disclosed in block 2, box one. Also, if a credit is being given for all or some, can we choose to simply subtract form the total in Block one and not clarify in block 2, box 2?
In a retail loan (no broker) You can choose to include the discount points (charge or credit) in block 1. If you do that you'd check box 1 in block 2 saying that the points are already included in block 1.
As an alternative you can show the points in block 2, which means they would not be included in block 1. When using block 2, if the borrower pays points to get a lower rate you would show this in the third box in block 2. If they receive a credit in exhange for a higher rate you'd use the seccond box in block 2. This is from an ABA phone briefing presentation by Weiner Boedsky Sidman Kider.
Sox, For what it is worth, that is the way I understand it too.
Thanks to both of you. Now to come up with a consistent procedure.
Personally I prefer we show them the points in the 3rd box.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/13/09 03:29 PM
Originally Posted By: Jan94
Originally Posted By: David Dickinson
Originally Posted By: Carter's Mom
On a refinance loan without an escrow, am I right in saying that the property tax does not need to be disclosed anywhere on the HUD 1?
You are correct.
David - is this stated in the Q&A? I'm not finding it. Thanks!
No. No where does it say you need to disclose taxes - except in the 1000 series (escrow). It's not that they tell us NOT to disclose it. Rather, it's they don't tell us to disclose it.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/13/09 03:31 PM
Quote:
but if the home inspection is not a lender required service, regardless of whether it is in the sales contract, you don't need to provide a list of home inspectors. JMHO
I agree. Only lender required settlement services & Owner's Title Insurance (whether required or not) are listed on the GFE.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 11/13/09 03:32 PM
For our in-house loans, we do not require title insurance, however they borrower may purchase it. We have never disclosed the fee before, should we start disclosing this on the new GFE?
Posted By: Still Smiling
Re: RESPA changes 1-1-10 - 11/13/09 05:50 PM
David, the webinar was very helpful but I am having trouble with changes circumstance. If I understood correctly, you said that if the loan amount changes by a small amount that it is not a changed circumstance---must be a significant change in the amount. There are many times that we are ready to go to closing and the loan amount changes (usually customer request more $) by a few thousand dollars. Even this small change in loan amount affects the 1200 section of the HUD. It increases the city/county/state tax because the formula is based on loan amount. I am trying to prevent the bank from having to eat this increase; can we provide a revised GFE...hand deliver it and proceed with the closing? Is this considered a changed circumstance? Help is greatly appreciated.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/13/09 06:06 PM
First, you get a 10% tolerance. If the changed amount doesn't throw you out of the 10% tolerance, who cares? You wouldn't be eating this increased fee.
If it's going to change a fee enough that you would have to eat fees, I believe you have a changed circumstance - which allows you to reissue a GFE (even right before closing).
If it's going to change a fee enough that you would have to eat fees, I believe you have a changed circumstance - which allows you to reissue a GFE (even right before closing).
Posted By: Amos
Re: RESPA changes 1-1-10 - 11/13/09 06:35 PM
In Wisconsin, the seller is required to furnish and pay for owner's title insurance. It is not a charge the borrower is likely to incur. Do I have to show anything in Block 5 of the new GFE?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/13/09 06:47 PM
Amos, according to the WBA seminar I attended in April on New Mortgage Lending Laws, we have to put the owners title insurance in the same block just like all the other states do. last I heard, WBA was still contesting this with the Feds but not making any headway.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/13/09 06:57 PM
I agree. This makes no sense, but they've made a special requirement for Owner's TI. It must be listed on the GFE, even if the borrower doesn't typically pay for it. List it on the GFE and HUD-1 and then show the seller paying for it in the 200's of the HUD-1.
Posted By: smith
Re: RESPA changes 1-1-10 - 11/13/09 07:36 PM
I would like to bring up preapprovals again. I think Dave summarized the issue well. However, what can banks do? Can we have a preapproval for Reg. B purposes (verification documentation requested from consumer and approval given) but still not have an application for RESPA (since no property address was received)?
I know RESPA says you can't require verification documentation for the GFE to be given but could you still require it in the case of a preapproval?
I know RESPA says you can't require verification documentation for the GFE to be given but could you still require it in the case of a preapproval?
Posted By: MarieR
Re: RESPA changes 1-1-10 - 11/13/09 07:36 PM
Originally Posted By: MarieR
Originally Posted By: MarieR
In regards to the attorney fees - we have some attorneys that break out their fee neatly for us to pull the doc prep out (for exhibit and/or deed) and some that just have one fee for prepared exhibit for mortgage and title opinion. Do I need to have the fee broken out by the attorney (I think yes) or can I just group it with title services since it is one fee? I think I know the answer, but don't want the attorney battle.
Can I add another question?
Currently our attorney fee is grouped and the doc prep is only a small portion so we do not use it as part of the finance charge. Am I correct in that since we have to break the fee out the doc prep fee that on the HUD it will also be part of line 801 and a finance charge or can we still exclude it from the finance charge? I am so confused anymore!!!
I have reread the thread and I don't see where this was addressed - Can anyone help me with this please? I am trying to figure out what to ask for from our attorneys. Thanks
Posted By: sladd
Re: RESPA changes 1-1-10 - 11/13/09 07:49 PM
I have a question for all- I apologize in advance if this has already been addressed:
I attended a title seminar regarding the new changes and was told the % fee is being eliminated and we can only charge a flat fee? I did not come away after reading the complaince chages with that understanding. I thought that changed circumstances were allowed if the sales price, loan amount or rate changed (we are a builder) but no other fees could be changed? I didn't recall reading anywhere about the one flat fee
Did I miss something?
I attended a title seminar regarding the new changes and was told the % fee is being eliminated and we can only charge a flat fee? I did not come away after reading the complaince chages with that understanding. I thought that changed circumstances were allowed if the sales price, loan amount or rate changed (we are a builder) but no other fees could be changed? I didn't recall reading anywhere about the one flat fee
Did I miss something?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/13/09 07:56 PM
Originally Posted By: MarieR
Originally Posted By: MarieR
Originally Posted By: MarieR
In regards to the attorney fees - we have some attorneys that break out their fee neatly for us to pull the doc prep out (for exhibit and/or deed) and some that just have one fee for prepared exhibit for mortgage and title opinion. Do I need to have the fee broken out by the attorney (I think yes) or can I just group it with title services since it is one fee? I think I know the answer, but don't want the attorney battle.
Can I add another question?
Currently our attorney fee is grouped and the doc prep is only a small portion so we do not use it as part of the finance charge. Am I correct in that since we have to break the fee out the doc prep fee that on the HUD it will also be part of line 801 and a finance charge or can we still exclude it from the finance charge? I am so confused anymore!!!
I have reread the thread and I don't see where this was addressed - Can anyone help me with this please? I am trying to figure out what to ask for from our attorneys. Thanks
Basically, any charges for the attorney to do the closing and be able to obtain title insurance get lumped together into block 4 of the GFE along with the lenders title insurance. I am (for our purposes) taking that to include the closign fee, title exam, doc prep, wire fee, copy fee, etc.
Is the doc prep fee you mention a fee for your institution to prepare the docs or your closing agent to do so? If it is yours, it would be in 801. If it is your closing agents fee, it would be included in 1101 or block 4 of GFE.
Posted By: Amos
Re: RESPA changes 1-1-10 - 11/13/09 08:12 PM
Originally Posted By: David Dickinson
I agree. This makes no sense, but they've made a special requirement for Owner's TI. It must be listed on the GFE, even if the borrower doesn't typically pay for it. List it on the GFE and HUD-1 and then show the seller paying for it in the 200's of the HUD-1.
UUUURRRRGGGGHHHHH!!! How can HUD think anyone would get that this is a special requirement in the way they have written the final rule and the FAQs?
Here's the logic we were using:
First, we are looked at the definition in Regulation X of “Good Faith Estimate,” which is: “Good faith estimate or GFE means an estimate of settlement charges a borrower is likely to incur, as a dollar amount, and related loan information, based upon common practice and experience in the locality of the mortgaged property, as provided on the form prescribed in § 3500.7 and prepared in accordance with the Instructions in Appendix C to this part.” In Wisconsin, the seller is required to furnish and pay for the owner’s title insurance policy. Therefore, a borrower purchasing a property in Wisconsin is not likely to incur a charge for an owner’s title insurance policy, so it would not be disclosed on the GFE…end of discussion…no need to look further at the instructions or FAQs for Block 5.
Posted By: Amos
Re: RESPA changes 1-1-10 - 11/13/09 08:33 PM
HUD No. 09-215
Brian Sullivan
(202) 708-0685 FOR RELEASE
Friday
November 13, 2009
HUD ANNOUNCES RESTRAINT IN RESPA ENFORCEMENT FOR FIRST FOUR MONTHS OF NEW RULE
Aimed at mortgage professionals making good faith effort to comply with new requirements
WASHINGTON - The U.S. Department of Housing and Urban Development (HUD) today announced that for the first four months of 2010, the staff of the Mortgagee Review Board (MRB) will exercise restraint in enforcing new regulatory requirements under the Real Estate Settlement Procedures Act (RESPA), due to take full effect on January 1. The MRB instructed its staff to exercise such restraint in considering an action against FHA-approved lenders who have demonstrated that they are making a good faith effort to comply with RESPA's new requirements.
In addition, HUD is asking other federal and relevant state enforcement agencies to exercise the same 120-day restraint in enforcement for non-FHA originators and other settlement service providers who demonstrate the good faith effort to implement RESPA's new rules. In determining whether a mortgagee has made a good faith effort, MRB staff will consider whether the mortgagee has relied on the new RESPA rule and other written guidance issued by the Department, and the extent to which the mortgagee has made sufficient investment and commitment in technology, training, and quality control designed to comply with the new rule.
"We will work with those who are making an honest effort to work with us as we implement these important new consumer protections," said HUD Secretary Shaun Donovan. "While we will not delay implementation of RESPA's new requirements, we are sensitive to the concerns of the industry as it integrates these new rules into their day-to-day business practices."
On January 1, 2010, HUD will require that lenders and mortgage brokers provide consumers with a standard Good Faith Estimate (GFE) that clearly discloses key loan terms and closing costs. Closing agents will also be required to provide borrowers a new HUD-1 Settlement Statement that clearly compares consumers' final and estimated costs. The new RESPA rule became effective on January 16, 2009, but provided a one-year transition period for the mortgage industry to incorporate these changes. HUD will continue to work with the mortgage industry during this period, including providing a comprehensive set of frequently asked questions (FAQs) on its website.
By improving the disclosures borrowers receive when applying for a mortgage, and by promoting comparison shopping, HUD believes its new RESPA regulation will save consumers an average of nearly $700 in mortgage costs.
Brian Sullivan
(202) 708-0685 FOR RELEASE
Friday
November 13, 2009
HUD ANNOUNCES RESTRAINT IN RESPA ENFORCEMENT FOR FIRST FOUR MONTHS OF NEW RULE
Aimed at mortgage professionals making good faith effort to comply with new requirements
WASHINGTON - The U.S. Department of Housing and Urban Development (HUD) today announced that for the first four months of 2010, the staff of the Mortgagee Review Board (MRB) will exercise restraint in enforcing new regulatory requirements under the Real Estate Settlement Procedures Act (RESPA), due to take full effect on January 1. The MRB instructed its staff to exercise such restraint in considering an action against FHA-approved lenders who have demonstrated that they are making a good faith effort to comply with RESPA's new requirements.
In addition, HUD is asking other federal and relevant state enforcement agencies to exercise the same 120-day restraint in enforcement for non-FHA originators and other settlement service providers who demonstrate the good faith effort to implement RESPA's new rules. In determining whether a mortgagee has made a good faith effort, MRB staff will consider whether the mortgagee has relied on the new RESPA rule and other written guidance issued by the Department, and the extent to which the mortgagee has made sufficient investment and commitment in technology, training, and quality control designed to comply with the new rule.
"We will work with those who are making an honest effort to work with us as we implement these important new consumer protections," said HUD Secretary Shaun Donovan. "While we will not delay implementation of RESPA's new requirements, we are sensitive to the concerns of the industry as it integrates these new rules into their day-to-day business practices."
On January 1, 2010, HUD will require that lenders and mortgage brokers provide consumers with a standard Good Faith Estimate (GFE) that clearly discloses key loan terms and closing costs. Closing agents will also be required to provide borrowers a new HUD-1 Settlement Statement that clearly compares consumers' final and estimated costs. The new RESPA rule became effective on January 16, 2009, but provided a one-year transition period for the mortgage industry to incorporate these changes. HUD will continue to work with the mortgage industry during this period, including providing a comprehensive set of frequently asked questions (FAQs) on its website.
By improving the disclosures borrowers receive when applying for a mortgage, and by promoting comparison shopping, HUD believes its new RESPA regulation will save consumers an average of nearly $700 in mortgage costs.
Posted By: NCBanker
Re: RESPA changes 1-1-10 - 11/13/09 08:54 PM
I would appreciate some feedback on this scenario:
An applicant states that they wish to use Attorney A, who is on our list of providers with an estimated fee of $500. So we disclose $500 on the GFE.
The applicant comes back later and says they changed their mind and want to use Attorney B, who is ALSO on our list of providers with an estimated fee of $700. Is that considered a changed circumstance, allowing us to re-disclose with the higher fee?
Thank you!
An applicant states that they wish to use Attorney A, who is on our list of providers with an estimated fee of $500. So we disclose $500 on the GFE.
The applicant comes back later and says they changed their mind and want to use Attorney B, who is ALSO on our list of providers with an estimated fee of $700. Is that considered a changed circumstance, allowing us to re-disclose with the higher fee?
Thank you!
Posted By: ccman
Re: RESPA changes 1-1-10 - 11/13/09 09:27 PM
At a recent training session on the new rules, the degree of understanding by the speaker and of those in attendance was without question daunting. Nearly one year from the final rule and there still abounds numerous questions regarding the proper completion of the GFE. I would prefer if it was renamed to what it properly has become and that is an "early disclosure". Just don't quite understand the urqency and why HUD can't see fit to slow down and let the industry try to absorb these new rules (News flash: Mortgage Apps at an all time low, lowest since 2000) and worse 48 pages of Q&A trying to explain how a multi-page form with charts and tables is easier for the consumer to understand (The same consumer who did not understand a plain language overdraft fee disclosure). At the same time, the professionals are at a loss to simply understand what goes where. Yea, we'll need that 120 days for sure.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/13/09 09:28 PM
ponder, I would say yes, but would suggest you document their request for the change as a CYA
Posted By: ccman
Re: RESPA changes 1-1-10 - 11/13/09 09:36 PM
Almost forgot,the statement below would not be so bad, if in fact the disclosures were "improved." Not sure who said they would cut costs to save the consumer any money, but am sure it will put a lot of brokers out of business and fewer title cos. maybe that's where it is.
By improving the disclosures borrowers receive when applying for a mortgage, and by promoting comparison shopping, HUD believes its new RESPA regulation will save consumers an average of nearly $700 in mortgage costs.
By improving the disclosures borrowers receive when applying for a mortgage, and by promoting comparison shopping, HUD believes its new RESPA regulation will save consumers an average of nearly $700 in mortgage costs.
Posted By: ccman
Re: RESPA changes 1-1-10 - 11/13/09 09:40 PM
Agreed. If the applicant makes the change, document it.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/13/09 09:43 PM
I think it will cost more-lenders, IMHO will increase some of these lump sum fees as a CYA.
Posted By: hatman
Re: RESPA changes 1-1-10 - 11/13/09 10:54 PM
We typically make the first mortgage payment due 30 days from origination date, therefore there are no odd days. If we don't collect odd days interest at closing, can we leave block 10 blank?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/14/09 07:28 PM
Yes.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/16/09 01:41 PM
I have a question- secondary market loans require a survey- the title company chooses the survey company- the bank does not- would we include an estimate of the survey in with the title fee on the GFE? How would we disclose on the HUD-1 because we get a bill for the survey from the survey company and not the title company. Thanks.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/16/09 01:50 PM
pjs- we are in the same boat and I have recieved differing opinions on where this would be reflected. In our case, since the closing atty orders the survey and pays it (we don't get billed), my thought was to include in 1101/box 4 of gfe which one source agreed with, but another felt it would be on line 801/box 1. In our situation I am leaning towards box 4/1101 since the atty orders it and pays for it-no different than paying for a title search, etc.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/16/09 02:19 PM
I agree with you Sox - I don't see it going into 801- I agree that it should be shown in box 4 on the GFE- and agree with you how you will show it on the HUD-1.
Just not sure how we would show the survey since we get the bill on the HUD-1. Thanks
Just not sure how we would show the survey since we get the bill on the HUD-1. Thanks
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/16/09 02:31 PM
Question, if at the time of application, the applicant has a signed purchase agreement that states clearly what items the seller is paying. Why would we still show them as an expense to the borrower when we have a document that shows it is not going to be due to them?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/16/09 03:01 PM
Originally Posted By: pjs
I have a question- secondary market loans require a survey- the title company chooses the survey company- the bank does not- would we include an estimate of the survey in with the title fee on the GFE? How would we disclose on the HUD-1 because we get a bill for the survey from the survey company and not the title company. Thanks.
This is specifically addressed in the RESPA FAQs (HUD-1 General section). It depends on who requires the fee.
9) Q: Where should the survey fee be disclosed on the HUD-1?
A: The location of the survey fee on the HUD-1 is determined as follows:
(a) if the loan originator required a survey as a condition of the loan and selected the settlement service provider, the charge for the survey must be listed on a blank line in the 800 series in the borrower's column;
(b) if the loan originator required a survey as a condition of the loan and the borrower selected the settlement service provider, the charge for the survey must be listed as part of the total in Line 1301 of the HUD-1 and itemized as applicable;
(c) if a survey was required to issue a lender‘s or owner‘s title insurance policy, the charge for the survey is part of the charge in Line 1101 and must be further itemized if performed by a third party;
(d) if the borrower elected to obtain a survey that was neither required by the loan originator nor required to issue a lender‘s or owner‘s title insurance policy, then the charge is listed in the borrower‘s column on a blank line in the 1300 series.
Although this Q&A discusses the HUD-1, we can use the "logic" to determine the corresponding GFE Block from the answer.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/16/09 03:06 PM
Thanks David.
DD- I thought HUD made it clear that you are to disclose all fees typically paid by the borrower on the GFE - giving in good faith your estimates regardless of whether the seller is paying some of those fees or not. You're not suppose to view the contract when doing the GFE.
Well that's how I read it anyhow.
DD- I thought HUD made it clear that you are to disclose all fees typically paid by the borrower on the GFE - giving in good faith your estimates regardless of whether the seller is paying some of those fees or not. You're not suppose to view the contract when doing the GFE.
Well that's how I read it anyhow.
Posted By: wtsjomh
Re: RESPA changes 1-1-10 - 11/16/09 03:14 PM
I think all of these changes have taken any sense of logic I had....
So would it be line 801 or we include with the title services in that scenario? I apologize if it should be obvious...
Also, in Massachusetts, the seller typically pays all transfer tax (I can't find where it's a "law") so are we exempt from disclosing transfer taxes?
Thank you.
So would it be line 801 or we include with the title services in that scenario? I apologize if it should be obvious...
Also, in Massachusetts, the seller typically pays all transfer tax (I can't find where it's a "law") so are we exempt from disclosing transfer taxes?
Thank you.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/16/09 03:30 PM
wts-the buyer never pays this tax-it is specific for the seller to pay so it is not disclosed. In NH, each party by law pays half of the state tax stamps, so you only disclose the borrower portion.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/16/09 03:38 PM
Originally Posted By: wtsjomh
I think all of these changes have taken any sense of logic I had....
So would it be line 801 or we include with the title services in that scenario? I apologize if it should be obvious...
Also, in Massachusetts, the seller typically pays all transfer tax (I can't find where it's a "law") so are we exempt from disclosing transfer taxes?
Thank you.
So would it be line 801 or we include with the title services in that scenario? I apologize if it should be obvious...
Also, in Massachusetts, the seller typically pays all transfer tax (I can't find where it's a "law") so are we exempt from disclosing transfer taxes?
Thank you.
After reading David's reply regarding survey- it would go in block 6 of GFE and on line 1301 of HUD-1 then we would have to put it in 1302 because we pay the bill.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/16/09 03:39 PM
Originally Posted By: DD Regs
Question, if at the time of application, the applicant has a signed purchase agreement that states clearly what items the seller is paying. Why would we still show them as an expense to the borrower when we have a document that shows it is not going to be due to them?
Good question. Logic tells us the GFE should be as accurate as possible. If you have the purchase agreement, I think you should make the GFE match it. HUD assumes you don't have a purchase agreement yet. Therefore, they say to always list 100% of Owner's TI. I believe, if you know who's paying what, you could justify not listing the seller paid items. If there's any doubt, list it on the GFE.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/16/09 03:44 PM
David-I agree with you that that is how it should be done, but from the 10/23 HUD FAQ's- (page 9-first question under Seller paid items):
Q: If at the time a GFE issued it is known that the seller will pay settlement charges typically paid by the borrower, how are the charges disclosed on the GFE?
A; All charges typically paid by thte borrower must be disclsoed on the GFE regardless of whether the charges will be paid for by the borrower, the seller or other party.
Q: If at the time a GFE issued it is known that the seller will pay settlement charges typically paid by the borrower, how are the charges disclosed on the GFE?
A; All charges typically paid by thte borrower must be disclsoed on the GFE regardless of whether the charges will be paid for by the borrower, the seller or other party.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/16/09 03:46 PM
That's confusing because I thought what Sox is saying.
I can see what David is saying if at the time of the GFE the borrower is not going to shop and it going with us.
I thought this whole new GFE and HUD was to make sure the borrower knew what costs were upfront and to go shopping.
I can see what David is saying if at the time of the GFE the borrower is not going to shop and it going with us.
I thought this whole new GFE and HUD was to make sure the borrower knew what costs were upfront and to go shopping.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/16/09 03:52 PM
Originally Posted By: Sox in 07
David-I agree with you that that is how it should be done, but from the 10/23 HUD FAQ's- (page 9-first question under Seller paid items):
Q: If at the time a GFE issued it is known that the seller will pay settlement charges typically paid by the borrower, how are the charges disclosed on the GFE?
A; All charges typically paid by the borrower must be disclosed on the GFE regardless of whether the charges will be paid for by the borrower, the seller or other party.
Q: If at the time a GFE issued it is known that the seller will pay settlement charges typically paid by the borrower, how are the charges disclosed on the GFE?
A; All charges typically paid by the borrower must be disclosed on the GFE regardless of whether the charges will be paid for by the borrower, the seller or other party.
I know and it appears I'm talking out of both sides of my mouth. You can certainly list the fees as this Q&A states and you'd never have any regulatory issues. But I believe you'd have customer service issues and borrower confusion. As of now (that's a disclaimer!) I believe you could back up not listing a fee because the purchase agreement states the seller will pay for it - if you have the purchase agreement.
I might be wrong, but it just seems wrong to list a fee you know they won't be paying.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/16/09 04:00 PM
David I completely agree. If a contract is specific with an amount or specific fee the seller is agreeing to pay, it should be noted as such. The current GFE allows a lender to list costs and take out those paid by others. If their intent was to make sure lenders were consistent with fees and terms, they should have simply "freshend up" the GFE and enforced current regulations.
I know we run the risk of having seemingly higher costs if we don't reflect the seller paids and the guy down the street does. However, if the intent of this is to allow borrowers to shop and compare apples to apples, it seems to me that they want worst case scenario disclosed by all lenders and if one does and one doesn't it defeats the purpose. JMHO
I know we run the risk of having seemingly higher costs if we don't reflect the seller paids and the guy down the street does. However, if the intent of this is to allow borrowers to shop and compare apples to apples, it seems to me that they want worst case scenario disclosed by all lenders and if one does and one doesn't it defeats the purpose. JMHO
Posted By: Carter's Mom
Re: RESPA changes 1-1-10 - 11/16/09 04:17 PM
I sat in on a teleconference on Thursday. They stated that the GFE had to be provided to each borrower/applicant. I can't find this anywhere. Am I just missing it?
Posted By: Carter's Mom
Re: RESPA changes 1-1-10 - 11/16/09 04:52 PM
Originally Posted By: azbanker
Carter's Mom,
Laser pro is calculating 1/2 like on the pre til. It is also saying no balloon. On a 12 month interest only construction loan, it looks like 12 payments of 1/2 interest would pay it off...very confusing for the customer. Laser Pro is looking in to whether this is compliant.
Laser pro is calculating 1/2 like on the pre til. It is also saying no balloon. On a 12 month interest only construction loan, it looks like 12 payments of 1/2 interest would pay it off...very confusing for the customer. Laser Pro is looking in to whether this is compliant.
AZBanker. Did you ever hear back from Laser Pro on this. Are you going to calculate your interest payments on 1/2 of the balance similar to the pre til?
Posted By: GoBigRed
Re: RESPA changes 1-1-10 - 11/16/09 06:41 PM
Originally Posted By: smith
I would like to bring up preapprovals again. I think Dave summarized the issue well. However, what can banks do? Can we have a preapproval for Reg. B purposes (verification documentation requested from consumer and approval given) but still not have an application for RESPA (since no property address was received)?
I know RESPA says you can't require verification documentation for the GFE to be given but could you still require it in the case of a preapproval?
I know RESPA says you can't require verification documentation for the GFE to be given but could you still require it in the case of a preapproval?
We are struggling with the same question. If we continue to do preapprovals based on borrower provided documentation, will we somehow violate RESPA?
Posted By: sladd
Re: RESPA changes 1-1-10 - 11/16/09 06:49 PM
I have a question for all- I apologize in advance if this has already been addressed:
I attended a title seminar regarding the new changes and was told the % fee is being eliminated and we can only charge a flat fee? I did not come away after reading the complaince chages with that understanding. I thought that changed circumstances were allowed if the sales price, loan amount or rate changed (we are a builder) but no other fees could be changed? I didn't recall reading anywhere about the one flat fee
Did I miss something?
I attended a title seminar regarding the new changes and was told the % fee is being eliminated and we can only charge a flat fee? I did not come away after reading the complaince chages with that understanding. I thought that changed circumstances were allowed if the sales price, loan amount or rate changed (we are a builder) but no other fees could be changed? I didn't recall reading anywhere about the one flat fee
Did I miss something?
Posted By: Raquel
Re: RESPA changes 1-1-10 - 11/16/09 07:11 PM
Would the same line of thinking apply to charges paid by lender? For example, the only fee "typically paid" by the borrower for a home equity line product is an origination fee. All other fees associated with the transaction are absorbed by the lender. The questions in the Q&A's that address fees paid by seller or other third party seem to indicate that lender-paid fees be reflected on the GFE and HUD with a credit being given. To have to disclose fees that a borrower will not have to pay for "shopping" purposes seems like it would be confusing to the borrower. The only time the borrower is required to pay third party fees is if the lender has paid the fees on behalf of the borrower within the preceding 3 years.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/16/09 07:24 PM
Originally Posted By: Raquel
Would the same line of thinking apply to charges paid by lender? For example, the only fee "typically paid" by the borrower for a home equity line product is an origination fee. All other fees associated with the transaction are absorbed by the lender. The questions in the Q&A's that address fees paid by seller or other third party seem to indicate that lender-paid fees be reflected on the GFE and HUD with a credit being given. To have to disclose fees that a borrower will not have to pay for "shopping" purposes seems like it would be confusing to the borrower. The only time the borrower is required to pay third party fees is if the lender has paid the fees on behalf of the borrower within the preceding 3 years.
The rules are pretty clear that you still list the fees that the lender will pay for and then put a credit in Block 2 of the GFE/802 of the HUD-1/1A.
In the case of ‘‘no cost’’ loans where ‘‘no cost’’ encompasses third party fees as well as the upfront payment to the loan originator, the third party services covered by the ‘‘no cost’’ provisions must be itemized and listed in the borrower’s column on the HUD–1/1A with the charge for the third party service. These itemized charges must be offset with a negative adjusted origination charge on Line 803 and recorded in the columns.
Also, here's some info from the FAQs:
The standardized GFE form does not allow information to be included on any part of those totals that would be paid outside of closing. Such information would not help borrowers to shop for loans and would not facilitate comparison of the charges on the GFE with the charges on the HUD-1.[/i] [RESPA FAQ – GFE General #13]
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/16/09 07:37 PM
Originally Posted By: Sox in 07
David I completely agree. If a contract is specific with an amount or specific fee the seller is agreeing to pay, it should be noted as such. The current GFE allows a lender to list costs and take out those paid by others. If their intent was to make sure lenders were consistent with fees and terms, they should have simply "freshend up" the GFE and enforced current regulations.
I know we run the risk of having seemingly higher costs if we don't reflect the seller paids and the guy down the street does. However, if the intent of this is to allow borrowers to shop and compare apples to apples, it seems to me that they want worst case scenario disclosed by all lenders and if one does and one doesn't it defeats the purpose. JMHO
I know we run the risk of having seemingly higher costs if we don't reflect the seller paids and the guy down the street does. However, if the intent of this is to allow borrowers to shop and compare apples to apples, it seems to me that they want worst case scenario disclosed by all lenders and if one does and one doesn't it defeats the purpose. JMHO
I'm going to reverse what I said earlier (about not listing Owner's TI because you already have the purchase agreement). HUD doesn't seem to care what the facts are.
Q: If a seller typically pays for the Block 5, Owner‘s title insurance, does the charge still have to be shown on the GFE?
A: Yes, an estimate of the cost must be shown in Block 5, Owner‘s title insurance for all purchase transactions regardless of who is selecting or paying for it.
FAQ – GFE Block 5 #2
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/16/09 07:39 PM
I disagree about the subject of the sales contract when it lists seller paying up to 3% closing costs, etc. It seems clear (as mud) that HUD intends for us to list everything...regardless...that a buyer "might" pay. I wonder if this is because it's typical for the sales price to be adjusted by said "3%" to cover the seller's cost and this was intended to give the buyer an idea of the real deal?
Who knows.
I figure you show everything, then provide a means for the buyer to know how much of that the seller will actually pay. It's similar to the falacy that they didn't include a space for the total PITI to be shown. Many, many problems with the form.
One I found earlier will affect our construction loans. Often they are done at P+ and can change DAILY...The wording on the GFE doesn't really afford us a way to state that. It could have, but instead they say "The first change will be in...." well, you could say in "one" day, I suppose, buy that sounds like it WILL change and it may NEVER change...not friendly for in-house lending...period.
Who knows.
I figure you show everything, then provide a means for the buyer to know how much of that the seller will actually pay. It's similar to the falacy that they didn't include a space for the total PITI to be shown. Many, many problems with the form.
One I found earlier will affect our construction loans. Often they are done at P+ and can change DAILY...The wording on the GFE doesn't really afford us a way to state that. It could have, but instead they say "The first change will be in...." well, you could say in "one" day, I suppose, buy that sounds like it WILL change and it may NEVER change...not friendly for in-house lending...period.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/16/09 07:43 PM
Quote:
We are struggling with the same question. If we continue to do preapprovals based on borrower provided documentation, will we somehow violate RESPA?
You can't ask the borrower to bring in any documentation, so how can you continue to do preapprovals "based on borrower provided documentation"? Please provide details or a scenario.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/16/09 07:49 PM
Originally Posted By: RR joker
I disagree about the subject of the sales contract when it lists seller paying up to 3% closing costs, etc. It seems clear (as mud) that HUD intends for us to list everything...regardless...that a buyer "might" pay. I wonder if this is because it's typical for the sales price to be adjusted by said "3%" to cover the seller's cost and this was intended to give the buyer an idea of the real deal?
Who knows.
I figure you show everything, then provide a means for the buyer to know how much of that the seller will actually pay. It's similar to the falacy that they didn't include a space for the total PITI to be shown. Many, many problems with the form.
One I found earlier will affect our construction loans. Often they are done at P+ and can change DAILY...The wording on the GFE doesn't really afford us a way to state that. It could have, but instead they say "The first change will be in...." well, you could say in "one" day, I suppose, buy that sounds like it WILL change and it may NEVER change...not friendly for in-house lending...period.
Who knows.
I figure you show everything, then provide a means for the buyer to know how much of that the seller will actually pay. It's similar to the falacy that they didn't include a space for the total PITI to be shown. Many, many problems with the form.
One I found earlier will affect our construction loans. Often they are done at P+ and can change DAILY...The wording on the GFE doesn't really afford us a way to state that. It could have, but instead they say "The first change will be in...." well, you could say in "one" day, I suppose, buy that sounds like it WILL change and it may NEVER change...not friendly for in-house lending...period.
RR-I think they are simply trying (I stress trying) to give a borrower the worst case scenario up front. I think it is short sigthed for the form not to have an area to account for seller paids. The lender can reduce their costs in box 1 with little or no explanation, nor do we need to spell out what that number covers. Makes no sense.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/16/09 09:06 PM
Oh, I totally agree...Sox...I don't think you can do what David has elluded to is all.
anyone care to take a gander on the rests of the story noted below?
One I found earlier will affect our construction loans. Often they are done at P+ and can change DAILY...The wording on the GFE doesn't really afford us a way to state that. It could have, but instead they say "The first change will be in...." well, you could say in "one" day, I suppose, buy that sounds like it WILL change and it may NEVER change...not friendly for in-house lending...period.
anyone care to take a gander on the rests of the story noted below?
One I found earlier will affect our construction loans. Often they are done at P+ and can change DAILY...The wording on the GFE doesn't really afford us a way to state that. It could have, but instead they say "The first change will be in...." well, you could say in "one" day, I suppose, buy that sounds like it WILL change and it may NEVER change...not friendly for in-house lending...period.
Posted By: Princess Romeo
Re: RESPA changes 1-1-10 - 11/16/09 11:07 PM
FWIW - I know of two community type banks that have made the decision that they will no longer offer closed-end consumer loans secured by 1-4 family RE.
They feel they simply do not have the resources or staff to gear up for the disclosures and training required to understand how to comply with all of the changes. The looked at the costs to gear up for compliance and determined it would far outweigh any potential profit.
They didn't do a whole lot of these loans to begin with, but it is sad to realize that regulatory burden has just forced two community focused lenders out of the market.
They are waiting to see what happens with HELOC disclosures next to decide if they can even continue to offer that product.
They feel they simply do not have the resources or staff to gear up for the disclosures and training required to understand how to comply with all of the changes. The looked at the costs to gear up for compliance and determined it would far outweigh any potential profit.
They didn't do a whole lot of these loans to begin with, but it is sad to realize that regulatory burden has just forced two community focused lenders out of the market.
They are waiting to see what happens with HELOC disclosures next to decide if they can even continue to offer that product.
Posted By: Weeble Woman
Re: RESPA changes 1-1-10 - 11/17/09 12:40 AM
If I accept an application in December 2009 and use the current GFE, which GFE do I use if I need to redisclose after January 2010? Thanks for any and all replies, and I apologize if this has already been addressed and I couldn't find it.
Posted By: Sheldon Hendrix
Re: RESPA changes 1-1-10 - 11/17/09 02:30 AM
You would redisclose with the new GFE, and they would receive a new HUD1/1A. If you did not redisclose, then they would need to be issued an old HUD1/1A.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/17/09 02:09 PM
I believe a prior post by David (I think) said if you start with the old you end with the old...even if you go past 2010. However, you can switch if you want to.
David, please correct me if I am wrong!
David, please correct me if I am wrong!
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/17/09 02:16 PM
RR-you are correct.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/17/09 02:23 PM
whew...I'm beginning to question myself at times...I'm due in 30 minutes for my first of two training sessions on this...yikes! This is soooooooo nooooooooooooot funnnnnn!
Apparently HUD is overwhelmed too...still no new updates on the Q&A since 10-22? If David's webinar and the questions rolling in from it are any indicator...I'm guessing the powers that be at HUD are deluged by now!
Apparently HUD is overwhelmed too...still no new updates on the Q&A since 10-22? If David's webinar and the questions rolling in from it are any indicator...I'm guessing the powers that be at HUD are deluged by now!
Posted By: Princess Romeo
Re: RESPA changes 1-1-10 - 11/17/09 04:13 PM
Originally Posted By: RR joker
Apparently HUD is overwhelmed too...still no new updates on the Q&A since 10-22? If David's webinar and the questions rolling in from it are any indicator...I'm guessing the powers that be at HUD are deluged by now!
As well they should be for this byzantine mess of disclosure rules. I understand the intent here - let's face it, there are PLENTY of slimy folks in the mortgage industry who FOCUSED on luring people in with disclosures of low-ball rates and rock bottom fees....UNTIL the signing of the actual loan docs when "sticker shock" would set in because almost all of the fees were much higher than what was originally disclosed. Yeah, the old bait and switch.
But rather than focusing enforcement efforts to go after the minority of bad apples, HUD tries to come up with a set of rules to close all loopholes which instead will only serve to strangle the availability of credit from legitimate lenders - meanwhile the slime-bags will still find a way to ply their trade unabated.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 11/17/09 04:14 PM
Originally Posted By: David Dickinson
Originally Posted By: Sox in 07
David-I agree with you that that is how it should be done, but from the 10/23 HUD FAQ's- (page 9-first question under Seller paid items):
Q: If at the time a GFE issued it is known that the seller will pay settlement charges typically paid by the borrower, how are the charges disclosed on the GFE?
A; All charges typically paid by the borrower must be disclosed on the GFE regardless of whether the charges will be paid for by the borrower, the seller or other party.
Q: If at the time a GFE issued it is known that the seller will pay settlement charges typically paid by the borrower, how are the charges disclosed on the GFE?
A; All charges typically paid by the borrower must be disclosed on the GFE regardless of whether the charges will be paid for by the borrower, the seller or other party.
I know and it appears I'm talking out of both sides of my mouth. You can certainly list the fees as this Q&A states and you'd never have any regulatory issues. But I believe you'd have customer service issues and borrower confusion. As of now (that's a disclaimer!) I believe you could back up not listing a fee because the purchase agreement states the seller will pay for it - if you have the purchase agreement.
I might be wrong, but it just seems wrong to list a fee you know they won't be paying.
I agree with David. The problem becomes that typical does not mean exclusive. If you know your seller will pay the fee, and something happens where the seller will not be paying the fee, I think you are going to have a difficult time explaining why this is a changed circumstance that you did not know, to reissue a GFE.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/17/09 04:19 PM
Originally Posted By: Princess Rooney
Originally Posted By: RR joker
Apparently HUD is overwhelmed too...still no new updates on the Q&A since 10-22? If David's webinar and the questions rolling in from it are any indicator...I'm guessing the powers that be at HUD are deluged by now!
As well they should be for this byzantine mess of disclosure rules. I understand the intent here - let's face it, there are PLENTY of slimy folks in the mortgage industry who FOCUSED on luring people in with disclosures of low-ball rates and rock bottom fees....UNTIL the signing of the actual loan docs when "sticker shock" would set in because almost all of the fees were much higher than what was originally disclosed. Yeah, the old bait and switch.
But rather than focusing enforcement efforts to go after the minority of bad apples, HUD tries to come up with a set of rules to close all loopholes which instead will only serve to strangle the availability of credit from legitimate lenders - meanwhile the slime-bags will still find a way to ply their trade unabated.
Stands up and applauds.
Comp Dat-I am not sure based on your comment that you agree with David or not-if you reduce fees based on the seller agreeing to pay them and they end up not paying, are you saying that may not meet a "changed circumstance"?
My reading of that FAQ is very clear-not a grey area IMHO.
Posted By: QCL
Re: RESPA changes 1-1-10 - 11/17/09 04:21 PM
Originally Posted By: RR joker
whew...I'm beginning to question myself at times...I'm due in 30 minutes for my first of two training sessions on this...yikes! This is soooooooo nooooooooooooot funnnnnn!
Apparently HUD is overwhelmed too...still no new updates on the Q&A since 10-22? If David's webinar and the questions rolling in from it are any indicator...I'm guessing the powers that be at HUD are deluged by now!
Apparently HUD is overwhelmed too...still no new updates on the Q&A since 10-22? If David's webinar and the questions rolling in from it are any indicator...I'm guessing the powers that be at HUD are deluged by now!
I was on that call too
David, when/where will you be issuing the Q&As? Mostly wondering the where since I think it'll take a while to get through them.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 11/17/09 04:32 PM
Sox, no fees were reduced. Let me clarify. I am saying that I believe you have safe harbor for owners TI (at least in my state) because it would be very abnormal for a buyer to pay these fees. So, lets say you know the seller will be paying for this up front and issue a GFE not listing owners TI. However the seller kicks and screams and the buyer agrees to pay. An examiner should have the intution to question, how the new fee was put on the GFE and why you really didn't know about this. (provided you reissue a GFE). So yes, I do agree with David and I do believe in some (very limited) cases you can not put fees paid by the seller (go back to the pages in the 30s where David and I have a very deep conversation about this in this thread), however it can become a real issue, and one that I feel is not easily defensible if an examiner wants to take issue with it as a changed circumstance.
Posted By: CompDat
Re: RESPA changes 1-1-10 - 11/17/09 04:36 PM
Wow Sox I totally apologize. I did not realize that HUD had issued a new Q&A and this was answered. I also see that David now agrees with my original statement back in October that Owners TI should be listed on the GFE. I had not kept up on this as much lately do to finalizing the new Reg. GG issues. My apologies.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/17/09 04:36 PM
I guess I would say unless the law says the seller pays a fee, it should be disclosed. There is no guarantee the buyer is even going to want Owners Title, but it still needs to be disclosed. I would also be concerned about consistency in disclosing. JMHO
(edited to add-this was posted before I saw compdats reply above)
(edited to add-this was posted before I saw compdats reply above)
Posted By: CompDat
Re: RESPA changes 1-1-10 - 11/17/09 04:38 PM
I retracted my statement above.
Posted By: BNKO
Re: RESPA changes 1-1-10 - 11/17/09 06:09 PM
I've been studying the sample GFE/HUD-1 that the OTS provided in their conference call and I'm REALLY confused.
On the GFE, in block 6, they have a total charge of $295.00. On the HUD-1, line 1301, they have a total charge of $270.00. On page 3 of the HUD-1, in the 10% tolerance box, there is no line 1301. I thought block 6 had a 10% tolerance? Why wouldn't this total charge be listed in the comparison box? Is it because the fee went down from $295.00 to $270.00?
Also, would homeowners association fees not be listed on the GFE but listed on line 1304 on the HUD-1?
On the GFE, in block 6, they have a total charge of $295.00. On the HUD-1, line 1301, they have a total charge of $270.00. On page 3 of the HUD-1, in the 10% tolerance box, there is no line 1301. I thought block 6 had a 10% tolerance? Why wouldn't this total charge be listed in the comparison box? Is it because the fee went down from $295.00 to $270.00?
Also, would homeowners association fees not be listed on the GFE but listed on line 1304 on the HUD-1?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/17/09 06:36 PM
Originally Posted By: BNKO
I've been studying the sample GFE/HUD-1 that the OTS provided in their conference call and I'm REALLY confused.
On the GFE, in block 6, they have a total charge of $295.00. On the HUD-1, line 1301, they have a total charge of $270.00. On page 3 of the HUD-1, in the 10% tolerance box, there is no line 1301. I thought block 6 had a 10% tolerance? Why wouldn't this total charge be listed in the comparison box? Is it because the fee went down from $295.00 to $270.00?
Also, would homeowners association fees not be listed on the GFE but listed on line 1304 on the HUD-1?
On the GFE, in block 6, they have a total charge of $295.00. On the HUD-1, line 1301, they have a total charge of $270.00. On page 3 of the HUD-1, in the 10% tolerance box, there is no line 1301. I thought block 6 had a 10% tolerance? Why wouldn't this total charge be listed in the comparison box? Is it because the fee went down from $295.00 to $270.00?
Also, would homeowners association fees not be listed on the GFE but listed on line 1304 on the HUD-1?
BNKO-
I have that same presentation, and it shows the $270 in block 6, not $295. You are correct in noting it isn't shown in the sample HUD, page 3. I don't recall if that oversight was mentioned during the call.
As for HOA, it would not show on the GFE, and any proration at closing would be handled on page one as it is now.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/17/09 06:40 PM
Those OTS GFE and HUD-1 have some errors in them. David pointed that out in the webinar.
On the GFE, can you put the loan officer's email address or does it have to be the bank's email address. Thanks
On the GFE, can you put the loan officer's email address or does it have to be the bank's email address. Thanks
Posted By: smith
Re: RESPA changes 1-1-10 - 11/17/09 06:54 PM
Originally Posted By: David Dickinson
Quote:
We are struggling with the same question. If we continue to do preapprovals based on borrower provided documentation, will we somehow violate RESPA?
You can't ask the borrower to bring in any documentation, so how can you continue to do preapprovals "based on borrower provided documentation"? Please provide details or a scenario.
Okay--say we have procedures that state "for preapproval purposes only" we need XYZ information. RESPA states "the final rule specifically prohibits the loan originator from requiring an applicant, AS A CONDITION FOR PROVIDING A GFE, to submit supplemental documentation..." Can't you argue that you are obtaining the information for "preapproval purposes only" and not as a condition for providing the GFE? I know that might not be a strong argument but how can you do away with preapprovals? Don't most realtors want that before writing a contract to sell a house?
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/17/09 06:56 PM
Originally Posted By: RR joker
whew...I'm beginning to question myself at times...I'm due in 30 minutes for my first of two training sessions on this...yikes! This is soooooooo nooooooooooooot funnnnnn!
Apparently HUD is overwhelmed too...still no new updates on the Q&A since 10-22? If David's webinar and the questions rolling in from it are any indicator...I'm guessing the powers that be at HUD are deluged by now!
Apparently HUD is overwhelmed too...still no new updates on the Q&A since 10-22? If David's webinar and the questions rolling in from it are any indicator...I'm guessing the powers that be at HUD are deluged by now!
I believe you will do just fine!
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/17/09 07:03 PM
Maybe the better question is 'what documentation do you really need to do a pre-approval'?
We get a request (not an application with address) that has borrowers' names, SS#, approximate loan amount and estimated annual salaries. We pull the CB and run DU. Based on that we can tell the borrowers that it appears they will be qualified for $X but that we would need documentation for full underwriting before we could approve the loan.
We get a request (not an application with address) that has borrowers' names, SS#, approximate loan amount and estimated annual salaries. We pull the CB and run DU. Based on that we can tell the borrowers that it appears they will be qualified for $X but that we would need documentation for full underwriting before we could approve the loan.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/17/09 07:08 PM
We do something similar TR. The preapproval is pretty generic.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/17/09 07:19 PM
I think you are mixing terms...preapproval vs prequalification. what ya'll have described fits prequals.
A preapproval generally goes through all of the normal underwriting and approval process...then a commitment is issued that basically states if it changes...you may no longer be approved. (more or less)
A preapproval generally goes through all of the normal underwriting and approval process...then a commitment is issued that basically states if it changes...you may no longer be approved. (more or less)
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/17/09 07:20 PM
The in-house training went really well and it opened an opportunity to further discuss other issues (like HPML's, etc) in a live discussion.
Tomorrow brings in the secondary market folks as well as several attorney's and their assistants. I hope it goes as well, although I imagine the concentration of material issues will be quite different.
Tomorrow brings in the secondary market folks as well as several attorney's and their assistants. I hope it goes as well, although I imagine the concentration of material issues will be quite different.
Posted By: BNKO
Re: RESPA changes 1-1-10 - 11/17/09 07:26 PM
Can you detail the discrepancies that David pointed out in his webinar. I was not able to attend. Thanks.
Posted By: 123comp
Re: RESPA changes 1-1-10 - 11/17/09 07:42 PM
Out of curiosity is anyone planning on using the seventh item in the definition for application “other information deemed necessary by the lender” ? If so what?
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 11/17/09 08:00 PM
Originally Posted By: BNKO
Can you detail the discrepancies that David pointed out in his webinar. I was not able to attend. Thanks.
David posted about this in his blog. See this web page. http://www.bankerscompliance.com/blog/respa-training-and-examples.htm
Posted By: BNKO
Re: RESPA changes 1-1-10 - 11/17/09 08:29 PM
Thanks for the link.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 11/17/09 08:34 PM
Ok I am not sure if my question was answer. For in-house loans we do not require title insurance. However, after a review of the title opinion, the borrower may purchase titl insurance. We have never listed title insurace on teh GFE before as it has always been optional. Will we need to start listing it on the new GFE incase teh borrower wants to purchase? If we don't and then they decide to purchase, is that a changed circumstance?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/17/09 08:38 PM
ahk-that is similar to owners title insurance-always optional for the borrower so we never disclosed it. Under the new regs we have to disclose. I would say you would want to disclose it.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 11/17/09 08:47 PM
Thanks for the response. That is what I was thinking.
Ok another question, we have an Attorney look at the title opinion or search. I initall thought the attorney fee would go in Block 6: Required Services you can shop for, but now I am thinking it should go in block 4 for title services.
We have preapred a list of attorney's they can use. If they use one on the list then they are subject to 10%, if they don't no worries. Are we required to have a list of providers for title services?
Ok another question, we have an Attorney look at the title opinion or search. I initall thought the attorney fee would go in Block 6: Required Services you can shop for, but now I am thinking it should go in block 4 for title services.
We have preapred a list of attorney's they can use. If they use one on the list then they are subject to 10%, if they don't no worries. Are we required to have a list of providers for title services?
Posted By: Frank
Re: RESPA changes 1-1-10 - 11/17/09 08:53 PM
One thing I noticed that was incorrectly disclosed was the home warranty.
If I am reading the FAQ's right on page 45 Q#3 states that the comparison chart must include any amounts shown on page 2 of the HUD-1 in the column as paid by the borrower.....
I don't see this on the OTS's example. Which leads me into the problem I have of disclosing credit life insurance. my understanding is that credit life is disclosed on the GFE as part of the principal balance-not as a charge in one of the blocks (received guidance on this via a HUD Respa compliance specialist)(this goes against the FAQ guidance of no discretionary charges are to be included in monthly amount of principal,interest, mtg insurance disclosed). On the Hud-1 it would be disclosed on a line-therefore it would have to be disclosed on the comparison chart but it would not show an amount under the GFE side of the comparison chart. So, it looks skewed.
I wonder if a person could disclose the credit life amount on the GFE part of the comparison chart so that it would give the consumer a better picture of what's going on.
If I am reading the FAQ's right on page 45 Q#3 states that the comparison chart must include any amounts shown on page 2 of the HUD-1 in the column as paid by the borrower.....
I don't see this on the OTS's example. Which leads me into the problem I have of disclosing credit life insurance. my understanding is that credit life is disclosed on the GFE as part of the principal balance-not as a charge in one of the blocks (received guidance on this via a HUD Respa compliance specialist)(this goes against the FAQ guidance of no discretionary charges are to be included in monthly amount of principal,interest, mtg insurance disclosed). On the Hud-1 it would be disclosed on a line-therefore it would have to be disclosed on the comparison chart but it would not show an amount under the GFE side of the comparison chart. So, it looks skewed.
I wonder if a person could disclose the credit life amount on the GFE part of the comparison chart so that it would give the consumer a better picture of what's going on.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/17/09 09:20 PM
Go Hogs...I think it depends on whether your credit life is financed or paid monthly. If the first, it's part of the loan balance and included in the P&I. If it's the latter, it's not shown.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 11/17/09 09:44 PM
HUD has updated the FAQs today (11/17). http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm
They are 49 pages. See the items in boldface type on pages 5, 9, 12, 16, 32, 36, 44, 45, and 46.
They are 49 pages. See the items in boldface type on pages 5, 9, 12, 16, 32, 36, 44, 45, and 46.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/17/09 09:57 PM
Thanks Reads.. I am glad they cleared up the font size contreversy..... :sarcastic smiley:
Posted By: Sewanee, CRCM
Re: RESPA changes 1-1-10 - 11/17/09 10:46 PM
Last week I e-mailed HUD concerning the issue of whether the GFE and/or HUD could/should have an additional form which the borrower (and seller on the HUD-1 in the event of a sale) would sign, since the new forms don't have signature lines. This is what I received today:
"The GFE and HUD-1 are prescribed forms. The new RESPA Rule does not require signatures on the GFE or HUD-1." How helpful!
How will others handle this? Will you get signatures concerning either of these documents? Will sellers run into problems proving they sold their property if they can't produce a "signed settlement statement"? I'm curious.
"The GFE and HUD-1 are prescribed forms. The new RESPA Rule does not require signatures on the GFE or HUD-1." How helpful!
How will others handle this? Will you get signatures concerning either of these documents? Will sellers run into problems proving they sold their property if they can't produce a "signed settlement statement"? I'm curious.
Posted By: Princess Romeo
Re: RESPA changes 1-1-10 - 11/17/09 11:44 PM
Is it me, or do the FAQs have a snarky tone about them?
Posted By: Sheldon Hendrix
Re: RESPA changes 1-1-10 - 11/18/09 02:56 AM
HUD is now requesting that regulators exercise restratint for the first four months after the rules become effective.
"HUD is asking other federal and relevant state enforcement agencies to exercise the same 120-day restraint in enforcement for non-FHA originators and other settlement service providers who demonstrate the good faith effort to implement RESPA's new rules. In determining whether a mortgagee has made a good faith effort, MRB staff will consider whether the mortgagee has relied on the new RESPA rule and other written guidance issued by the Department, and the extent to which the mortgagee has made sufficient investment and commitment in technology, training, and quality control designed to comply with the new rule."
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2009/HUDNo.09-215
"HUD is asking other federal and relevant state enforcement agencies to exercise the same 120-day restraint in enforcement for non-FHA originators and other settlement service providers who demonstrate the good faith effort to implement RESPA's new rules. In determining whether a mortgagee has made a good faith effort, MRB staff will consider whether the mortgagee has relied on the new RESPA rule and other written guidance issued by the Department, and the extent to which the mortgagee has made sufficient investment and commitment in technology, training, and quality control designed to comply with the new rule."
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2009/HUDNo.09-215
Posted By: Kathleen O. Blanchard
Re: RESPA changes 1-1-10 - 11/18/09 03:25 AM
I think we are in an alternate universe!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/18/09 03:35 AM
Originally Posted By: Weeble Woman
If I accept an application in December 2009 and use the current GFE, which GFE do I use if I need to redisclose after January 2010? Thanks for any and all replies, and I apologize if this has already been addressed and I couldn't find it.
Q&A #3 from the GFE General section:
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.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/18/09 01:34 PM
Hey guys...I sent a couple of questions to HUD the other day...one I won't even bother posting as it was NOT helpful...however, I sent one in regarding sales contracts whereby it shows the seller paying closing costs...this is my question and their answer...it's kinda interesting. It boils down to...just like the Q&A says..regardless of who pays, if it's typically [can be] paid by the borrower...you disclose it.
I know that the Q&A’s address items typically paid by the purchaser being disclosed on the GFE, including owner’s title insurance on purchase transactions even when they are typically paid or required by state law to be paid by the seller. However, the question has come up when you have a sales contract whereby the seller is paying all closing costs, or up to a percentage of those costs normally paid by the buyer. If you have that contract, should you still be showing all fees paid by the purchaser, then credit on the HUD 1, or should you disclose it (as has been done in the past) based on the contract terms.
There is a lot of disagreement on this situation and we need to be playing by the same rules in order for comparison shopping to make any sense.
Please advise,
Hi Suzy:
There is no disagreement at HUD on this issue. The contract provides no justification for failing to disclose those charges the borrower in the locality will normally pay. If you live in an area where the local industry participants have not settled upon who pays what in the typical situation, we would be interested in hearing about it.
and he sent his name and contact, it wasn't generic like the other one I sent.
Anyway...and comments from ya'll?
I know that the Q&A’s address items typically paid by the purchaser being disclosed on the GFE, including owner’s title insurance on purchase transactions even when they are typically paid or required by state law to be paid by the seller. However, the question has come up when you have a sales contract whereby the seller is paying all closing costs, or up to a percentage of those costs normally paid by the buyer. If you have that contract, should you still be showing all fees paid by the purchaser, then credit on the HUD 1, or should you disclose it (as has been done in the past) based on the contract terms.
There is a lot of disagreement on this situation and we need to be playing by the same rules in order for comparison shopping to make any sense.
Please advise,
Hi Suzy:
There is no disagreement at HUD on this issue. The contract provides no justification for failing to disclose those charges the borrower in the locality will normally pay. If you live in an area where the local industry participants have not settled upon who pays what in the typical situation, we would be interested in hearing about it.
and he sent his name and contact, it wasn't generic like the other one I sent.
Anyway...and comments from ya'll?
Posted By: WHEDA
Re: RESPA changes 1-1-10 - 11/18/09 01:37 PM
To Reads Regs - Thank you so much for filtering out the additions in the RESPA FAQs. After noon CST, or maybe before, I'll toast a shot of Captain Morgan to you!!
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/18/09 01:39 PM
RRJoker-agreed. One of the few changes that is clear and straightforward-whether or not it makes sense.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/18/09 02:30 PM
I agree - it doesn't make sense but HUD is clear on that matter.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/18/09 02:47 PM
It makes sense when you think it through. Just because a seller is paying all closing costs, or a percentage there of, you know it's built into the price, so in all fairness...maybe a borrower should be aware of all the costs involved. So be it...now they will be.
It would be nice if they had included a seller "credit" section on the form, however.
It would be nice if they had included a seller "credit" section on the form, however.
Posted By: Shananighan
Re: RESPA changes 1-1-10 - 11/18/09 03:20 PM
RR Joker - At least you received an answer. I emailed them on 10-29 about the "Owner's Title Ins." discrepencies in their Q&A and have not received anything back.
Your answer however is as clear as the rest on their Q&A's. I am assuming the "disagreement" you talk about is between you and your fellow employees and not HUD's disagreement on the issue.
I still don't think that everyone is on the same page regarding "Owner's Title Ins." - to disclose or not to disclose? We have attended several training sessions on RESPA and the answers have been split. Maybe we should test this issue during the 120 day period. (If our regulator follows HUD's guidance on this of course)
Question to all: I was speaking with a gal from the title co. the other day. I asked her if they were going to use average charges for recording fees, etc. as I heard (or read) that a majority of title co's are going to do this. She stated yes and that one of their lenders (won't mention the big bad name) is requiring them to for their loans. She asked me if they are required to use average charges for everyone or if it is up to the lender. So if one lender "requires" the use of average charges does the title co have to apply this to all lenders?
Thanks for your responses in advance. I told her I would see what I could find out.
Your answer however is as clear as the rest on their Q&A's. I am assuming the "disagreement" you talk about is between you and your fellow employees and not HUD's disagreement on the issue.
I still don't think that everyone is on the same page regarding "Owner's Title Ins." - to disclose or not to disclose? We have attended several training sessions on RESPA and the answers have been split. Maybe we should test this issue during the 120 day period.
(If our regulator follows HUD's guidance on this of course) Question to all: I was speaking with a gal from the title co. the other day. I asked her if they were going to use average charges for recording fees, etc. as I heard (or read) that a majority of title co's are going to do this. She stated yes and that one of their lenders (won't mention the big bad name) is requiring them to for their loans. She asked me if they are required to use average charges for everyone or if it is up to the lender. So if one lender "requires" the use of average charges does the title co have to apply this to all lenders?
Thanks for your responses in advance. I told her I would see what I could find out.
Posted By: Ninky
Re: RESPA changes 1-1-10 - 11/18/09 03:53 PM
Can we simply provede a copy of the 1st page of the GFE provided to the borrower to the title company to give them the "terms" information for them to complete the last page of the HUD?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/18/09 04:16 PM
I had a long chat with one of our closing attorneys about this. The key is making sure the lender quotes the correct (or enough) fees up front to make sure the closing agents costs are covered. Since all of the fees like wire, copy, closing, doc prep, overnight, etc are lumped together, it could be tough to make sure they are accounted for. Her comment to me was "are we going to be stuck eating fees if you don't quote enough?" which is a fair concern. I have come up with a figure for a purchase and one for a refi (since refi's usually have additional overnight fees to send payoffs) which should cover "normal" costs for these items.
Ultimately, you will be sending the intial and final numbers over to them for the closing.
Ultimately, you will be sending the intial and final numbers over to them for the closing.
Posted By: Amos
Re: RESPA changes 1-1-10 - 11/18/09 05:03 PM
I submitted the following question to HUD this morning. Their reply is shown below.
We are requesting clarification on the proper disclosure on the new GFE of the cost of an owner’s title insurance policy.
FAQ #2 in the section “GFE – Seller paid items” and FAQs #1 and #2 in the section “GFE – Block 5” (see below) seem to contain conflicting information in the situation where the borrower typically would not incur charges for the owner’s title insurance policy. In Wisconsin, the seller is required to furnish and pay for the owner’s title insurance policy. FAQ #2 in the section “GFE – Seller paid items” leads me to believe that we would not disclose the cost of the owner’s title insurance policy on the GFE for a purchase transaction in Wisconsin, since the borrower would not typically incur this charge. However, FAQs #1 and #2 in the section “GFE – Block 5” seem to contradict this.
Are we, or are we not, required to disclose the cost of the owner’s title insurance when the borrower would not typically incur this charge?
“GFE – Seller paid items
2) Q: Are charges to the seller listed on the GFE?
A: RESPA requires that only the borrower receive a GFE. The GFE is defined as an estimate of settlement charges a borrower is likely to incur in connection with the settlement. Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—do not have to be included on the GFE. If the borrower typically would incur charges for title services and lender's and owner's title insurance, the GFE instructions make it clear that those charges are required to be listed regardless of whether, for example, the contract requires the seller to pay for the service. If there is a question about whether the borrower or seller is to pay for a particular settlement service, the charge for that service should be disclosed on the GFE.”
“GFE – Block 5
1) Q: Do loan originators have to provide a price for Owner‘s title insurance on the GFE?
A: Loan originators must provide an estimate of the charge for an Owner‘s title insurance policy in Block 5, ―Owner‘s title insurance on the GFE on all purchase transactions. For non-purchase transactions, the loan originator may enter ―NA or ―Not Applicable in this Block.
2) Q: If a seller typically pays for the Block 5, ―Owner‘s title insurance, does the charge still have to be shown on the GFE?
A: Yes, an estimate of the cost must be shown in Block 5, ―Owner‘s title insurance for all purchase transactions regardless of who is selecting or paying for it.”
HUD's response:
#2) states: Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—DO NOT HAVE TO BE INCLUDED ON THE GFE. (This occurs when you know that the borrower will not incur the fee)
Include the charges on the GFE only if the borrower will pay for them as state in the below statement OR if the borrower would TYPICALLY pay them.
If the borrower typically would incur charges for title services and lender's and owner's title insurance, the GFE instructions make it clear that those charges are required to be listed regardless of whether, for example, the contract requires the seller to pay for the service.
Cheryl,
RESPA Compliance Specialist
We are requesting clarification on the proper disclosure on the new GFE of the cost of an owner’s title insurance policy.
FAQ #2 in the section “GFE – Seller paid items” and FAQs #1 and #2 in the section “GFE – Block 5” (see below) seem to contain conflicting information in the situation where the borrower typically would not incur charges for the owner’s title insurance policy. In Wisconsin, the seller is required to furnish and pay for the owner’s title insurance policy. FAQ #2 in the section “GFE – Seller paid items” leads me to believe that we would not disclose the cost of the owner’s title insurance policy on the GFE for a purchase transaction in Wisconsin, since the borrower would not typically incur this charge. However, FAQs #1 and #2 in the section “GFE – Block 5” seem to contradict this.
Are we, or are we not, required to disclose the cost of the owner’s title insurance when the borrower would not typically incur this charge?
“GFE – Seller paid items
2) Q: Are charges to the seller listed on the GFE?
A: RESPA requires that only the borrower receive a GFE. The GFE is defined as an estimate of settlement charges a borrower is likely to incur in connection with the settlement. Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—do not have to be included on the GFE. If the borrower typically would incur charges for title services and lender's and owner's title insurance, the GFE instructions make it clear that those charges are required to be listed regardless of whether, for example, the contract requires the seller to pay for the service. If there is a question about whether the borrower or seller is to pay for a particular settlement service, the charge for that service should be disclosed on the GFE.”
“GFE – Block 5
1) Q: Do loan originators have to provide a price for Owner‘s title insurance on the GFE?
A: Loan originators must provide an estimate of the charge for an Owner‘s title insurance policy in Block 5, ―Owner‘s title insurance on the GFE on all purchase transactions. For non-purchase transactions, the loan originator may enter ―NA or ―Not Applicable in this Block.
2) Q: If a seller typically pays for the Block 5, ―Owner‘s title insurance, does the charge still have to be shown on the GFE?
A: Yes, an estimate of the cost must be shown in Block 5, ―Owner‘s title insurance for all purchase transactions regardless of who is selecting or paying for it.”
HUD's response:
#2) states: Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—DO NOT HAVE TO BE INCLUDED ON THE GFE. (This occurs when you know that the borrower will not incur the fee)
Include the charges on the GFE only if the borrower will pay for them as state in the below statement OR if the borrower would TYPICALLY pay them.
If the borrower typically would incur charges for title services and lender's and owner's title insurance, the GFE instructions make it clear that those charges are required to be listed regardless of whether, for example, the contract requires the seller to pay for the service.
Cheryl,
RESPA Compliance Specialist
Posted By: Shananighan
Re: RESPA changes 1-1-10 - 11/18/09 05:17 PM
Cheryl,
Unless I am missing something, there still is no clear answer. By the way, this is exactly what I submitted to them in October and never got a reply.
Unless I am missing something, there still is no clear answer. By the way, this is exactly what I submitted to them in October and never got a reply.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/18/09 05:41 PM
Originally Posted By: Shananighan
Cheryl,
Unless I am missing something, there still is no clear answer. By the way, this is exactly what I submitted to them in October and never got a reply.
Unless I am missing something, there still is no clear answer. By the way, this is exactly what I submitted to them in October and never got a reply.
I still think that typically means that either party could pay it, but normally the seller does. However, there is a chance the borrower could, so it should be disclosed.
If by law the seller pays a fee, then it would not be disclosed. In NH, the state transfer tax is split between buyer and seller, by law. We only disclose the buyer portion.
When in doubt, disclose.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/18/09 05:43 PM
Originally Posted By: Sox in 07
I had a long chat with one of our closing attorneys about this. The key is making sure the lender quotes the correct (or enough) fees up front to make sure the closing agents costs are covered. Since all of the fees like wire, copy, closing, doc prep, overnight, etc are lumped together, it could be tough to make sure they are accounted for. Her comment to me was "are we going to be stuck eating fees if you don't quote enough?" which is a fair concern. I have come up with a figure for a purchase and one for a refi (since refi's usually have additional overnight fees to send payoffs) which should cover "normal" costs for these items.
Ultimately, you will be sending the intial and final numbers over to them for the closing.
Ultimately, you will be sending the intial and final numbers over to them for the closing.
How did you come up with that Sox? Did you get all the fees from the title co and then average a cost? thanks
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/18/09 06:00 PM
Right now we dictate the fees our agents can charge for the closing, and allow a reasonable figure for the "junk" charges as i call them (wire, copy, etc). As an example, we allow (in MA) $595 for the closing fee (which covers 1101 to 1107-they can break it out as they see fit), wire, copy, and overnight fees. I On a purch, I am (pending my bosses ok) going to start with the $595, add 15 for wire, 10 for copy, and 25 for overnight. On a refi, I will use the same, but use probably $50 for the overnight (more payoffs to send out). So probably 650 or so on a purch, 700 on a refi.
Posted By: Shananighan
Re: RESPA changes 1-1-10 - 11/18/09 06:11 PM
That is what we were going to do - better to disclose more than needed. Thank you.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/18/09 06:12 PM
Back to WI state law requiring seller to furnish and pay for owner's title policy, Sox, are you saying that your interpretation is that we should leave this off the borrower's side of the GFE as you will be doing with half of the transfer tax as affected by your state law? I'm so confused!
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/18/09 06:19 PM
Truff-My thoughts are if the law says the seller has to pay a particular fee, the buyer would never in any situation pay for it, so it would not be disclosed. I could be all wrong, but that is my line of thinking.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/18/09 06:36 PM
Truff-as a follow up, from the 10/22 FAQ, Page 9, Q2 under seller paid:
Q: Are seller charges listed on the GFE?
A: (I will paraphrase) "...Charges that typically would not be charged to the borrower but would be charged to another party-such as the seller-do not have to be included on the GFE. If the borrower would typically incur charges for title services and lenders and owners title insurance, the GFE instructions make it clear that those charges are requiresed to be listed regardless of whether, for example, the contract requires the seller to pay for the service...."
Seems to me that if the buyer is never responsible for a fee it isn't disclosed.
Q: Are seller charges listed on the GFE?
A: (I will paraphrase) "...Charges that typically would not be charged to the borrower but would be charged to another party-such as the seller-do not have to be included on the GFE. If the borrower would typically incur charges for title services and lenders and owners title insurance, the GFE instructions make it clear that those charges are requiresed to be listed regardless of whether, for example, the contract requires the seller to pay for the service...."
Seems to me that if the buyer is never responsible for a fee it isn't disclosed.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 11/18/09 06:42 PM
Originally Posted By: Compliance Rules
HUD is now requesting that regulators exercise restratint for the first four months after the rules become effective.
"HUD is asking other federal and relevant state enforcement agencies to exercise the same 120-day restraint in enforcement for non-FHA originators and other settlement service providers who demonstrate the good faith effort to implement RESPA's new rules. In determining whether a mortgagee has made a good faith effort, MRB staff will consider whether the mortgagee has relied on the new RESPA rule and other written guidance issued by the Department, and the extent to which the mortgagee has made sufficient investment and commitment in technology, training, and quality control designed to comply with the new rule."
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2009/HUDNo.09-215
"HUD is asking other federal and relevant state enforcement agencies to exercise the same 120-day restraint in enforcement for non-FHA originators and other settlement service providers who demonstrate the good faith effort to implement RESPA's new rules. In determining whether a mortgagee has made a good faith effort, MRB staff will consider whether the mortgagee has relied on the new RESPA rule and other written guidance issued by the Department, and the extent to which the mortgagee has made sufficient investment and commitment in technology, training, and quality control designed to comply with the new rule."
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2009/HUDNo.09-215
So that means... ???
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/18/09 07:46 PM
I agree Sox...if state law prohibits it...don't show it. If it doesn't, and the buyer CAN/Could pay it...disclose it regardless. The sales contract stipulations are meaningless, based on the Q&A I posted earlier. The Q&A's specifically point out owner's coverage and say that 'even if it is known or typical for the seller to pay it, you still have to disclose it on a purchase'...my paraphrase.
Anyway, during the training today, some attorney reps were there. They stated that it is rare that a borrower decides to purchase owner's coverage. If they do, the lender's coverage price is greatly reduced. SO, we came to the conclusion that you have offset one with the other and GREATLY reduced the change of exceeding the 10% tolerance by including the owner's coverage. If it's not required, then the borrower can understand they won't incur that charge and need not consider that in their total. If they get it, it will reduce the lender's coverage, thereby reducing the "title services" box and, again, reducing any chance of an overage.
Interesting little protection built in there!
Anyway, during the training today, some attorney reps were there. They stated that it is rare that a borrower decides to purchase owner's coverage. If they do, the lender's coverage price is greatly reduced. SO, we came to the conclusion that you have offset one with the other and GREATLY reduced the change of exceeding the 10% tolerance by including the owner's coverage. If it's not required, then the borrower can understand they won't incur that charge and need not consider that in their total. If they get it, it will reduce the lender's coverage, thereby reducing the "title services" box and, again, reducing any chance of an overage.
Interesting little protection built in there!
Posted By: bstritecky
Re: RESPA changes 1-1-10 - 11/18/09 09:59 PM
Has anyone developed a handy reference guide for originators on "changed circumstances" that they would be willing to share?
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/18/09 10:34 PM
Originally Posted By: Becky S.
Has anyone developed a handy reference guide for originators on "changed circumstances" that they would be willing to share?
Supply them HUDs FAQ.
Posted By: Sewanee, CRCM
Re: RESPA changes 1-1-10 - 11/18/09 11:35 PM
That's something I'd like to see.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/19/09 12:58 PM
Can I have your opinion on the following topic- recommended settlement service provider list- this would be for title companies-
We are going to allow our customers to choose their settlement service provider-
We are working on our list now of who were are going to put on it. I say we provide our recommendded settlement service provider list as is. Someone piped up and said we should but either blank lines or a box with a blank line and if the borrower chooses someone not on our list then we write in their choice.
I don't agree with this. I feel you have blank lines on the list and you write in a title agency or whomever- to me it looks like WE added a name to OUR list and thus 10% tolerance .
I say keep the list typed clean and the LO can document it in pen that so and so is the settlement provider the borrower chose and we would put that in the file.
What are your thoughts please- I hope this made sense too. Thanks.
We are going to allow our customers to choose their settlement service provider-
We are working on our list now of who were are going to put on it. I say we provide our recommendded settlement service provider list as is. Someone piped up and said we should but either blank lines or a box with a blank line and if the borrower chooses someone not on our list then we write in their choice.
I don't agree with this. I feel you have blank lines on the list and you write in a title agency or whomever- to me it looks like WE added a name to OUR list and thus 10% tolerance .
I say keep the list typed clean and the LO can document it in pen that so and so is the settlement provider the borrower chose and we would put that in the file.
What are your thoughts please- I hope this made sense too. Thanks.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 11/19/09 01:05 PM
If State law requires the seller to pay the cost for the owner's title poliy then I think that is what HUD indicated by this statement:
"Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—DO NOT HAVE TO BE INCLUDED ON THE GFE."
"Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—DO NOT HAVE TO BE INCLUDED ON THE GFE."
Posted By: Amos
Re: RESPA changes 1-1-10 - 11/19/09 01:19 PM
Originally Posted By: rlcarey
If State law requires the seller to pay the cost for the owner's title poliy then I think that is what HUD indicated by this statement:
"Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—DO NOT HAVE TO BE INCLUDED ON THE GFE."
"Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—DO NOT HAVE TO BE INCLUDED ON THE GFE."
I agree, but others are looking specifically at the instructions for completing Block 5, and the related FAQs, and are saying you ALWAYS must show owner's title insurance for a purchase.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/19/09 01:53 PM
Originally Posted By: pjs
Can I have your opinion on the following topic- recommended settlement service provider list- this would be for title companies-
We are going to allow our customers to choose their settlement service provider-
We are working on our list now of who were are going to put on it. I say we provide our recommendded settlement service provider list as is. Someone piped up and said we should but either blank lines or a box with a blank line and if the borrower chooses someone not on our list then we write in their choice.
I don't agree with this. I feel you have blank lines on the list and you write in a title agency or whomever- to me it looks like WE added a name to OUR list and thus 10% tolerance .
I say keep the list typed clean and the LO can document it in pen that so and so is the settlement provider the borrower chose and we would put that in the file.
What are your thoughts please- I hope this made sense too. Thanks.
We are going to allow our customers to choose their settlement service provider-
We are working on our list now of who were are going to put on it. I say we provide our recommendded settlement service provider list as is. Someone piped up and said we should but either blank lines or a box with a blank line and if the borrower chooses someone not on our list then we write in their choice.
I don't agree with this. I feel you have blank lines on the list and you write in a title agency or whomever- to me it looks like WE added a name to OUR list and thus 10% tolerance .
I say keep the list typed clean and the LO can document it in pen that so and so is the settlement provider the borrower chose and we would put that in the file.
What are your thoughts please- I hope this made sense too. Thanks.
FWIW I agree, PJS.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 11/19/09 02:38 PM
Amos,
I believe that in the FAQ, they are relying on a literal interpretation of "good faith estimate" found in the definition to the regulations.
" Good faith estimate or GFE means an estimate of settlement charges a borrower is likely to incur, as a dollar amount, and related loan information, based upon common practice and experience in the locality of the mortgaged property, as provided on the form prescribed in § 3500.7 and prepared in accordance with the Instructions in Appendix C to this part."
If State law prohibits the borrower from paying the charge - then that definition overrides the instructions. I think HUD has been very clear on this in the FAQ. The reason for the FAQ is to provide additional guidance and I believe they have satisfactorily justified their position based on the regulation itself.
I believe that in the FAQ, they are relying on a literal interpretation of "good faith estimate" found in the definition to the regulations.
" Good faith estimate or GFE means an estimate of settlement charges a borrower is likely to incur, as a dollar amount, and related loan information, based upon common practice and experience in the locality of the mortgaged property, as provided on the form prescribed in § 3500.7 and prepared in accordance with the Instructions in Appendix C to this part."
If State law prohibits the borrower from paying the charge - then that definition overrides the instructions. I think HUD has been very clear on this in the FAQ. The reason for the FAQ is to provide additional guidance and I believe they have satisfactorily justified their position based on the regulation itself.
Posted By: Frank
Re: RESPA changes 1-1-10 - 11/19/09 04:13 PM
I've developed a thought on optional credit life I wanted to share in order for you to punch holes in it. I honestly can't seem to find a satisfactory way to deal with it. This way seems to solve the majority of the issues.
The premium is part of the principal balance, therefore the principal balance disclosed on the GFE includes credit life in the "summary of your loan" section.
Since it is not directly disclosed as a fee on the GFE in this manner, it shouldn't show up on page 2 of the HUD-1 as an item because any fee that shows up on page 2 has to be shown on the comparison chart.
So in my previous way of dealing with it, if credit life were disclosed on page 2 as in item, it would show up on the comparison chart as a charge on the HUD-1 and there would not be a comparison charge on the GFE.
To overcome this inaccuracy to get the GFE and HUD to be in harmony, I think you could use the guidance that is in the most recent FAQ update on page 36 q#1 on the HUD-1 series.
Here's how it would work:
1. On the GFE, credit life would be part of the principal balance disclosed.
2. On the HUD-1 I'd disclose the credit life on line 104 as an additional item owed by the borrower that is not on the GFE as per the FAQ. Since it's part of the principal balance, I claim there was no disclosure on the GFE, therefore it would fit in the 100 series.
This would then take care of disclosure of credit life--but it wouldn't have to be included on page 2 HUD and have to be included on the comparison chart of settlement charges and look messed up. Waaaay back earlier in the post it was an opinion that credit life is not a settlement cost, but it is money being borrowed to purchase an optional product. I tend to think this way.
The premium is part of the principal balance, therefore the principal balance disclosed on the GFE includes credit life in the "summary of your loan" section.
Since it is not directly disclosed as a fee on the GFE in this manner, it shouldn't show up on page 2 of the HUD-1 as an item because any fee that shows up on page 2 has to be shown on the comparison chart.
So in my previous way of dealing with it, if credit life were disclosed on page 2 as in item, it would show up on the comparison chart as a charge on the HUD-1 and there would not be a comparison charge on the GFE.
To overcome this inaccuracy to get the GFE and HUD to be in harmony, I think you could use the guidance that is in the most recent FAQ update on page 36 q#1 on the HUD-1 series.
Here's how it would work:
1. On the GFE, credit life would be part of the principal balance disclosed.
2. On the HUD-1 I'd disclose the credit life on line 104 as an additional item owed by the borrower that is not on the GFE as per the FAQ. Since it's part of the principal balance, I claim there was no disclosure on the GFE, therefore it would fit in the 100 series.
This would then take care of disclosure of credit life--but it wouldn't have to be included on page 2 HUD and have to be included on the comparison chart of settlement charges and look messed up. Waaaay back earlier in the post it was an opinion that credit life is not a settlement cost, but it is money being borrowed to purchase an optional product. I tend to think this way.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 11/20/09 02:44 AM
Originally Posted By: sewanee
Last week I e-mailed HUD concerning the issue of whether the GFE and/or HUD could/should have an additional form which the borrower (and seller on the HUD-1 in the event of a sale) would sign, since the new forms don't have signature lines. This is what I received today:
"The GFE and HUD-1 are prescribed forms. The new RESPA Rule does not require signatures on the GFE or HUD-1." How helpful!
How will others handle this? Will you get signatures concerning either of these documents? Will sellers run into problems proving they sold their property if they can't produce a "signed settlement statement"? I'm curious.
"The GFE and HUD-1 are prescribed forms. The new RESPA Rule does not require signatures on the GFE or HUD-1." How helpful!
How will others handle this? Will you get signatures concerning either of these documents? Will sellers run into problems proving they sold their property if they can't produce a "signed settlement statement"? I'm curious.
We have decided that we will have a signature addendum with the new documents.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/20/09 01:03 PM
Another chapter in the "does this make sense" book. Most of our investors require signatures on the HUD anyway, so we will continue that practice.
Posted By: BFaith
Re: RESPA changes 1-1-10 - 11/20/09 02:11 PM
Originally Posted By: jlroberts
Originally Posted By: sewanee
Last week I e-mailed HUD concerning the issue of whether the GFE and/or HUD could/should have an additional form which the borrower (and seller on the HUD-1 in the event of a sale) would sign, since the new forms don't have signature lines. This is what I received today:
"The GFE and HUD-1 are prescribed forms. The new RESPA Rule does not require signatures on the GFE or HUD-1." How helpful!
How will others handle this? Will you get signatures concerning either of these documents? Will sellers run into problems proving they sold their property if they can't produce a "signed settlement statement"? I'm curious.
"The GFE and HUD-1 are prescribed forms. The new RESPA Rule does not require signatures on the GFE or HUD-1." How helpful!
How will others handle this? Will you get signatures concerning either of these documents? Will sellers run into problems proving they sold their property if they can't produce a "signed settlement statement"? I'm curious.
We have decided that we will have a signature addendum with the new documents.
I'd be careful calling it an "addendum" From the FAQs updated on 11/17:
27) Q: May additional pages be added to the GFE to allow for all charges to be shown? If so, is it an addendum or an extension of page 2?
A: No. Additional pages or addendums may not be added to the GFE. The standardized GFE form set forth in Appendix C to the Rule is the required GFE form and must be provided exactly as specified, except that Blocks 3, 6, and 11 on page 2 may be adapted to use in particular loan situations, so that additional lines may be inserted there, and unused lines may be deleted. Lines may be added to Blocks 3, 6 and 11 vertically and horizontally as shown in the examples below.
Posted By: Still Smiling
Re: RESPA changes 1-1-10 - 11/20/09 03:46 PM
Another question please on Seller Paid Items. If the purchase agreement simple states that the seller is going to pay $XXX toward closing cost, would we simply list all cost in the borrowers column of the HUD and show a credit on page 1 to borrower and a debit to seller for the amount the seller is paying? If so would the amount of credit and debit have to be itemized or could it be a lump sum?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/20/09 04:15 PM
Lump sum as I understand it.
Posted By: Still Smiling
Re: RESPA changes 1-1-10 - 11/20/09 04:31 PM
Thanks...that was my thought as well.
Posted By: dottiec
Re: RESPA changes 1-1-10 - 11/20/09 04:33 PM
I'm trying to understand when I use a credit in Block 2 and when I have to use Block 204 on the HUD-1 form for a junior lien.
We collect a fee of $141.50 to cover all closing costs on the junior lien. This is the exact amount it costs us provided there is only one tax parcel included on the mortgage.
Our loan involves a property that has two tax parcels. This will cost us an additional $5.00 in government recording fees. We know when we issue the GFE that we will not be collecting the $5.00 from the customer, the bank will pay it.
Since we are "splitting" the fee, do I show a credit in Line 2 of the GFE and can I close using a HUD-1A? Or do I leave Line 2 of the GFE N/A and use the HUD-1 to close with a credit in Line 204?
Thanks to anyone brave enough to attemp an answer!
We collect a fee of $141.50 to cover all closing costs on the junior lien. This is the exact amount it costs us provided there is only one tax parcel included on the mortgage.
Our loan involves a property that has two tax parcels. This will cost us an additional $5.00 in government recording fees. We know when we issue the GFE that we will not be collecting the $5.00 from the customer, the bank will pay it.
Since we are "splitting" the fee, do I show a credit in Line 2 of the GFE and can I close using a HUD-1A? Or do I leave Line 2 of the GFE N/A and use the HUD-1 to close with a credit in Line 204?
Thanks to anyone brave enough to attemp an answer!
Posted By: Sage
Re: RESPA changes 1-1-10 - 11/20/09 04:42 PM
If we let the applicant shop for homeowners insurance do we still have to provide them a list?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/20/09 04:44 PM
Insurance does not require lists.
Posted By: Trixie
Re: RESPA changes 1-1-10 - 11/20/09 04:52 PM
Third Party Service Provders - Block 6- If the offer to purchase has listed Well, home inspection etc. Do we need to provide a Providers List? This is something the seller ususally pays for and is ordered by the Realtor. Very confusing how would the bank know who to list on the provider list and keep up on the fees.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/20/09 05:28 PM
Originally Posted By: Sox in 07
Another chapter in the "does this make sense" book. Most of our investors require signatures on the HUD anyway, so we will continue that practice.
edited to add: By that I mean an addendum not a signature. I don't think they prohibit signatures on the docs, do they? I'm so confused by the repeated FAQs and all. Thank cod this thread let's me know I'm not the only one.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/20/09 05:58 PM
Trixie-do you as the lender require the well and home inspection, or are they just borrower requested contingencies on the sales agreement.
Truff-that is correct-they sign the documents themselves-no addendum (although there is an addendum to the HUD for FHA loans).
Truff-that is correct-they sign the documents themselves-no addendum (although there is an addendum to the HUD for FHA loans).
Posted By: Sage
Re: RESPA changes 1-1-10 - 11/20/09 06:11 PM
I want the answer to be that "insurance does not require a list" but can you point me to where the regs say that?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/20/09 06:38 PM
Sage-from the OTS/HUD powerpoint, page 25, it states: "If a loan originator permits a borrower to shop for services (Block 4,5 and 6) the loan originator must provide a written list of providers the estimates were based on." None of the references I have seen state a provider list is required for insurance.
Posted By: RobinB
Re: RESPA changes 1-1-10 - 11/20/09 06:45 PM
I've attended two training sessions in which the instructor could not answer the insurance question.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/20/09 06:51 PM
Originally Posted By: Sox in 07
Truff-that is correct-they sign the documents themselves-no addendum (although there is an addendum to the HUD for FHA loans).
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/20/09 06:55 PM
Originally Posted By: Sox in 07
Sage-from the OTS/HUD powerpoint, page 25, it states: "If a loan originator permits a borrower to shop for services (Block 4,5 and 6) the loan originator must provide a written list of providers the estimates were based on." None of the references I have seen state a provider list is required for insurance.
I second Soxs opinion. Home owners insurance is in Block 11 of the GFE and is not referenced in the list provisions of the reg.
Posted By: Still Smiling
Re: RESPA changes 1-1-10 - 11/20/09 07:05 PM
I agree with you guys on Block 11, but I guess I just missed the fact that you needed to list for Block 5 Owners Title Ins. This seems crazy to list title insurance companies for an optional product, especially when our bank doesnt let borrowers shop for lender title services. Did I understand this correctly?
Posted By: Sage
Re: RESPA changes 1-1-10 - 11/20/09 07:08 PM
But see:
FAQs (11/19/09), page 11.
Q: When do loan originators have to provide the borrower with a written list of identified providers?
A: When a loan originator permits a borrower to shop for third-party settlement services, the loan originator must provide the borrower with a written list of settlement services providers at the time of the GFE, on a separate sheet of paper.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/20/09 07:13 PM
Originally Posted By: Trixie
Third Party Service Provders - Block 6- If the offer to purchase has listed Well, home inspection etc. Do we need to provide a Providers List? This is something the seller ususally pays for and is ordered by the Realtor. Very confusing how would the bank know who to list on the provider list and keep up on the fees.
If you (the lender) are not requiring it, you will just list those extra services in a blank line in the 1300 section of the HUD.
You only need lists for services you REQUIRE, but will allow your borrower to shop for...blocks 4,5 and 6 items.
Posted By: ahou
Re: RESPA changes 1-1-10 - 11/20/09 07:21 PM
GFE – Block 11
1) Q: What types of insurance are included on the GFE, Block 11, Homeowner‘s insurance?
A: Block 11 of the GFE contains estimates for premiums for all types of insurance (other than title insurance) that must be purchased to meet the loan originator‘s requirements to protect
the property from loss, such as hazard insurance (homeowner‘s insurance), flood insurance, and earthquake insurance.
1) Q: What types of insurance are included on the GFE, Block 11, Homeowner‘s insurance?
A: Block 11 of the GFE contains estimates for premiums for all types of insurance (other than title insurance) that must be purchased to meet the loan originator‘s requirements to protect
the property from loss, such as hazard insurance (homeowner‘s insurance), flood insurance, and earthquake insurance.
Posted By: kristin09
Re: RESPA changes 1-1-10 - 11/20/09 07:26 PM
Originally Posted By: David Dickinson
Originally Posted By: Weeble Woman
If I accept an application in December 2009 and use the current GFE, which GFE do I use if I need to redisclose after January 2010? Thanks for any and all replies, and I apologize if this has already been addressed and I couldn't find it.
Q&A #3 from the GFE General section:
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.
I have the same question and I don't think the Q & A answers it...The Q and A basically states that you have the option to reissue the GFE on the new form if you want to use the new HUD-1. The question is do we have to use the new GFE after 1/1/10 if we are reissuing a GFE due to a changed circumstance when the original GFE was prior to 1/1/10?
Posted By: kristin09
Re: RESPA changes 1-1-10 - 11/20/09 07:29 PM
Does anyone charge Fannie Mae LLPAs? The most recent Q and A addresses a loan level price adjustment question but responds to it when talking about a mortgage broker transaction. The Fannie Mae LLPA appears to not fit into this category and should be included in the origination charge. Any thoughts?
Q: A loan level price adjustment is a risk-based adjustment that is derived from specific attributes of the particular loan (LTV, FICO score, occupancy, etc.). How should a loan level price adjustment charged by the lender be disclosed on the GFE?
A: For transactions involving a mortgage broker, the credit or charge for the specific interest rate chosen is the net payment from the lender for the loan. If the net payment from the lender is positive, there is a credit to the borrower and it is entered as a negative amount in Block 2 of the GFE. If the net payment from the lender is negative, there is a charge to the borrower and it is entered as a positive amount in Block 2 of the GFE. The loan level price adjustment is included in the computation in Block 2, “Your credit or charge for the specific interest rate chosen.”
Q: A loan level price adjustment is a risk-based adjustment that is derived from specific attributes of the particular loan (LTV, FICO score, occupancy, etc.). How should a loan level price adjustment charged by the lender be disclosed on the GFE?
A: For transactions involving a mortgage broker, the credit or charge for the specific interest rate chosen is the net payment from the lender for the loan. If the net payment from the lender is positive, there is a credit to the borrower and it is entered as a negative amount in Block 2 of the GFE. If the net payment from the lender is negative, there is a charge to the borrower and it is entered as a positive amount in Block 2 of the GFE. The loan level price adjustment is included in the computation in Block 2, “Your credit or charge for the specific interest rate chosen.”
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/20/09 07:34 PM
To those of you who are questioning the need or not a need for lists of insurors. Insurance is not a required SETTLEMENT service provider. They are a third party and they are a service provider...but they are not a settlement provider, per se.
Only those providers in 4, 5 and/or 6, that you will allow them to shop for need a list. If they choose from your list, you have a 10% tolerance limit.
Commonly, attorney, surveyor, termite, HUD counseling and again, ONLY if you allow them to shop for the above.
Insurance has no tolerance issues and is in the category #3 on page 3 of the GFE (estimates that can change).
Perhaps go beyond the Q&A and to the regulation itself, page 68254, "Your charges for all other settlement services where the written list is discussed. You will see no mention of anything except 4, 5 and 6 items.
Only those providers in 4, 5 and/or 6, that you will allow them to shop for need a list. If they choose from your list, you have a 10% tolerance limit.
Commonly, attorney, surveyor, termite, HUD counseling and again, ONLY if you allow them to shop for the above.
Insurance has no tolerance issues and is in the category #3 on page 3 of the GFE (estimates that can change).
Perhaps go beyond the Q&A and to the regulation itself, page 68254, "Your charges for all other settlement services where the written list is discussed. You will see no mention of anything except 4, 5 and 6 items.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/20/09 07:36 PM
Originally Posted By: kristin09
Originally Posted By: David Dickinson
Originally Posted By: Weeble Woman
If I accept an application in December 2009 and use the current GFE, which GFE do I use if I need to redisclose after January 2010? Thanks for any and all replies, and I apologize if this has already been addressed and I couldn't find it.
Q&A #3 from the GFE General section:
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.
I have the same question and I don't think the Q & A answers it...The Q and A basically states that you have the option to reissue the GFE on the new form if you want to use the new HUD-1. The question is do we have to use the new GFE after 1/1/10 if we are reissuing a GFE due to a changed circumstance when the original GFE was prior to 1/1/10?
No. You will not be dealing with "changed circumstances" on loan applications taken prior to 1/1/2010.
Posted By: Bartman
Re: RESPA changes 1-1-10 - 11/20/09 07:38 PM
I didn't see it referenced in the last couple of pages, but you're all aware that HUD issued a second FAQ this week, on 11-19? Fairly warned be thee...
Posted By: elcinoca
Re: RESPA changes 1-1-10 - 11/20/09 08:08 PM
Regarding Block 4 of the GFE, when we provide a written list of providers, does the list need to include the names of title insurance companies (Chicago Title, Lawyer's Title, First American Title, etc.) or just the names of attorneys and settlement agents?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/20/09 08:10 PM
Hey, they answered the signature line question!
elcinoca...that may depend on the part of the country you live in...for us...it will be attorney's.
elcinoca...that may depend on the part of the country you live in...for us...it will be attorney's.
Posted By: ImGoinNuts
Re: RESPA changes 1-1-10 - 11/20/09 09:16 PM
Originally Posted By: Sage
But see:
FAQs (11/19/09), page 11.
Q: When do loan originators have to provide the borrower with a written list of identified providers?
A: When a loan originator permits a borrower to shop for third-party settlement services, the loan originator must provide the borrower with a written list of settlement services providers at the time of the GFE, on a separate sheet of paper.
In the HUD FAQ's in that same section - go down to #4 - it clarifies it is for blocks 4-5-6.
Posted By: rockchalk02
Re: RESPA changes 1-1-10 - 11/20/09 09:16 PM
How does that reconcile with Section 3500.2 of Reg X that defines a "Settlement service" as:
Sec. 3500.2 Definitions
Settlement service means any service provided in connection with a prospective or actual settlement, including, but not limited to, any one or more of the following:
(11) Provision of services involving hazard, flood, or other casualty insurance or homeowner's warranties;
Sec. 3500.2 Definitions
Settlement service means any service provided in connection with a prospective or actual settlement, including, but not limited to, any one or more of the following:
(11) Provision of services involving hazard, flood, or other casualty insurance or homeowner's warranties;
Posted By: creditcommander
Re: RESPA changes 1-1-10 - 11/20/09 09:25 PM
I need a little clarification on how to list the negative amount on the Adjusted Origination Charges section for a home equity loan without any fees. If I am not charging any fees I know I have to list the negative amount in this section, but am confused on which block to put it in. If I put the negative amount in Block 2, which box should be checked off? If I put it in block 1, do I have to check off the first box in block 2?
I know it says to list a negative number in Block 2 to offset all fees encompassed in the no cost loan in their guide, but it doesn't explain if we should check off a box and it doesn't make sense to put a negative amount there and not check anything.
Does anyone have an answer for this?
I know it says to list a negative number in Block 2 to offset all fees encompassed in the no cost loan in their guide, but it doesn't explain if we should check off a box and it doesn't make sense to put a negative amount there and not check anything.
Does anyone have an answer for this?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/20/09 09:45 PM
Originally Posted By: RR joker
Hey, they answered the signature line question!
Posted By: elcinoca
Re: RESPA changes 1-1-10 - 11/20/09 09:54 PM
Originally Posted By: RR joker
elcinoca...that may depend on the part of the country you live in...for us...it will be attorney's.
I guess I am getting hung up on the term service provider. We close real estate loans using attorneys, so they are the "Title Services" provider. The title insurance company (Lawyer's Title, Chicago Title, First American Land Title, etc.) issues the actual insurance policy, thus they are the "Lender's title insurance" provider.
To take this a step further, if we go to Block 5, the Attorney doesn't provide the Owner's title insurance -- the insurance company does.
I am making too much of this huh?
Posted By: ahou
Re: RESPA changes 1-1-10 - 11/20/09 10:45 PM
For no cost loans, you would check the second box in block 2 with a negative # in the column. Blk 1 would not be a negative #.
Example: Bank is paying $300 toward fees. All of the $100 orig chg and $200 for the 3rd party appraisal. Blk 1 lists orig chg as $100. Blk 2, 2nd ck off box, put $300 cr (out in the column put -$300). Then in A "Your Adj Orig Chg" you would put ($200).
Example: Bank is paying $300 toward fees. All of the $100 orig chg and $200 for the 3rd party appraisal. Blk 1 lists orig chg as $100. Blk 2, 2nd ck off box, put $300 cr (out in the column put -$300). Then in A "Your Adj Orig Chg" you would put ($200).
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 11/21/09 01:56 AM
Originally Posted By: Truffle Royale
Originally Posted By: RR joker
Hey, they answered the signature line question!
New FAQ dated 11/19/09 - yes, just 2 days after the last one page 9
28) Q: May a loan originator alter the GFE by adding signature lines to the GFE?
A: No. However, loan originators may develop practices and procedure to document the consumer's acknowledgement of receipt of the GFE. Loan originators may not refuse to provide a GFE based upon a consumer's refusal to acknowledge receipt of the GFE. Acknowledgment of receipt of a GFE, by itself, does not constitute an expression of an intention to proceed with the loan covered by the GFE.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 11/21/09 02:13 AM
When does a GFE expire? Page 10 of FAQ states the answer as: If a borrower does not express an intent to continue with an application within ten business days after the GFE is provided (or such longer time period specified by the loan originator), the loan originator is no longer bound by the GFE.
This is the only answer I can find about the GFE expiring. SO... if the borrower comes in on the 11th day and says "I want to proceed with the loan", the loan originator can then charge whatever they want on the HUD.
What am I missing?? How is everyone else planning on documenting "intent" within the 10 days or non-intent as of the 11th day?
This is the only answer I can find about the GFE expiring. SO... if the borrower comes in on the 11th day and says "I want to proceed with the loan", the loan originator can then charge whatever they want on the HUD.
What am I missing?? How is everyone else planning on documenting "intent" within the 10 days or non-intent as of the 11th day?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/21/09 02:17 PM
Originally Posted By: elcinoca
Originally Posted By: RR joker
elcinoca...that may depend on the part of the country you live in...for us...it will be attorney's.
I guess I am getting hung up on the term service provider. We close real estate loans using attorneys, so they are the "Title Services" provider. The title insurance company (Lawyer's Title, Chicago Title, First American Land Title, etc.) issues the actual insurance policy, thus they are the "Lender's title insurance" provider.
To take this a step further, if we go to Block 5, the Attorney doesn't provide the Owner's title insurance -- the insurance company does.
I am making too much of this huh?
We have the same structure here-attorneys handle the closing, and they order the title insurance through whoever they work with. I don't plan on listing that title insurance co as a provider since the cost is disclosed in box 4 and there is no requriement to list providers or break out costs in box 4.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/21/09 02:19 PM
Originally Posted By: jlroberts
When does a GFE expire? Page 10 of FAQ states the answer as: If a borrower does not express an intent to continue with an application within ten business days after the GFE is provided (or such longer time period specified by the loan originator), the loan originator is no longer bound by the GFE.
This is the only answer I can find about the GFE expiring. SO... if the borrower comes in on the 11th day and says "I want to proceed with the loan", the loan originator can then charge whatever they want on the HUD.
What am I missing?? How is everyone else planning on documenting "intent" within the 10 days or non-intent as of the 11th day?
This is the only answer I can find about the GFE expiring. SO... if the borrower comes in on the 11th day and says "I want to proceed with the loan", the loan originator can then charge whatever they want on the HUD.
What am I missing?? How is everyone else planning on documenting "intent" within the 10 days or non-intent as of the 11th day?
In that scenario if the borrower comes back on day 11, you are not obligated to the fees quoted back on day one-you need to issue a new GFE, but you are not bound by the fees quoted on the first GFE.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/23/09 01:59 PM
FWIW, I agree with SOX on both of the last two posts.
Posted By: bstritecky
Re: RESPA changes 1-1-10 - 11/23/09 02:38 PM
Can someone direct me to finding an answer to the following: On construction/perms we may do several inspections throughout the construction phase. Sometimes the inspections are done by bank staff and sometime by an appraisers. We typically charged a fee per inspection - can we just increase our origination fee and eliminate the inspections fee?
Posted By: creditcommander
Re: RESPA changes 1-1-10 - 11/23/09 02:47 PM
That is what I assumed also, but I read that box 2 and 3 were to be checked off only if a mortgage broker is involved, and box 2 was for the amount of the YSP. There is no mortgage broker on a home equity loan.
Posted By: bstritecky
Re: RESPA changes 1-1-10 - 11/23/09 02:48 PM
My next question: Can we go back to preapprovals? We have done these since the beginning of time - we take an application without a property address, do complete underwriting and verification and issue a GFE, early TIL and committment letter subject to certain conditions. We have never "required" the customer to provide the verification information but since they are requesting the preapproval they provide it. I'm still unclear as how to handle these based on my readings here.
If we issue a good faith estimate so we don't have issues with the verification portion - we will be bound to it for 10 days?
If we just issue an "information sheet" instead of a GFE - can we still do the verifiction portion?
If we issue a good faith estimate so we don't have issues with the verification portion - we will be bound to it for 10 days?
If we just issue an "information sheet" instead of a GFE - can we still do the verifiction portion?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/23/09 03:15 PM
You can do preapprovals, but I beleive it was mentioned somewhere in this thread when a borrower finds a property, it is not considered a "change of circumstance" , so you may not have quoted accurate fees from your initial GFE.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/23/09 04:40 PM
Originally Posted By: Trixie
Third Party Service Provders - Block 6- If the offer to purchase has listed Well, home inspection etc. Do we need to provide a Providers List? This is something the seller ususally pays for and is ordered by the Realtor. Very confusing how would the bank know who to list on the provider list and keep up on the fees.
Trixie-are these services that you as the lender require or are they simply contingencies in the sales agreement? If they are not lender required items, you would not need to worry about them.
Posted By: dottiec
Re: RESPA changes 1-1-10 - 11/23/09 04:40 PM
Originally Posted By: dottiec
I'm trying to understand when I use a credit in Block 2 and when I have to use Block 204 on the HUD-1 form for a junior lien.
We collect a fee of $141.50 to cover all closing costs on the junior lien. This is the exact amount it costs us provided there is only one tax parcel included on the mortgage.
Our loan involves a property that has two tax parcels. This will cost us an additional $5.00 in government recording fees. We know when we issue the GFE that we will not be collecting the $5.00 from the customer, the bank will pay it.
Since we are "splitting" the fee, do I show a credit in Line 2 of the GFE and can I close using a HUD-1A? Or do I leave Line 2 of the GFE N/A and use the HUD-1 to close with a credit in Line 204?
Thanks to anyone brave enough to attemp an answer!
We collect a fee of $141.50 to cover all closing costs on the junior lien. This is the exact amount it costs us provided there is only one tax parcel included on the mortgage.
Our loan involves a property that has two tax parcels. This will cost us an additional $5.00 in government recording fees. We know when we issue the GFE that we will not be collecting the $5.00 from the customer, the bank will pay it.
Since we are "splitting" the fee, do I show a credit in Line 2 of the GFE and can I close using a HUD-1A? Or do I leave Line 2 of the GFE N/A and use the HUD-1 to close with a credit in Line 204?
Thanks to anyone brave enough to attemp an answer!
Can anyone help me with this?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/23/09 04:41 PM
Becky, all of the new GFE changes only solidified our choice to do only prequalifications, not pre-approvals. You might want to consider doing the same.
The above quote is from my software company. Am I missing something or is this woman nuts? She thinks we don't have to use the new method beginning for apps after 1/1/10? Does the issuance of the HUD booklet have anything to do with this? Did I misinterpret something? aaarrrggghhhh. This is not the way to start a busy week!
Quote:
We are leaving the option on the customer (bank)as to when they actually begin using the new method. .... Also, keep in mind the new HUD booklet is still not available and these changes can not go into effect unless it is available as well.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/23/09 04:47 PM
Originally Posted By: Truffle Royale
Becky, all of the new GFE changes only solidified our choice to do only prequalifications, not pre-approvals. You might want to consider doing the same.
The above quote is from my software company. Am I missing something or is this woman nuts? She thinks we don't have to use the new method beginning for apps after 1/1/10? Does the issuance of the HUD booklet have anything to do with this? Did I misinterpret something? aaarrrggghhhh. This is not the way to start a busy week!
Quote:
We are leaving the option on the customer (bank)as to when they actually begin using the new method. .... Also, keep in mind the new HUD booklet is still not available and these changes can not go into effect unless it is available as well.
We could only hope she is correct, TR, however, in the OTS/HUD conf call, they made it crystal clear this is going forward-no reference to whether the HUD booklet would be available. Isn't the new format a mini hud booklet anyway? What else would a cust need to know?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/23/09 04:49 PM
Truf...they may be meaning you can begin using earlier if you want to? As far as the book? I see no delays just based on the SCB.
Posted By: bstritecky
Re: RESPA changes 1-1-10 - 11/23/09 04:53 PM
Truffle - I agree that we are going to have to change from preapprovals to prequals - I just met with loan origination and opertions to begin that process.
In addition, I agree your software company is nuts. I have never seen an exception to compliance until the book gets updated. There are many issues here that don't have logic so why then would we expect the book to be updated before we implement the changes???! (Sorry that is a sarcastic monday morning comment!)
Thanks for yor reponse.
In addition, I agree your software company is nuts. I have never seen an exception to compliance until the book gets updated. There are many issues here that don't have logic so why then would we expect the book to be updated before we implement the changes???! (Sorry that is a sarcastic monday morning comment!)
Thanks for yor reponse.
Posted By: dollars & sense
Re: RESPA changes 1-1-10 - 11/23/09 04:53 PM
Will the good faith list of required providers notice (currently on the back of our GFE's) go away with the use of the new form?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/23/09 04:53 PM
I'm so po'd at our software company. We're not going to get an update till hopefully 12/18. Then we can start running tests. Are you kidding me???!!! And, once we go live, it's all or nothing. So any loans I've taken an application for in 2009 that haven't closed yet, my system is going to force me to redisclose on the new GFE. Seriously, I'm spitting tacks here.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/23/09 04:56 PM
D&S-that is a great question-hadn't thought of that. In all the reading I have done I haven't seen a reference to that.
Posted By: dollars & sense
HELP-Yield Spread Premiums - 11/23/09 04:57 PM
If we recieve a yield spread premium from a secondary market company such as Fannie Mae do we need to disclouse this on the GFE or does the last statement on page 3 cover this?
Posted By: CompDat
Re: RESPA changes 1-1-10 - 11/23/09 05:16 PM
Originally Posted By: Truffle Royale
I'm so po'd at our software company. We're not going to get an update till hopefully 12/18. Then we can start running tests. Are you kidding me???!!! And, once we go live, it's all or nothing. So any loans I've taken an application for in 2009 that haven't closed yet, my system is going to force me to redisclose on the new GFE. Seriously, I'm spitting tacks here.
Ahh we must have the same software company.
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 11/23/09 05:20 PM
Hey Truffle - I know who your software company is. Because I got that little "news" last week. If you're like every other company in America, you have folks who are on vacation for the holidays - including both the IT people who INSTALL the upgrades and the people that test! - which includes me!!
They did send partial release notes this morning but not totally happy : (
They did send partial release notes this morning but not totally happy : (
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/23/09 05:29 PM
Originally Posted By: dollars & sense
Will the good faith list of required providers notice (currently on the back of our GFE's) go away with the use of the new form?
Yes, David stated that in his webinar.
Posted By: RR Joker
Re: HELP-Yield Spread Premiums - 11/23/09 05:54 PM
Originally Posted By: dollars & sense
If we recieve a yield spread premium from a secondary market company such as Fannie Mae do we need to disclouse this on the GFE or does the last statement on page 3 cover this?
It probably depends...are you defined as a broker? or do you do your own funding and sell later.
Posted By: dollars & sense
Re: HELP-Yield Spread Premiums - 11/23/09 05:56 PM
We are not defined as a broker. We do our own funding and sell the loan later. At that time we also retain the servicing.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/23/09 05:59 PM
Originally Posted By: pjs
Originally Posted By: dollars & sense
Will the good faith list of required providers notice (currently on the back of our GFE's) go away with the use of the new form?
Yes, David stated that in his webinar.
pjs-do you know if this is written somewhere-perhaps the FAQ's? I'd like that as back up.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/23/09 06:00 PM
Originally Posted By: CompDat
Originally Posted By: Truffle Royale
I'm so po'd at our software company. We're not going to get an update till hopefully 12/18. Then we can start running tests. Are you kidding me???!!! And, once we go live, it's all or nothing. So any loans I've taken an application for in 2009 that haven't closed yet, my system is going to force me to redisclose on the new GFE. Seriously, I'm spitting tacks here.
Ahh we must have the same software company.
Our software is going to have the old HUD settlement statement available on for loan applications dated before 1/1/10. We haven't had our update yet- they are waiting on the last word from HUD so they can tweek any thing they might need to.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/23/09 06:02 PM
Originally Posted By: Sox in 07
Originally Posted By: pjs
Originally Posted By: dollars & sense
Will the good faith list of required providers notice (currently on the back of our GFE's) go away with the use of the new form?
Yes, David stated that in his webinar.
pjs-do you know if this is written somewhere-perhaps the FAQ's? I'd like that as back up.
No I was looking for you all regarding that. Maybe David can pipe in. I was going to go look in the Federal Register to see.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/23/09 06:16 PM
I should point out that it was said in David's webinar regarding Required Settlement Service Providers the Lender Selects: There is no longer a requirement for the lender to disclose the use or nature of any specific required third party settlement service provider relationship.
Now it's called a Recommended Settlement Service Provider List (Appendix c to part 3500 -page 7045)
Timing: The same time the GFE is given ( no later than 3 business days after the lender receives an application)
List: RESPA FAQ GFE Written List of Providers starting on Page 11 under Written List of Providers.
Sounds like your recommended Settlement Service Provider List replaces the Required List.
Now it's called a Recommended Settlement Service Provider List (Appendix c to part 3500 -page 7045)
Timing: The same time the GFE is given ( no later than 3 business days after the lender receives an application)
List: RESPA FAQ GFE Written List of Providers starting on Page 11 under Written List of Providers.
Sounds like your recommended Settlement Service Provider List replaces the Required List.
Posted By: RR Joker
Re: HELP-Yield Spread Premiums - 11/23/09 06:26 PM
Originally Posted By: dollars & sense
We are not defined as a broker. We do our own funding and sell the loan later. At that time we also retain the servicing.
Bona fide transfers on the secondary market do not require disclosure (because they are RESPA exempt. SO...anything you make on the loan after-the-fact, doesn't apply.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/23/09 06:26 PM
Thanks pjs. Seems like for our situation, the list of providers is no longer needed since we do not allow the borrower to choose the appraiser, credit co, closing agent and mi company.
Posted By: AmyH
Re: RESPA changes 1-1-10 - 11/23/09 07:51 PM
Has anyone thought about documenting the applicant's intent to proceed with the application before starting the verification process? David's RESPA training commented on this and that was the first I had heard of it.
Posted By: Carter's Mom
Re: RESPA changes 1-1-10 - 11/23/09 07:55 PM
Can someone clarify with me please? Average charges...
The reg says "the average amount paid for a settlement service by one settlement service provider to another settlement service provider".
So does this mean if I used average charge for my appraisers, that I would need a separate average charge for each appraiser?
Or does it mean I can average the charges for all of my appraisers together for the same type of appraisal?
The reg says "the average amount paid for a settlement service by one settlement service provider to another settlement service provider".
So does this mean if I used average charge for my appraisers, that I would need a separate average charge for each appraiser?
Or does it mean I can average the charges for all of my appraisers together for the same type of appraisal?
Posted By: Jenn-Lynn
Re: RESPA changes 1-1-10 - 11/23/09 08:07 PM
I think you can say more than one appraiser. I am basing this off of the word "providers" (plural) in the last sentence of the paragraph below.
3500.8(b)(2) Use of average charge. “(i) The average charge for a settlement service shall be no more than the average amount paid for a settlement service by one settlement service provider to another settlement service provider on behalf of borrowers and sellers for a particular class of transactions involving federally related mortgage loans. The total amounts paid by borrowers and sellers for a settlement service based on the use of an average charge may not exceed the total amounts paid to the providers of that service for the particular class of transactions."
3500.8(b)(2) Use of average charge. “(i) The average charge for a settlement service shall be no more than the average amount paid for a settlement service by one settlement service provider to another settlement service provider on behalf of borrowers and sellers for a particular class of transactions involving federally related mortgage loans. The total amounts paid by borrowers and sellers for a settlement service based on the use of an average charge may not exceed the total amounts paid to the providers of that service for the particular class of transactions."
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/23/09 08:37 PM
Originally Posted By: AmyH
Has anyone thought about documenting the applicant's intent to proceed with the application before starting the verification process? David's RESPA training commented on this and that was the first I had heard of it.
David recommended a cover letter included with the GFE and P-TIL and anything else you are providing to the borrower. State in the letter ~ if you wish to proceed with the loan application, please provide (list the verification documents) as well as a check for (whatever $ amount you want as a deposit). If the borrower brings you these items they are expressing their intent to proceed.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/23/09 08:40 PM
Originally Posted By: AmyH
Has anyone thought about documenting the applicant's intent to proceed with the application before starting the verification process? David's RESPA training commented on this and that was the first I had heard of it.
The reg is clear you must have delivered the GFE AND received intent from the consumer before they can be charged any fees and before you ask them for any verification documents. If you read the entire preamble, HUD makes it clear they want disclosures to the applicant quickly, but they want borrower's to be able to slow down the process to shop.
I believe you send a cover letter with the GFE/P-TIL and inform the borrower what you need to proceed. If they provide it, they are expressing their intent to proceed. No need for a signature or disclosure. You might also have a checklist the LO completes that indicates they talked to the borrower. This will be something we'll have to wait and see how the examiners interpret.
BTW, FAQ #28 (in the GFE-General section, added 11/19/09) states "acknowledgment of receipt of a GFE, by itself does not constitute an expression of t an intention to proceed with the loan covered by the GFE."
Posted By: Jenn-Lynn
Re: RESPA changes 1-1-10 - 11/23/09 08:41 PM
I think the 11/19/09 FAQs back this up by saying (Average Charges, Question 4, page 31) that the calculation is based on "the average amount paid for the settlement service for the particular class of transaction..."
I think the emphasis is on the service. HUD did not expressly prohibit having more than one provider in a service calculation. This Q & A also reiterates that "HUD does not prescribe a particular method for calculating the average charge..."
I think the emphasis is on the service. HUD did not expressly prohibit having more than one provider in a service calculation. This Q & A also reiterates that "HUD does not prescribe a particular method for calculating the average charge..."
Posted By: kristin09
Re: RESPA changes 1-1-10 - 11/23/09 09:12 PM
Originally Posted By: David Dickinson
Originally Posted By: AmyH
Has anyone thought about documenting the applicant's intent to proceed with the application before starting the verification process? David's RESPA training commented on this and that was the first I had heard of it.
The reg is clear you must have delivered the GFE AND received intent from the consumer before they can be charged any fees and before you ask them for any verification documents. If you read the entire preamble, HUD makes it clear they want disclosures to the applicant quickly, but they want borrower's to be able to slow down the process to shop.
I believe you send a cover letter with the GFE/P-TIL and inform the borrower what you need to proceed. If they provide it, they are expressing their intent to proceed. No need for a signature or disclosure. You might also have a checklist the LO completes that indicates they talked to the borrower. This will be something we'll have to wait and see how the examiners interpret.
BTW, FAQ #28 (in the GFE-General section, added 11/19/09) states "acknowledgment of receipt of a GFE, by itself does not constitute an expression of t an intention to proceed with the loan covered by the GFE."
We often have in-person mortgage applications where the borrower is bringing in verification documents. We plan on documenting in our procedures that the issuance of the GFE is not conditional on the verification documents and the fee check is the "intent to proceed" but are you saying that after we hand over the GFE, we cannot take those verification docs they have brought in? Do we have to literally send them away and only get those verification documents along with the "intent to proceed" (i.e., the fee check)?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/23/09 09:14 PM
If they bring them to you, you're fine. You can take them. The point is you can't ask for any verification docs until the GFE is issued and they express an intent to proceed.
Posted By: kristin09
Re: RESPA changes 1-1-10 - 11/23/09 09:20 PM
Thank you DAvid
Posted By: In Need of Help 101
Re: RESPA changes 1-1-10 - 11/23/09 09:39 PM
Is the revised Special Information Booklet available to order yet?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/23/09 09:45 PM
Not yet.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 11/23/09 10:15 PM
Broker fees question. We do maybe one deal a year that involves a broker so I need a little help on this one. We used to just add thier fees on an empty line in the 800 series. I have read the FAQ and it says the broker fees goes in block 2, either box 2 or 3 but neither one of the choices make sense to me to mark becuase they both state it is for the interest rate, which it is not. It's not a credit so box 2 doesn't apply. Box 3 says it is charge for the interest rate they chose, which it is not. Basically they are paying that extra fee because they didn't come straight to us for the loan. Since it doesn't fit any of the descriptions in block 2, and the borrower chose the broker, we did not require it, where the heck (excuse me) do I put it?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/23/09 10:25 PM
Check out this concerning broker's and YSPs:
http://www.respalawyer.com/2009/10/respa_reform_ivy_jackson_issue.html
http://www.respalawyer.com/2009/10/respa_reform_ivy_jackson_issue.html
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 11/23/09 10:28 PM
Originally Posted By: Carter's Mom
Can someone clarify with me please? Average charges...
The reg says "the average amount paid for a settlement service by one settlement service provider to another settlement service provider".
So does this mean if I used average charge for my appraisers, that I would need a separate average charge for each appraiser?
Or does it mean I can average the charges for all of my appraisers together for the same type of appraisal?
The reg says "the average amount paid for a settlement service by one settlement service provider to another settlement service provider".
So does this mean if I used average charge for my appraisers, that I would need a separate average charge for each appraiser?
Or does it mean I can average the charges for all of my appraisers together for the same type of appraisal?
I don't know about the rest of you, but most of our appraisal firms have tiered pricing, based on the value of the property. Because of that, we can not use the average pricing method. According to the Q&A, an average charge may not be used where the charge for the service is based on the property value.
And since we will not know at the time of providing the GFE which appraisal firm will get the assignment, I'm not sure what figure we will use for an appraisal fee.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 11/23/09 10:55 PM
Originally Posted By: David Dickinson
Check out this concerning broker's and YSPs:
http://www.respalawyer.com/2009/10/respa_reform_ivy_jackson_issue.html
http://www.respalawyer.com/2009/10/respa_reform_ivy_jackson_issue.html
Sorry, I still don't understand. We close our own loans on hold them in our portfolio so there is no YSP. We charge a 1% fee but the broker charges them 1.50%, so the borrower is charged 2.50%. How do we list that?
I've also been reading some more on the broker deals. If I understand what I am reading, the broker is the one that actually would be preparing the GFE and then we have to live with the fees they quoted? Does a broker usually know what institution they are having the borrower go to for financing to even be able to quote our fees? As you can tell I know nothing about broker deals.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/23/09 11:20 PM
Originally Posted By: jlroberts
Sorry, I still don't understand. We close our own loans on hold them in our portfolio so there is no YSP. We charge a 1% fee but the broker charges them 1.50%, so the borrower is charged 2.50%. How do we list that?
Just because you close and hold the loans doesn't mean there isn't a YSP. A YSP is the fee you pay to the broker. They MUST be disclosed on the GFE/HUD-1.
Quote:
I've also been reading some more on the broker deals. If I understand what I am reading, the broker is the one that actually would be preparing the GFE and then we have to live with the fees they quoted?
Crazy, but true.
Quote:
Does a broker usually know what institution they are having the borrower go to for financing to even be able to quote our fees? As you can tell I know nothing about broker deals.
That depends on your brokers and your institution. You'll need to discuss this with your lenders.
Posted By: Em
Re: RESPA changes 1-1-10 - 11/24/09 02:54 PM
Becky originally posted this question and i didnt see a response and we are in the same boat. How are people addressing this situation? "Becky S.
Can someone direct me to finding an answer to the following: On construction/perms we may do several inspections throughout the construction phase. Sometimes the inspections are done by bank staff and sometime by an appraisers. We typically charged a fee per inspection - can we just increase our origination fee and eliminate the inspections fee?"
Also, along the same lines, for each disbursement, we get a disbursement endorsement from the title company. How can we determine an amount to put with the title fees if we are uncertain with how many draws or disbursement endorsements we will need?
Can someone direct me to finding an answer to the following: On construction/perms we may do several inspections throughout the construction phase. Sometimes the inspections are done by bank staff and sometime by an appraisers. We typically charged a fee per inspection - can we just increase our origination fee and eliminate the inspections fee?"
Also, along the same lines, for each disbursement, we get a disbursement endorsement from the title company. How can we determine an amount to put with the title fees if we are uncertain with how many draws or disbursement endorsements we will need?
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 11/24/09 03:21 PM
Does anyone know if we can purchase the settlement cost booklet yet? What is the link. For some reason, I can't find it.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/24/09 03:34 PM
Originally Posted By: ahkcompliance
Does anyone know if we can purchase the settlement cost booklet yet? What is the link. For some reason, I can't find it.
You don't want to purchase the books when you can order them through the HUD website for no fee. I tried to pre-order from HUD but they told me that the books were not ready and to call back the first week of 1-2010 to see if they were done.
Our loan software dealer is trying to get us to buy the books from them. They are not cheap. We are going through HUD when the books are done.
Posted By: Em
Re: RESPA changes 1-1-10 - 11/24/09 03:34 PM
It was my understanding that it has not been updated yet.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/24/09 03:45 PM
It hasn't been update yet. Here is HUD's distribution center phone # 1-800-767-7468
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 11/24/09 03:47 PM
Thanks!
I am going through the GFE and in block three do we need to seperate the flood fee out into initial and LOL? On the old GFE, we have always seperated out the intial fee and life of loan monitoring fee since the LOL is a prepaid finance charge.
I am going through the GFE and in block three do we need to seperate the flood fee out into initial and LOL? On the old GFE, we have always seperated out the intial fee and life of loan monitoring fee since the LOL is a prepaid finance charge.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/24/09 03:58 PM
No problem.
I've seen it written with flood determination/life of loan and the full amount on the GFE. The LOL is a prepaid so it would carry to the ETIL.
David or the others could answer that question I'm sure better than I did for you.
I've seen it written with flood determination/life of loan and the full amount on the GFE. The LOL is a prepaid so it would carry to the ETIL.
David or the others could answer that question I'm sure better than I did for you.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 11/24/09 04:12 PM
We have been told in the past to seperate out since one is a prepaid finance charge so now I wonder if we will still need to seperate.
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 11/24/09 04:39 PM
Keep in mind that calculation of prepaid finance charge is a Regulation Z issue, and disclosure of closing costs is a RESPA issue. And every time an interplay of the two regulations was addressed in the RESPA Q&A, HUD basically punted, and would not opine on treatment under Reg Z.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/24/09 04:50 PM
We list Flood as one fee on both the HUD and GFE. Been ok with our Fed examiners for years and the ones I've got are nitpickers, believe me.
Yea, Sinatra, I love the way HUD punts.
Yea, Sinatra, I love the way HUD punts.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 11/24/09 04:51 PM
Thanks for the replies.
Posted By: Bullseye
Re: RESPA changes 1-1-10 - 11/24/09 05:43 PM
I apologize if this has been asked - I haven't seen it addressed.
The list of service providers for which the borrowers can choose needs to be provided with the GFE, correct? If the borrower is in front of you, as you prepare the GFE, can you request the borrower choose off the list at that time so you can put the fee that that particular service provider generally charges on the GFE? Or do they have a certain timeframe for which they can choose the service provider? Or am I totally confused?? Wait....don't answer that! Thank you!
The list of service providers for which the borrowers can choose needs to be provided with the GFE, correct? If the borrower is in front of you, as you prepare the GFE, can you request the borrower choose off the list at that time so you can put the fee that that particular service provider generally charges on the GFE? Or do they have a certain timeframe for which they can choose the service provider? Or am I totally confused??
Wait....don't answer that! Thank you!
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/24/09 05:48 PM
Just got our first look at the new docs as our vendor will be printing them out. To my suprise they have added a signature line to page three of the GFE.
Also, to the GFE they are footnoting each page with the loan number. I believe this would be ok, but would appreciate others thoughts on this.
They also are making the GFE a 8.5 x 14 size paper not a 8.5 x 11. Not sure how this will fly with HUD.
For the HUD they "added" a signature confirmation page. I really do not consider this an alteration to the HUD as it simply documents receipt of the HUD one.
Also, to the GFE they are footnoting each page with the loan number. I believe this would be ok, but would appreciate others thoughts on this.
They also are making the GFE a 8.5 x 14 size paper not a 8.5 x 11. Not sure how this will fly with HUD.
For the HUD they "added" a signature confirmation page. I really do not consider this an alteration to the HUD as it simply documents receipt of the HUD one.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/24/09 05:56 PM
Thanks David for the Q&A from your webinar!
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/24/09 05:59 PM
I thought you couldn't add to the GFE except those vertical or horizontal lines in Block 3.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/24/09 06:56 PM
Originally Posted By: pjs
I thought you couldn't add to the GFE except those vertical or horizontal lines in Block 3.
Actually according to the FAQ,
8) Q: There are not enough lines on the GFE or the HUD-1 to show all of the charges that are appropriate for some of the categories. Where should these charges be listed?
A: Additional lines may be added to Blocks 3, 6 and 11 of the GFE. Additional lines may also be added to the HUD-1.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/24/09 07:08 PM
Originally Posted By: DD Regs
Just got our first look at the new docs as our vendor will be printing them out. To my suprise they have added a signature line to page three of the GFE.
Also, to the GFE they are footnoting each page with the loan number. I believe this would be ok, but would appreciate others thoughts on this.
They also are making the GFE a 8.5 x 14 size paper not a 8.5 x 11. Not sure how this will fly with HUD.
For the HUD they "added" a signature confirmation page. I really do not consider this an alteration to the HUD as it simply documents receipt of the HUD one.
Also, to the GFE they are footnoting each page with the loan number. I believe this would be ok, but would appreciate others thoughts on this.
They also are making the GFE a 8.5 x 14 size paper not a 8.5 x 11. Not sure how this will fly with HUD.
For the HUD they "added" a signature confirmation page. I really do not consider this an alteration to the HUD as it simply documents receipt of the HUD one.
Quote:
New FAQ dated 11/19/09
28) Q: May a loan originator alter the GFE by adding signature lines to the GFE?
A: No. However, loan originators may develop practices and procedure to document the consumer's acknowledgement of receipt of the GFE. Loan originators may not refuse to provide a GFE based upon a consumer's refusal to acknowledge receipt of the GFE. Acknowledgment of receipt of a GFE, by itself, does not constitute an expression of an intention to proceed with the loan covered by the GFE.
28) Q: May a loan originator alter the GFE by adding signature lines to the GFE?
A: No. However, loan originators may develop practices and procedure to document the consumer's acknowledgement of receipt of the GFE. Loan originators may not refuse to provide a GFE based upon a consumer's refusal to acknowledge receipt of the GFE. Acknowledgment of receipt of a GFE, by itself, does not constitute an expression of an intention to proceed with the loan covered by the GFE.
In my best Sesame Street voice: One of these things is not like the other. One of these things just doesn't belong. Can you tell which thing is not like the other by the time I finish this song?
So, who's your provider, DD? Why do they think they can add signature lines?
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 11/24/09 07:23 PM
Am I missing it completely? I don't see where on teh GFE property taxes are disclosed? Are we not required to disclose anymore?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/24/09 07:27 PM
Originally Posted By: ahkcompliance
Am I missing it completely? I don't see where on teh GFE property taxes are disclosed? Are we not required to disclose anymore?
Other than the beginning escrow balance, no.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 11/24/09 07:36 PM
So, if no escrow none at all.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 11/24/09 07:36 PM
Would it still be disclosed on the HUD on line 905?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/24/09 07:46 PM
Taxes are not listed on the GFE or HUD-1/1A, unless they are delinquent. Then they show up in line 104/105.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/24/09 07:49 PM
Originally Posted By: pjs
Thanks David for the Q&A from your webinar!
You're welcome! That was a doozy. 253 questions to answer and many had multiple questions within one. Writing out all of the answers took A LOT of time. Glad it's over. Hope it's helpful to all of you.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/24/09 07:53 PM
Originally Posted By: Sinatra Fan
Keep in mind that calculation of prepaid finance charge is a Regulation Z issue, and disclosure of closing costs is a RESPA issue. And every time an interplay of the two regulations was addressed in the RESPA Q&A, HUD basically punted, and would not opine on treatment under Reg Z.
Exactly! Well said Sinatra.
You don't need to split out flood determination fees on the GFE and HUD-1/1A. That is a TIL (finance charge) issue. RESPA doesn't care.
Another thing to think about is that with the new TIL proposal EVERY fee will be a finance charge, so it won't matter.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 11/24/09 07:57 PM
Can you point me in the direction where taxes are not required on the HUD? I have a loan officer not agreeing with that.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/24/09 08:02 PM
The escrow amounts need to be shown as they are now, ahk...the difference will be they (all escrows) will be shown on the line as references including the agg adj. The only figure in the column will be the beginning escrow balance.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/24/09 08:09 PM
Originally Posted By: ahkcompliance
Can you point me in the direction where taxes are not required on the HUD? I have a loan officer not agreeing with that.
The better question is point me where taxes ARE required on the HUD-1/1A.
If you read Appendix A of RESPA, you won't find any reference to taxes other than the proration from seller to borrower (500/200 series). It's gone from the 900s.
Posted By: Skittles
Re: RESPA changes 1-1-10 - 11/24/09 08:24 PM
We just got finished with an FDIC compliance exam. I asked the examiner about the taxes. He checked and got back with me. He said they are not required <now this is the Chicago FDIC> unless the account is going to have escrow.
Posted By: RUKiddingMe
Re: RESPA changes 1-1-10 - 11/24/09 08:53 PM
New Question:
Suppose the bank identifies an appraiser as 'settlement services that we select' on the GFE, but the appraiser cannot perform the service in a timely manner so we switched to a new appraiser for this transaction; the new appraiser's fee is higher. Does this constitute a 'changed circumstance'?
Suppose the bank identifies an appraiser as 'settlement services that we select' on the GFE, but the appraiser cannot perform the service in a timely manner so we switched to a new appraiser for this transaction; the new appraiser's fee is higher. Does this constitute a 'changed circumstance'?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/24/09 08:59 PM
I don't believe this is a changed circumstance. Stinks doesn't it.
Posted By: newyork
Re: RESPA changes 1-1-10 - 11/24/09 09:43 PM
If it does not meet the "changed circumstance" criteria, and the appraisers fee is beyond the 10% tolerance, does that mean we cannot re-disclose the new fee on a new GFE, if the error was found before closing since the appraiser not finish the transaction on time is not a "changed circumstance?"
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/24/09 09:45 PM
Originally Posted By: David Dickinson
Originally Posted By: Sinatra Fan
Keep in mind that calculation of prepaid finance charge is a Regulation Z issue, and disclosure of closing costs is a RESPA issue. And every time an interplay of the two regulations was addressed in the RESPA Q&A, HUD basically punted, and would not opine on treatment under Reg Z.
Exactly! Well said Sinatra.
You don't need to split out flood determination fees on the GFE and HUD-1/1A. That is a TIL (finance charge) issue. RESPA doesn't care.
Another thing to think about is that with the new TIL proposal EVERY fee will be a finance charge, so it won't matter.
HOORAY!!!!!!!!!!!!!!!!!!! REGARDING THE FINANCE CHARGES!!!
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/24/09 09:46 PM
Originally Posted By: Bullseye
I apologize if this has been asked - I haven't seen it addressed.
The list of service providers for which the borrowers can choose needs to be provided with the GFE, correct? If the borrower is in front of you, as you prepare the GFE, can you request the borrower choose off the list at that time so you can put the fee that that particular service provider generally charges on the GFE? Or do they have a certain timeframe for which they can choose the service provider? Or am I totally confused?? Wait....don't answer that! Thank you!
The list of service providers for which the borrowers can choose needs to be provided with the GFE, correct? If the borrower is in front of you, as you prepare the GFE, can you request the borrower choose off the list at that time so you can put the fee that that particular service provider generally charges on the GFE? Or do they have a certain timeframe for which they can choose the service provider? Or am I totally confused??
Wait....don't answer that! Thank you! Can someone give their thoughts on this question? thanks
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/24/09 09:55 PM
I would guess that until a customer chooses a provider, you can't complete the GFE. When they make their decisions as to which providers to use, you can complete the GFE accordingly. JMHO
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/24/09 09:58 PM
Really! That would solve some problems about estimation- but that answer is too easy and doesn't fit this Reg. Thanks!
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 11/24/09 10:12 PM
I am filling out a training HUD statement, if a client pays for the appraisal POC--how is that disclosed on the HUD?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/24/09 10:14 PM
Originally Posted By: guerrero
If it does not meet the "changed circumstance" criteria, and the appraisers fee is beyond the 10% tolerance, does that mean we cannot re-disclose the new fee on a new GFE, if the error was found before closing since the appraiser not finish the transaction on time is not a "changed circumstance?"
Correct - you cannot reissue a new GFE with the higher fee. The HUD-1/1A will list the higher fee in the HUD column of the tolerance table. IF the total of this column is >110% of the GFE column total, you'll have to cure (eat) the difference.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/24/09 10:18 PM
Originally Posted By: ahkcompliance
I am filling out a training HUD statement, if a client pays for the appraisal POC--how is that disclosed on the HUD?
List on line 804: "appraisal fee to [name of company] $xxx (POC - Borrower)". No dollar amount will go in the borrower's column. Then you list the fee in the tolerance table. POC doesn't matter for the GFE or tolerance tables.
Posted By: Sheldon Hendrix
Re: RESPA changes 1-1-10 - 11/24/09 10:26 PM
How do we dislcose credit life premiums on the HUD if all of the premiums are financed? I am being told to put them in the 900 series.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/24/09 10:32 PM
Whether fees are financed, doesn't matter for the Settlement Statement. You are correct, these go in the 900's.
Posted By: Frank
Re: RESPA changes 1-1-10 - 11/24/09 10:50 PM
Originally Posted By: Compliance Rules
How do we dislcose credit life premiums on the HUD if all of the premiums are financed? I am being told to put them in the 900 series.
Where did you show credit life on the GFE?
Posted By: Sheldon Hendrix
Re: RESPA changes 1-1-10 - 11/24/09 11:04 PM
Originally Posted By: Go Hogs Go
Originally Posted By: Compliance Rules
How do we dislcose credit life premiums on the HUD if all of the premiums are financed? I am being told to put them in the 900 series.
Where did you show credit life on the GFE?
Not shown because it is not required. It's optional to the borrower.
Posted By: ForceFull1
Re: RESPA changes 1-1-10 - 11/24/09 11:09 PM
DU and LP underwriting charges. Do they belong in block 1 as part of the origination charge or in block 3 as a required service?
I've read up on the earlier discussions on taxes, but am not sure that this scenario has been addressed: if a first loan payment will fall after a tax payment is due, and we plan to collect the tax payment at closing, should the tax payment be disclosed on the GFE? If so, in what section?
I've read up on the earlier discussions on taxes, but am not sure that this scenario has been addressed: if a first loan payment will fall after a tax payment is due, and we plan to collect the tax payment at closing, should the tax payment be disclosed on the GFE? If so, in what section?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 11/24/09 11:20 PM
Ditto the DU/LP charge question...
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/25/09 12:53 PM
David answered the LP or DU fees in the Q&A of his webinar.
Underwriting fees (LP or DU) should be disclosed in Block 1 of the GFE. A credit should be listed in Block 2 if the lender knows prior to issuance of the GFE that it will absorb the fee.
Underwriting fees (LP or DU) should be disclosed in Block 1 of the GFE. A credit should be listed in Block 2 if the lender knows prior to issuance of the GFE that it will absorb the fee.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/25/09 01:29 PM
Originally Posted By: pjs
Really! That would solve some problems about estimation- but that answer is too easy and doesn't fit this Reg. Thanks!
pjs-I don't know how a GFE can be issued if they haven't chosen a provider.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/25/09 01:51 PM
Originally Posted By: Sox in 07
Originally Posted By: pjs
Really! That would solve some problems about estimation- but that answer is too easy and doesn't fit this Reg. Thanks!
pjs-I don't know how a GFE can be issued if they haven't chosen a provider.
Why not? I thought that was the entire basis behind using the highest bid on the list if you don't know who it will be yet.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/25/09 01:53 PM
So go with a high quote as a CYA, then they let you know who to use?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/25/09 01:54 PM
Quote:
pjs-I don't know how a GFE can be issued if they haven't chosen a provider.
You must issue a GFE BEFORE they pick a provider. The borrower doesn't know WHAT you require or WHERE to get the services from. That's what the GFE tells them.
If you want, you can choose all providers. Then you'll know the fees. If you allow them to shop, you can still provide the estimated cost of your recommended providers. IF they choose one of those, you get a 10% tolerance. If they don't choose one of your recommended providers, it's an unlimited tolerance. I guess I don't see the problem with not knowing the provider and issuing a GFE.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 11/25/09 02:13 PM
Originally Posted By: Truffle Royale
Originally Posted By: DD Regs
Just got our first look at the new docs as our vendor will be printing them out. To my suprise they have added a signature line to page three of the GFE.
Also, to the GFE they are footnoting each page with the loan number. I believe this would be ok, but would appreciate others thoughts on this.
They also are making the GFE a 8.5 x 14 size paper not a 8.5 x 11. Not sure how this will fly with HUD.
For the HUD they "added" a signature confirmation page. I really do not consider this an alteration to the HUD as it simply documents receipt of the HUD one.
Also, to the GFE they are footnoting each page with the loan number. I believe this would be ok, but would appreciate others thoughts on this.
They also are making the GFE a 8.5 x 14 size paper not a 8.5 x 11. Not sure how this will fly with HUD.
For the HUD they "added" a signature confirmation page. I really do not consider this an alteration to the HUD as it simply documents receipt of the HUD one.
Quote:
New FAQ dated 11/19/09
28) Q: May a loan originator alter the GFE by adding signature lines to the GFE?
A: No. However, loan originators may develop practices and procedure to document the consumer's acknowledgement of receipt of the GFE. Loan originators may not refuse to provide a GFE based upon a consumer's refusal to acknowledge receipt of the GFE. Acknowledgment of receipt of a GFE, by itself, does not constitute an expression of an intention to proceed with the loan covered by the GFE.
28) Q: May a loan originator alter the GFE by adding signature lines to the GFE?
A: No. However, loan originators may develop practices and procedure to document the consumer's acknowledgement of receipt of the GFE. Loan originators may not refuse to provide a GFE based upon a consumer's refusal to acknowledge receipt of the GFE. Acknowledgment of receipt of a GFE, by itself, does not constitute an expression of an intention to proceed with the loan covered by the GFE.
In my best Sesame Street voice: One of these things is not like the other. One of these things just doesn't belong. Can you tell which thing is not like the other by the time I finish this song?
So, who's your provider, DD? Why do they think they can add signature lines?
LOL, I do that Sesame Street thing all the time with my kids. They look at me like...well, that's another story.
MORVision. And I don't agree that they can add the Signature line tot he GFE, sorry if I gave that impression. I also don't believe it is correct to make it 8.5 x 14. That is not what size the model is.
Far as the Signature Page for teh HUD, that is permissible, especially the way they do it. IT is a seperate page that just shows they reviewed the HUD and that it is accurate to the best of their knowledge.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 11/25/09 02:16 PM
Originally Posted By: Sox in 07
I would guess that until a customer chooses a provider, you can't complete the GFE. When they make their decisions as to which providers to use, you can complete the GFE accordingly. JMHO
Originally Posted By: pjs
Really! That would solve some problems about estimation- but that answer is too easy and doesn't fit this Reg. Thanks!
Read Daves response to the same questions I asked
#1260651 - 10/02/09 09:41 AM Re: RESPA changes 1-1-10 [Re: jlroberts]
He says: You won't know who they are using until AFTER the GFE is issued. You must make your best guess of the fee BEFORE they choose a company and list that fee on the GFE.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 11/25/09 02:20 PM
OOPs. I started this reply when I came to work this am and just got back to it. I didn't see that Dave already responded.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/25/09 02:21 PM
Thanks all for the provider list answers.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/25/09 02:22 PM
I'm so glad THAT got cleared back up...I thought I had missed something somewhere along the way...good GOLLY miss MOLLY!
I love RESPA, I love RESPA, I love RESPA....really, I do.(not)
I love RESPA, I love RESPA, I love RESPA....really, I do.(not)
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/25/09 02:24 PM
Originally Posted By: jlroberts
Originally Posted By: Sox in 07
I would guess that until a customer chooses a provider, you can't complete the GFE. When they make their decisions as to which providers to use, you can complete the GFE accordingly. JMHO
Originally Posted By: pjs
Really! That would solve some problems about estimation- but that answer is too easy and doesn't fit this Reg. Thanks!
Read Daves response to the same questions I asked
#1260651 - 10/02/09 09:41 AM Re: RESPA changes 1-1-10 [Re: jlroberts]
He says: You won't know who they are using until AFTER the GFE is issued. You must make your best guess of the fee BEFORE they choose a company and list that fee on the GFE.
Fair enough. I guess I need to clear out the cobwebs.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 11/25/09 02:26 PM
Originally Posted By: DD Regs
MORVision. And I don't agree that they can add the Signature line tot he GFE, sorry if I gave that impression. I also don't believe it is correct to make it 8.5 x 14. That is not what size the model is. I agree they cannot add the sig line per the 11/19 Q&A, but the size to me is not an issue... we can add lines if we need to to certain blocks, and in doing so may require you to extend the form... the x 14 would not concern me.
Far as the Signature Page for teh HUD, that is permissible, especially the way they do it. IT is a seperate page that just shows they reviewed the HUD and that it is accurate to the best of their knowledge. Agreed
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/25/09 02:29 PM
Originally Posted By: RR joker
I'm so glad THAT got cleared back up...I thought I had missed something somewhere along the way...good GOLLY miss MOLLY!
I love RESPA, I love RESPA, I love RESPA....really, I do.(not)
I love RESPA, I love RESPA, I love RESPA....really, I do.(not)
My problem I can read it and understand it and get it in my head then something else comes along to question my thought process and then I get confused.
Posted By: Frank
Re: RESPA changes 1-1-10 - 11/25/09 02:33 PM
Originally Posted By: Compliance Rules
Originally Posted By: Go Hogs Go
Originally Posted By: Compliance Rules
How do we dislcose credit life premiums on the HUD if all of the premiums are financed? I am being told to put them in the 900 series.
Where did you show credit life on the GFE?
Not shown because it is not required. It's optional to the borrower.
Here's my thinking on it and I ran this by HUD (the previously mentioned Cheryl) who said it would work (of course anything they tell you is unofficial). Credit life is part of the balance of the loan which shows up on the GFE under "Your initial loan amount is ". Like you say, there's no explicit disclosure of it on the GFE. The instructions for the HUD-1 and the recently updated FAQ state that Lines 104 and 105 are for additional amounts owed by the borrower, such as charges that were not listed on the GFE. This seems to fit credit life perfectly. In addition if you list it here instead of the 900 series, it won't show up on the comparison chart on the HUD-1, thus looking strange with a charge in the HUD-1 column for credit life and a blank for the GFE column. Like I said, that's the unofficial take on the issue.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/25/09 03:08 PM
Quote:
Credit life is part of the balance of the loan which shows up on the GFE under "Your initial loan amount is ". Like you say, there's no explicit disclosure of it on the GFE. The instructions for the HUD-1 and the recently updated FAQ state that Lines 104 and 105 are for additional amounts owed by the borrower, such as charges that were not listed on the GFE. This seems to fit credit life perfectly. In addition if you list it here instead of the 900 series, it won't show up on the comparison chart on the HUD-1, thus looking strange with a charge in the HUD-1 column for credit life and a blank for the GFE column. Like I said, that's the unofficial take on the issue.
Everything financed is part of the balance of the loan. With your logic, I wouldn't need to show the appraisal, credit report, etc. Appendix A specifically identifies optional insurance in the 900s. You still won't list it in the comparison chart.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 11/25/09 03:52 PM
I am missing something but I had heard and don't recall the source that POC items should not be listed on the HUD? I know POC items cannot be on the GFE, but do you just include them in the amount then?
For example, a release fee is POC do we include the amount in the GFE block and then I don't see on the HUD you can list as POC--not enough room.
For example, a release fee is POC do we include the amount in the GFE block and then I don't see on the HUD you can list as POC--not enough room.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/25/09 03:57 PM
POC items are not identified as such on the GFE, but they MUST be listed on the 2nd page of the HUD. They aren't identified as such in lines 801-803 (FAQ #4 - 800 section) and they aren't identified as POC in the tolerance tables.
Posted By: misha
Re: RESPA changes 1-1-10 - 11/25/09 04:58 PM
Would like to go back to the prequalification discussion - I'm sure there's something I'm not thinking of, but here's my scenario.
Client comes in without an property address, but says he's going to start looking for a house - thinks it will be in the $200,000 range. We give a GFE, do our verifications & provide a prequal letter. He comes back next week - found a house, but it's $250,000. We can do a revised GFE because of changed circumstances.
Let's say he had found a house for $200,000 - why should I worry about the fact that I can't give a new GFE simply because I now have an address? Chances are it's in the same county as originally anticipated, so recording, etc. fees should be similar - what am I missing?
Client comes in without an property address, but says he's going to start looking for a house - thinks it will be in the $200,000 range. We give a GFE, do our verifications & provide a prequal letter. He comes back next week - found a house, but it's $250,000. We can do a revised GFE because of changed circumstances.
Let's say he had found a house for $200,000 - why should I worry about the fact that I can't give a new GFE simply because I now have an address? Chances are it's in the same county as originally anticipated, so recording, etc. fees should be similar - what am I missing?
Posted By: kristin09
Re: RESPA changes 1-1-10 - 11/25/09 04:59 PM
Hello,
In the BOL webinar Qand A's you answered the following question:
GFE Block 1 vs. Block 2 : Our Origination Charge - or the credit
or debits that affect this loan.
Example: We charge a 1% loan fee, a doc prep fee and we do our own closings
so we have a closing fee (I am saying all of these go in block 1).
Then in Block 2 we have FNMA / FREDDIE Loan Level Price adjustments and
FNMA $25.00 DU fee and let’s say the buyer wants to pay a fee to buy down the
rate (I am saying we will total these all up and net out what box to check either
positive or negative). LLPA of 1000.00 for cash out + 25.00 DU – 250.00 for a
good credit score + 1% for buy down = a positive so it would be a charge of XX
$$ in box 2.
Answer: We agree with your statements. Reference FAQ #5 in “GFE – Block
2”.
However, when you read the FAQ #5, it is discussing LLPA in the context of a mortgage broker. Therefore, we assumed that a Fannie Mae LLPA is included in the origination charge and you would go with Box 1.
Am I incorrect?
In the BOL webinar Qand A's you answered the following question:
GFE Block 1 vs. Block 2 : Our Origination Charge - or the credit
or debits that affect this loan.
Example: We charge a 1% loan fee, a doc prep fee and we do our own closings
so we have a closing fee (I am saying all of these go in block 1).
Then in Block 2 we have FNMA / FREDDIE Loan Level Price adjustments and
FNMA $25.00 DU fee and let’s say the buyer wants to pay a fee to buy down the
rate (I am saying we will total these all up and net out what box to check either
positive or negative). LLPA of 1000.00 for cash out + 25.00 DU – 250.00 for a
good credit score + 1% for buy down = a positive so it would be a charge of XX
$$ in box 2.
Answer: We agree with your statements. Reference FAQ #5 in “GFE – Block
2”.
However, when you read the FAQ #5, it is discussing LLPA in the context of a mortgage broker. Therefore, we assumed that a Fannie Mae LLPA is included in the origination charge and you would go with Box 1.
Am I incorrect?
Posted By: Frank
Re: RESPA changes 1-1-10 - 11/25/09 05:02 PM
Originally Posted By: David Dickinson
Quote:
Credit life is part of the balance of the loan which shows up on the GFE under "Your initial loan amount is ". Like you say, there's no explicit disclosure of it on the GFE. The instructions for the HUD-1 and the recently updated FAQ state that Lines 104 and 105 are for additional amounts owed by the borrower, such as charges that were not listed on the GFE. This seems to fit credit life perfectly. In addition if you list it here instead of the 900 series, it won't show up on the comparison chart on the HUD-1, thus looking strange with a charge in the HUD-1 column for credit life and a blank for the GFE column. Like I said, that's the unofficial take on the issue.
Everything financed is part of the balance of the loan. With your logic, I wouldn't need to show the appraisal, credit report, etc. Appendix A specifically identifies optional insurance in the 900s. You still won't list it in the comparison chart.
Those fees you listed are settlement charges. I can't see optional credit life as a settlement charge. It's an optional product. The money borrowed is to purchase this product. Thus it's disclosed as part of the initial loan amount on the GFE. As far as listing it in the 900's, if you do that, you're required to list it on the comparison chart per the instructions in Appendix A.
Better guidance is needed on this.
Posted By: Sheldon Hendrix
Re: RESPA changes 1-1-10 - 11/25/09 05:11 PM
Originally Posted By: David Dickinson
Quote:
Credit life is part of the balance of the loan which shows up on the GFE under "Your initial loan amount is ". Like you say, there's no explicit disclosure of it on the GFE. The instructions for the HUD-1 and the recently updated FAQ state that Lines 104 and 105 are for additional amounts owed by the borrower, such as charges that were not listed on the GFE. This seems to fit credit life perfectly. In addition if you list it here instead of the 900 series, it won't show up on the comparison chart on the HUD-1, thus looking strange with a charge in the HUD-1 column for credit life and a blank for the GFE column. Like I said, that's the unofficial take on the issue.
Everything financed is part of the balance of the loan. With your logic, I wouldn't need to show the appraisal, credit report, etc. Appendix A specifically identifies optional insurance in the 900s. You still won't list it in the comparison chart.
So list the entire premium amount in the 900s, and make sure that it is NOT listed on the comparison chart?
Posted By: Sheldon Hendrix
Re: RESPA changes 1-1-10 - 11/25/09 05:19 PM
Hey, I don't know if anybody has noticed but HUD just recently posted some fillable PDFs of the GFE and HUD1 on their RESPA page. Good for training.
http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm
http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/25/09 05:27 PM
That is great info, CR. Thanks!
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 11/25/09 05:34 PM
Originally Posted By: pjs
Originally Posted By: RR joker
I'm so glad THAT got cleared back up...I thought I had missed something somewhere along the way...good GOLLY miss MOLLY!
I love RESPA, I love RESPA, I love RESPA....really, I do.(not)
I love RESPA, I love RESPA, I love RESPA....really, I do.(not)
My problem I can read it and understand it and get it in my head then something else comes along to question my thought process and then I get confused.
Same here!
Posted By: ForceFull1
Re: RESPA changes 1-1-10 - 11/25/09 06:29 PM
Sorry to bring this question back, but I just posted it yesterday and it's already buried under 3 pages of new stuff! God bless HUD and this new RESPA garbage.
I've read up on the earlier discussions on taxes, but am not sure that this scenario has been addressed: if a first loan payment will fall after a tax payment is due, and we plan to collect the tax payment at closing, should the tax payment be disclosed on the GFE? If so, in what section?
I've read up on the earlier discussions on taxes, but am not sure that this scenario has been addressed: if a first loan payment will fall after a tax payment is due, and we plan to collect the tax payment at closing, should the tax payment be disclosed on the GFE? If so, in what section?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/25/09 06:36 PM
There is no reference to taxes on the GFE. Under the summary of your loan section there is a checkbox as to whether or not escrows are required, but nowhere else are taxes mentioned.
Posted By: Sage
Re: RESPA changes 1-1-10 - 11/25/09 06:40 PM
I could not open the GFE- I got an error message. Did anyone have that happen?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/25/09 06:45 PM
So when the borrower walks out with their GFE saying two month escrow (for cushion) and gets wammed the day before closing having to bring in thousands of dollars more to pay the tax bill due they're supposed to remember that their last mortgage holder has that money in escrow and they'll get it back in a few weeks? Oh, and they're not going to rail at the bank about not telling the truth? Tell me again, HUD, how this is better for the borrower.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/25/09 06:51 PM
Agreed Truff...another reason the regs should have been tweaked, not shredded and re written. (Although we run into that issue often ).
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 11/25/09 07:00 PM
Originally Posted By: Sage
I could not open the GFE- I got an error message. Did anyone have that happen?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/25/09 07:08 PM
Originally Posted By: Sage
I could not open the GFE- I got an error message. Did anyone have that happen?
I didn't have that problem.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/25/09 07:29 PM
Took a while but it opened.
Posted By: mbernard
Re: RESPA changes 1-1-10 - 11/25/09 07:30 PM
**Homeowner's insurance**
We are a small institution that just does Re-fi's. No purchases. Mostly 2nds, but the occasional 1st. On the GFE we have to estimate Homeowner's Insurance. We require the consumer to have Homeowner's Insurance by settlement. We don't collect for it, we just want to make sure they have ti before settlement. On the HUD-1A, how do we list homeowner's insurance? Line 903. How are we going to know this information?
Thanks in advance!
We are a small institution that just does Re-fi's. No purchases. Mostly 2nds, but the occasional 1st. On the GFE we have to estimate Homeowner's Insurance. We require the consumer to have Homeowner's Insurance by settlement. We don't collect for it, we just want to make sure they have ti before settlement. On the HUD-1A, how do we list homeowner's insurance? Line 903. How are we going to know this information?
Thanks in advance!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/25/09 07:45 PM
Originally Posted By: misha
Would like to go back to the prequalification discussion - I'm sure there's something I'm not thinking of, but here's my scenario.
Client comes in without an property address, but says he's going to start looking for a house - thinks it will be in the $200,000 range. We give a GFE, do our verifications & provide a prequal letter. He comes back next week - found a house, but it's $250,000. We can do a revised GFE because of changed circumstances.
Let's say he had found a house for $200,000 - why should I worry about the fact that I can't give a new GFE simply because I now have an address? Chances are it's in the same county as originally anticipated, so recording, etc. fees should be similar - what am I missing?
Client comes in without an property address, but says he's going to start looking for a house - thinks it will be in the $200,000 range. We give a GFE, do our verifications & provide a prequal letter. He comes back next week - found a house, but it's $250,000. We can do a revised GFE because of changed circumstances.
Let's say he had found a house for $200,000 - why should I worry about the fact that I can't give a new GFE simply because I now have an address? Chances are it's in the same county as originally anticipated, so recording, etc. fees should be similar - what am I missing?
That would be a changed circumstance. The identification f the house, by itself, is not, but the change in the amount requested would be.
Posted By: tayls
Re: RESPA changes 1-1-10 - 11/25/09 07:53 PM
We crossed this bridge a while back when we had a dispute between our vendor and consultants. We asked HUD and they made it clear:
****
Our questions to HUD:
Block 9 of the new GFE form addresses situations where property taxes are required to be escrowed, in whole or in part. What about cases where the bank is not requiring that they be escrowed? Where, if anywhere, do we insert the tax information on the new GFE?
Our consultants felt that they should be listed in Block 6 "Required services that you can shop for", but our vendor strongly disagrees, stating that the consumer cannot "shop" for real estate taxes - they can only be paid through the local taxing authority.
Response from HUD:
"Thank you for contacting the Office of RESPA. The Good Faith Estimate (GFE) is to disclose all fees and charges to be collected at the time of settlement. Therefore, you would not disclose property tax or escrow that is not to be collected at closing. In answer to your second question, your vendor is correct. You would not disclose property tax in Box 6, Required Services that you can shop for."
****
We were pleased to actually get a straight answer in this mess....
****
Our questions to HUD:
Block 9 of the new GFE form addresses situations where property taxes are required to be escrowed, in whole or in part. What about cases where the bank is not requiring that they be escrowed? Where, if anywhere, do we insert the tax information on the new GFE?
Our consultants felt that they should be listed in Block 6 "Required services that you can shop for", but our vendor strongly disagrees, stating that the consumer cannot "shop" for real estate taxes - they can only be paid through the local taxing authority.
Response from HUD:
"Thank you for contacting the Office of RESPA. The Good Faith Estimate (GFE) is to disclose all fees and charges to be collected at the time of settlement. Therefore, you would not disclose property tax or escrow that is not to be collected at closing. In answer to your second question, your vendor is correct. You would not disclose property tax in Box 6, Required Services that you can shop for."
****
We were pleased to actually get a straight answer in this mess....
Posted By: ForceFull1
Re: RESPA changes 1-1-10 - 11/25/09 07:59 PM
Originally Posted By: tayls
The Good Faith Estimate (GFE) is to disclose all fees and charges to be collected at the time of settlement. Therefore, you would not disclose property tax or escrow that is not to be collected at closing. In answer to your second question, your vendor is correct. You would not disclose property tax in Box 6, Required Services that you can shop for.
Thanks for the assist, Tayls. Not sure that HUD could have made that any less clear. So if we anticipate having to collect a tax payment at closing, we DO need to list it on the GFE? It seems like that is what they are saying, but HUD didn't exactly answer that with a yes/no. And if yes, does it go in block 3?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/25/09 08:02 PM
Originally Posted By: Go Hogs Go
Those fees you listed are settlement charges. I can't see optional credit life as a settlement charge. It's an optional product. The money borrowed is to purchase this product. Thus it's disclosed as part of the initial loan amount on the GFE.
Optional credit insurance IS a settlement service. You can find this in the definition - §3500.2 "Settlement Service" #12.
Quote:
As far as listing it in the 900's, if you do that, you're required to list it on the comparison chart per the instructions in Appendix A.
Not true. Appendix A says to list "each charge included in Blocks 3 and 7. Then it goes on to say "for each charge included in Blocks 4, 5 and 6 . . . I see no where instructing us to include things that weren't on the GFE to be included in the comparison charge.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/25/09 08:13 PM
Originally Posted By: kristin09
Hello,
In the BOL webinar Qand A's you answered the following question:
GFE Block 1 vs. Block 2 : Our Origination Charge - or the credit
or debits that affect this loan.
Example: We charge a 1% loan fee, a doc prep fee and we do our own closings
so we have a closing fee (I am saying all of these go in block 1).
Then in Block 2 we have FNMA / FREDDIE Loan Level Price adjustments and
FNMA $25.00 DU fee and let’s say the buyer wants to pay a fee to buy down the
rate (I am saying we will total these all up and net out what box to check either
positive or negative). LLPA of 1000.00 for cash out + 25.00 DU – 250.00 for a
good credit score + 1% for buy down = a positive so it would be a charge of XX
$$ in box 2.
Answer: We agree with your statements. Reference FAQ #5 in “GFE – Block
2”.
However, when you read the FAQ #5, it is discussing LLPA in the context of a mortgage broker. Therefore, we assumed that a Fannie Mae LLPA is included in the origination charge and you would go with Box 1.
Am I incorrect?
In the BOL webinar Qand A's you answered the following question:
GFE Block 1 vs. Block 2 : Our Origination Charge - or the credit
or debits that affect this loan.
Example: We charge a 1% loan fee, a doc prep fee and we do our own closings
so we have a closing fee (I am saying all of these go in block 1).
Then in Block 2 we have FNMA / FREDDIE Loan Level Price adjustments and
FNMA $25.00 DU fee and let’s say the buyer wants to pay a fee to buy down the
rate (I am saying we will total these all up and net out what box to check either
positive or negative). LLPA of 1000.00 for cash out + 25.00 DU – 250.00 for a
good credit score + 1% for buy down = a positive so it would be a charge of XX
$$ in box 2.
Answer: We agree with your statements. Reference FAQ #5 in “GFE – Block
2”.
However, when you read the FAQ #5, it is discussing LLPA in the context of a mortgage broker. Therefore, we assumed that a Fannie Mae LLPA is included in the origination charge and you would go with Box 1.
Am I incorrect?
If there is a broker involved, all of the fees you listed would be in Block 1 or 2 as indicated in the question and our answer. This is supported by FAQ #5.
If no broker is involved, all of the fees could be listed in Block 1.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/25/09 08:16 PM
Thanks for sharing the HUD answer, tayls. Unfortunately with regard to ForceFull1's question, their response was as clear as mud. Notwithstanding monies escrowed for future tax payments, if the tax bill needs to be paid at closing, where do we put it on the GFE?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 11/25/09 08:20 PM
Before I search back 30+ pages, have we already discussed disclosing the SRP on the HUD? If not, I have a question, if so, I'll start looking!
Posted By: tclowes
Re: RESPA changes 1-1-10 - 11/25/09 08:23 PM
I have some questions about the new GFE.
Question #1-In section 10 it discloses daily interest charges from the loan settlement date until the first day of the next month. Our lenders do not make the customer pay this at settlement. Do we still disclose this??? And this situation leads to the next two questions...
Because the customer does not pay this at settlement, it makes the first months payment higher because of the interest owed. This leads to a temporary negative amortization at the beginning.
Question #2-Does that mean we must mark "yes" in the "summary of your loan" section where it asks, "Even if you make your loan payment on time, can your loan balance rise?"
Question #3-What would we mark on the next question under "Summary of your loan" asking is the monthly amunt owed for principal, interest and any mortgage insurance rise?
Question #1-In section 10 it discloses daily interest charges from the loan settlement date until the first day of the next month. Our lenders do not make the customer pay this at settlement. Do we still disclose this??? And this situation leads to the next two questions...
Because the customer does not pay this at settlement, it makes the first months payment higher because of the interest owed. This leads to a temporary negative amortization at the beginning.
Question #2-Does that mean we must mark "yes" in the "summary of your loan" section where it asks, "Even if you make your loan payment on time, can your loan balance rise?"
Question #3-What would we mark on the next question under "Summary of your loan" asking is the monthly amunt owed for principal, interest and any mortgage insurance rise?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/25/09 08:23 PM
Found this from David a couple of pages back...
Now if someone stumbles across the size of the form post that I swear I just read today, I'd appreciate a link. I thought they had to be legal but my forms company just wrote that Isn't the HUD-1 8.5x14"? Why can't HUD just pick one size and stick with it for everything? Oh, wait...that would make it easy and we all know life was not meant to be easy.
Quote:
Taxes are not listed on the GFE or HUD-1/1A, unless they are delinquent. Then they show up in line 104/105.
Now if someone stumbles across the size of the form post that I swear I just read today, I'd appreciate a link. I thought they had to be legal but my forms company just wrote that
Quote:
The standardized GFE is an 8.5 X 11” document.
Posted By: Frank
Re: RESPA changes 1-1-10 - 11/25/09 08:24 PM
Originally Posted By: David Dickinson
Originally Posted By: Go Hogs Go
Those fees you listed are settlement charges. I can't see optional credit life as a settlement charge. It's an optional product. The money borrowed is to purchase this product. Thus it's disclosed as part of the initial loan amount on the GFE.
Optional credit insurance IS a settlement service. You can find this in the definition - §3500.2 "Settlement Service" #12.
Quote:
As far as listing it in the 900's, if you do that, you're required to list it on the comparison chart per the instructions in Appendix A.
Not true. Appendix A says to list "each charge included in Blocks 3 and 7. Then it goes on to say "for each charge included in Blocks 4, 5 and 6 . . . I see no where instructing us to include things that weren't on the GFE to be included in the comparison charge.
Not trying to be controversial, but the definition given in 3500.2 states ".. but only if such insurance is required by lender as a condition of the loan". Optional credit life is just that-optional to the customer. We try to sell it, but it's never a condition of getting the loan.
As far as Appendix A, when it discusses the 3 tolerance categories, within each of these sections the wording states "The HUD-1/1-A column must include any amounts that are shown on page 2 of the HUD-1 in the column as paid for by the borrower, plus any amounts that are shown as POC by or on behalf of the borrower". So it seems to me if you list credit life in the 900 series, you'll be disclosing it on the comparison chart in the appropriate category. I'm still of the opinion it ought to go in Line 104-105 right now, but I'm remaining open minded since half the things I thought about RESPA disclosure have changed in the last couple of months.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/25/09 08:24 PM
Originally Posted By: Truffle Royale
So when the borrower walks out with their GFE saying two month escrow (for cushion) and gets wammed the day before closing having to bring in thousands of dollars more to pay the tax bill due they're supposed to remember that their last mortgage holder has that money in escrow and they'll get it back in a few weeks? Oh, and they're not going to rail at the bank about not telling the truth? Tell me again, HUD, how this is better for the borrower.
Truf...would you not collect what's due plus the escrow cushion and show the full amount in box 9? Or, would this be in the case the bill is due NOW and it's collected but not escrowed. Or, if you don't escrow, there is no place to put taxes.
IT's kinda crazy like homeowner's insurance. If they refinance and still have 6 months left on their policy, you aren't going to collect anything, but you show a year's estimate? I know we always have done that...but it seems a little silly, right?
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/25/09 08:26 PM
I hope everyone can take a day off and enjoy Thanksgiving and not even think about RESPA.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/25/09 08:29 PM
Originally Posted By: Truffle Royale
So when the borrower walks out with their GFE saying two month escrow (for cushion) and gets wammed the day before closing having to bring in thousands of dollars more to pay the tax bill due they're supposed to remember that their last mortgage holder has that money in escrow and they'll get it back in a few weeks? Oh, and they're not going to rail at the bank about not telling the truth? Tell me again, HUD, how this is better for the borrower.
Sox is right, I just want to add the following:
The Good Faith Estimate:
1. Doesn’t informs the borrower of the P+I+T+I payment
2. Doesn’t explain how much money to bring to closing
3. Does not list ANYTHING as POC.
4. Doesn’t list taxes – except telling them you are escrowing for it.
I think bankers are going to want to provide a piece of paper (in addition to the GFE) entitled "Now that you've received the piece of [censored] called the GFE, here's what you really need to know".
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/25/09 08:31 PM
Seems like Optional Credit life's best fit would be in the 1300 section of the HUD 1.
Then it would be a part of the principal loan on 202, therefore coming out "in the wash" on line 302 and ultimately 303.
Then it would be a part of the principal loan on 202, therefore coming out "in the wash" on line 302 and ultimately 303.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/25/09 08:34 PM
Bills are due in Jan & Aug. State law requires we give the borrower three options to pay. 1)In full in Dec. 2)In full in Jan 3)when due.
Currently we show the taxes on the GFE as poc but they're added in to the total estimate of money needed so the borrower knows what the money is for and that the bill is out there.
Come 2010, we'll show the cushion on the GFE but that's about it because until title is run, we have no clue what option they chose before and 99.9% of the time neither do they. Finding out the taxes must be paid is not a changed circumstance so we can't redisclose and tell them.
I can just imagine the conversation...
LO: 'You need to bring the $1000 we showed on the GFE to the closing tomorrow...and a paid tax receipt.
Borrower: 'Excuse me? I just got my tax bill today and I don't have $3000 laying around at Christmas to pay my bill.'
LO: 'Well, you'll get it back from your current servicer within a month or so after we send in the payoff.'
I'm sure you can figure out the rest of the conversation.
Currently we show the taxes on the GFE as poc but they're added in to the total estimate of money needed so the borrower knows what the money is for and that the bill is out there.
Come 2010, we'll show the cushion on the GFE but that's about it because until title is run, we have no clue what option they chose before and 99.9% of the time neither do they. Finding out the taxes must be paid is not a changed circumstance so we can't redisclose and tell them.
I can just imagine the conversation...
LO: 'You need to bring the $1000 we showed on the GFE to the closing tomorrow...and a paid tax receipt.
Borrower: 'Excuse me? I just got my tax bill today and I don't have $3000 laying around at Christmas to pay my bill.'
LO: 'Well, you'll get it back from your current servicer within a month or so after we send in the payoff.'
I'm sure you can figure out the rest of the conversation.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 11/25/09 08:35 PM
Originally Posted By: David Dickinson
I think bankers are going to want to provide a piece of paper (in addition to the GFE) entitled "Now that you've received the piece of [censored] called the GFE, here's what you really need to know".
I'm going to print it and put it on the wall so I have a when I need it.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/25/09 08:42 PM
Quote:
Not trying to be controversial, but the definition given in 3500.2 states ".. but only if such insurance is required by lender as a condition of the loan". Optional credit life is just that-optional to the customer. We try to sell it, but it's never a condition of getting the loan.
You're right. I didn't do my homework well enough. The Settlement Statement must list EVERYTHING involved in the loan - required or voluntary. Line 904 specifically states ". . . .also used to list amounts paid at settlement for insurance not required by the lender." How is this not clear?
Quote:
As far as Appendix A, when it discusses the 3 tolerance categories, within each of these sections the wording states "The HUD-1/1-A column must include any amounts that are shown on page 2 of the HUD-1 in the column as paid for by the borrower, plus any amounts that are shown as POC by or on behalf of the borrower". So it seems to me if you list credit life in the 900 series, you'll be disclosing it on the comparison chart in the appropriate category. I'm still of the opinion it ought to go in Line 104-105 right now, but I'm remaining open minded since half the things I thought about RESPA disclosure have changed in the last couple of months.
What you are quoting from is the "Charges that cannot increase" instructions. You're taking it out of context. The first sentence of the instructions for the comparison chart (in Appendix A) states "using the exact information and amounts from the GFE . . . " If it wasn't on the GFE, it doesn't get listed in the comparison charts. The specific instructions (broken out for the 3 charts) then tell you exactly what to list in each chart. No where do they mention things not on the GFE.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/25/09 08:52 PM
Originally Posted By: David Dickinson
Originally Posted By: Truffle Royale
So when the borrower walks out with their GFE saying two month escrow (for cushion) and gets wammed the day before closing having to bring in thousands of dollars more to pay the tax bill due they're supposed to remember that their last mortgage holder has that money in escrow and they'll get it back in a few weeks? Oh, and they're not going to rail at the bank about not telling the truth? Tell me again, HUD, how this is better for the borrower.
Sox is right, I just want to add the following:
The Good Faith Estimate:
1. Doesn’t informs the borrower of the P+I+T+I payment
2. Doesn’t explain how much money to bring to closing
3. Does not list ANYTHING as POC.
4. Doesn’t list taxes – except telling them you are escrowing for it.
I think bankers are going to want to provide a piece of paper (in addition to the GFE) entitled "Now that you've received the piece of [censored] called the GFE, here's what you really need to know".
I just left a meeting with my boss which included reviewing a sample GFE. He pretty much said the same thing David. Simply shook his head and asked how this would be better for the consumer.
Posted By: tayls
Re: RESPA changes 1-1-10 - 11/25/09 08:54 PM
Truff and Force: I wasn't specifically responding to Force's issue, more an FYI, but I don't see any other place that looks like it would work in that situation - It's a charge we will "require to be paid", and we will, for lack of any other option, "choose the provider" of the services (the taxing authority). Think we can put it in there and keep a straight face?
(I won't make any comment about what sort of 'services' anybody gets for their tax dollars though - it's too late in the day...)
Would love to hear other opinions.
By the way - I'm with an OCC bank and we recently asked our regulators how they plan to approach RESPA issues in light of HUD's "give 'em a break" statement. We were told that no immediate guidance is in the works.
(I won't make any comment about what sort of 'services' anybody gets for their tax dollars though - it's too late in the day...)
Would love to hear other opinions.
By the way - I'm with an OCC bank and we recently asked our regulators how they plan to approach RESPA issues in light of HUD's "give 'em a break" statement. We were told that no immediate guidance is in the works.
Posted By: Clint,,,,,
Re: RESPA changes 1-1-10 - 11/26/09 12:44 AM
I have a loan officer that has suggested that he will just "estimate" every settlement service on the GFE at an additional $100.00 over what it may cost, and plead ignorance if challenged. That way he will have less of a chance of having an overage that must be refunded after closing.
Is this allowed?
Is this allowed?
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/26/09 01:22 AM
Originally Posted By: Clint,,,,,
I have a loan officer that has suggested that he will just "estimate" every settlement service on the GFE at an additional $100.00 over what it may cost, and plead ignorance if challenged. That way he will have less of a chance of having an overage that must be refunded after closing.
Is this allowed?
Is this allowed?
From David's Q&A from his webinar:
The intent is to provide a meaningful GFE to an applicant so they can shop and compare settlement costs. While there may be instances where you disclose the highest cost, intentionally overstating fees to meet tolerance requirements is not acceptable. If you consistently over disclose fees, we expect examiners to criticize your practice as your GFE is not meaningful. Additionally, this practice would put you at a competitive disadvantage.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/26/09 01:27 AM
Originally Posted By: Just Jay
Before I search back 30+ pages, have we already discussed disclosing the SRP on the HUD? If not, I have a question, if so, I'll start looking!
I think you need to ask your question. A lot has been going on with that SRP charge.
Posted By: Clint,,,,,
Re: RESPA changes 1-1-10 - 11/26/09 01:05 PM
Here's a link to a very good article on YSP vs SRP:
http://www.lenderscomplianceblog.com/2009/08/service-release-premium-versus-yield.html
http://www.lenderscomplianceblog.com/2009/08/service-release-premium-versus-yield.html
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 11/27/09 01:41 PM
Originally Posted By: pjs
I hope everyone can take a day off and enjoy Thanksgiving and not even think about RESPA.
too late for that!
Posted By: RUKiddingMe
Re: RESPA changes 1-1-10 - 11/27/09 02:55 PM
New Question about tolerance cures:
I'm very confused about tolerance cures...in the example on page 33 of the most recently issued HUD FAQ, the HUD indicates on page 2 that the customer paid $800 of a $1000 transfer tax bill (apparently the GFE showed the estimate of $800, and there is zero tolerance). There is also a $200 entry as POC Lender.
Why wouldn't the HUD show $1000 for transfer taxes in the borrower column, with a $200 credit on page 1?
What would be an example of a situation in which the cure is on page 1 of the HUD rather than shown as a 'POC Lender' on the GFE?
I'm very confused about tolerance cures...in the example on page 33 of the most recently issued HUD FAQ, the HUD indicates on page 2 that the customer paid $800 of a $1000 transfer tax bill (apparently the GFE showed the estimate of $800, and there is zero tolerance). There is also a $200 entry as POC Lender.
Why wouldn't the HUD show $1000 for transfer taxes in the borrower column, with a $200 credit on page 1?
What would be an example of a situation in which the cure is on page 1 of the HUD rather than shown as a 'POC Lender' on the GFE?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 11/27/09 05:10 PM
Originally Posted By: Truffle Royale
I'm so po'd at our software company. We're not going to get an update till hopefully 12/18. Then we can start running tests. Are you kidding me???!!! And, once we go live, it's all or nothing. So any loans I've taken an application for in 2009 that haven't closed yet, my system is going to force me to redisclose on the new GFE. Seriously, I'm spitting tacks here.
We were looking at loading up into the test server on Monday the 30th... just got notice this week from our LOS that it will now be the 7th, but still very, very tentative.
Our LOS is the same one Mortgagebot will be using for the forms and such, so I am curious is this will be knocking Mortgagebot's dates back as well.
Posted By: Ninky
Re: RESPA changes 1-1-10 - 11/27/09 05:22 PM
When HUD says we cannot make changes to the GFE form, other than our Logo, does that mean we have to include the circular HUD logo (US department of Housing and Urban Development)on the top of the first page and on the bottom with the page numbers on the second and third pages? We are struggling to recreate some of this stuff. We've got the text and format exactly, but what about these symbols/logos?
Posted By: stella
Re: RESPA changes 1-1-10 - 11/27/09 05:40 PM
These items may have been covered so I am sorry if I am repeating anything but,
1. is there any kind of waiting period (similar to TIL requirements) before closing once we re-issue a revised GFE? ie. does the borrower have to wait 3 days before they can close once we have re-issued a GFE?
2. do we disclose insurance on a refinance on the GFE?
3. do we have to redisclose a GFE on items where there is unlimited tolerance?
4. For purchases the seller picks the title co. We have no idea who it is going to be. Are we still in the 10% tolerance zone-it is not someone we identify so is this unlimited? Do we have to give them a list to shop from even though they aren't really shopping because it is the sellers choice, not the borrowers?
5. We do not require owners title policy, say at closing the borrowers atty reccomends the borrower get an owners title policy, since we picked the title co is that something we would then be required to be within 10% even though we do not require the policy?
Thanks!
1. is there any kind of waiting period (similar to TIL requirements) before closing once we re-issue a revised GFE? ie. does the borrower have to wait 3 days before they can close once we have re-issued a GFE?
2. do we disclose insurance on a refinance on the GFE?
3. do we have to redisclose a GFE on items where there is unlimited tolerance?
4. For purchases the seller picks the title co. We have no idea who it is going to be. Are we still in the 10% tolerance zone-it is not someone we identify so is this unlimited? Do we have to give them a list to shop from even though they aren't really shopping because it is the sellers choice, not the borrowers?
5. We do not require owners title policy, say at closing the borrowers atty reccomends the borrower get an owners title policy, since we picked the title co is that something we would then be required to be within 10% even though we do not require the policy?
Thanks!
Posted By: Charles Everson
Re: RESPA changes 1-1-10 - 11/27/09 05:50 PM
I'm in the process of getting training and procedures together for three banks plus a mortgage sub for the 1/1/2010 RESPA changes - need some help with implementing E-Sign for mortgage loans. Any ideas of where to begin?
Posted By: Still Smiling
Re: RESPA changes 1-1-10 - 11/27/09 06:56 PM
I just put together a program for ESIGN and will be happy to share...send me a PM with your email and I will send it to you.
Posted By: FABCompliance
Re: RESPA changes 1-1-10 - 11/27/09 07:17 PM
Has anyone else noticed that Calyx Point added signature lines onto the third page of the 2010 GFE, I thought this was a big no,no? Has anyone asked Calyx about this?
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 11/27/09 07:32 PM
We use ARTA Lending and they also added signature lines.
Posted By: Bullseye
Re: RESPA changes 1-1-10 - 11/27/09 08:06 PM
Wolters Kluwer has added signature lines to their forms but we just received a bulletin stating they are removing and replacing those forms.
Another question - In regards to the FAQ's under GFE Block 2 #4:
Q: The regulation states that while the borrower’s interest rate is locked, the credit or charge for the interest rate chosen and the adjusted origination charge may not increase from the amount shown on the GFE. On a “no-cost” loan that covers third-party costs where the rate has been locked, the GFE should show a credit for the interest rate chosen, in an amount sufficient to cover the estimated loan originator and third party fees. If the actual third party fees at closing are lower than stated on the GFE, may the loan originator
reduce the amount of the credit to match what is needed to pay the actual third party and loan originator fees?
A: No, the amount of the credit may not be reduced. The loan originator may choose to: 1) have the amount of the credit remain the same as stated on the GFE to cover additional closing costs previously not anticipated to be included in the “no-cost” loan; 2) apply a principal reduction to the principal balance; 3) reduce the interest rate and the credit accordingly; or 4) have the credit remain the same, resulting in cash to the borrower.
We do not lock rates so I am wondering if the same answer would apply for loans with rates that are NOT locked. Any guidance would be appreciated! Thanks!
Another question - In regards to the FAQ's under GFE Block 2 #4:
Q: The regulation states that while the borrower’s interest rate is locked, the credit or charge for the interest rate chosen and the adjusted origination charge may not increase from the amount shown on the GFE. On a “no-cost” loan that covers third-party costs where the rate has been locked, the GFE should show a credit for the interest rate chosen, in an amount sufficient to cover the estimated loan originator and third party fees. If the actual third party fees at closing are lower than stated on the GFE, may the loan originator
reduce the amount of the credit to match what is needed to pay the actual third party and loan originator fees?
A: No, the amount of the credit may not be reduced. The loan originator may choose to: 1) have the amount of the credit remain the same as stated on the GFE to cover additional closing costs previously not anticipated to be included in the “no-cost” loan; 2) apply a principal reduction to the principal balance; 3) reduce the interest rate and the credit accordingly; or 4) have the credit remain the same, resulting in cash to the borrower.
We do not lock rates so I am wondering if the same answer would apply for loans with rates that are NOT locked. Any guidance would be appreciated! Thanks!
Posted By: Fallgirl
Re: RESPA changes 1-1-10 - 11/27/09 09:47 PM
Originally Posted By: David Dickinson
Quote:
I work for a bank that closes mortgage loans in our own name using our own funds with the purpose of then selling those loans to other financial institutions (or Freddie/Fannie). Is that considered table-funding? And if so, are we then considered a mortgage broker under this definition?
"table funding" (see the definition in §3500.2) is when the funds aren't yours. If you use your own funds, you are not table funding and you're not a broker.
So if we use our own money to close the loans, even though we know we are going to sell to a specific institution that underwrote the loan, we are not table funding and would not be considered a mortgage broker? Is that correct?
Posted By: Sheldon Hendrix
Re: RESPA changes 1-1-10 - 11/27/09 10:26 PM
Originally Posted By: David Dickinson
Originally Posted By: Go Hogs Go
Those fees you listed are settlement charges. I can't see optional credit life as a settlement charge. It's an optional product. The money borrowed is to purchase this product. Thus it's disclosed as part of the initial loan amount on the GFE.
Optional credit insurance IS a settlement service. You can find this in the definition - §3500.2 "Settlement Service" #12.
Quote:
As far as listing it in the 900's, if you do that, you're required to list it on the comparison chart per the instructions in Appendix A.
Not true. Appendix A says to list "each charge included in Blocks 3 and 7. Then it goes on to say "for each charge included in Blocks 4, 5 and 6 . . . I see no where instructing us to include things that weren't on the GFE to be included in the comparison charge.
Sorry to beat a dead horse...
So I am assuming that I disclose the full CL premium on line 904. Where/how do I offset this from being in the total settlement charges (Line 1400) since the premium will be financed?
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/28/09 01:08 AM
Originally Posted By: RUKiddingMe
New Question about tolerance cures:
I'm very confused about tolerance cures...in the example on page 33 of the most recently issued HUD FAQ, the HUD indicates on page 2 that the customer paid $800 of a $1000 transfer tax bill (apparently the GFE showed the estimate of $800, and there is zero tolerance). There is also a $200 entry as POC Lender.
Why wouldn't the HUD show $1000 for transfer taxes in the borrower column, with a $200 credit on page 1?
What would be an example of a situation in which the cure is on page 1 of the HUD rather than shown as a 'POC Lender' on the GFE?
I'm very confused about tolerance cures...in the example on page 33 of the most recently issued HUD FAQ, the HUD indicates on page 2 that the customer paid $800 of a $1000 transfer tax bill (apparently the GFE showed the estimate of $800, and there is zero tolerance). There is also a $200 entry as POC Lender.
Why wouldn't the HUD show $1000 for transfer taxes in the borrower column, with a $200 credit on page 1?
What would be an example of a situation in which the cure is on page 1 of the HUD rather than shown as a 'POC Lender' on the GFE?
The zero tolerance section the lender would have to "eat" that's why it shows POC lender for that section.
With the 10% tolerance category the credit would show in the 200 section page 1 of the HUD as borrower credit.
Posted By: pjs
Re: RESPA changes 1-1-10 - 11/28/09 01:36 AM
Originally Posted By: stella
These items may have been covered so I am sorry if I am repeating anything but,
1. is there any kind of waiting period (similar to TIL requirements) before closing once we re-issue a revised GFE? ie. does the borrower have to wait 3 days before they can close once we have re-issued a GFE?
2. do we disclose insurance on a refinance on the GFE?
3. do we have to redisclose a GFE on items where there is unlimited tolerance?
4. For purchases the seller picks the title co. We have no idea who it is going to be. Are we still in the 10% tolerance zone-it is not someone we identify so is this unlimited? Do we have to give them a list to shop from even though they aren't really shopping because it is the sellers choice, not the borrowers?
5. We do not require owners title policy, say at closing the borrowers atty reccomends the borrower get an owners title policy, since we picked the title co is that something we would then be required to be within 10% even though we do not require the policy?
Thanks!
1. is there any kind of waiting period (similar to TIL requirements) before closing once we re-issue a revised GFE? ie. does the borrower have to wait 3 days before they can close once we have re-issued a GFE?
2. do we disclose insurance on a refinance on the GFE?
3. do we have to redisclose a GFE on items where there is unlimited tolerance?
4. For purchases the seller picks the title co. We have no idea who it is going to be. Are we still in the 10% tolerance zone-it is not someone we identify so is this unlimited? Do we have to give them a list to shop from even though they aren't really shopping because it is the sellers choice, not the borrowers?
5. We do not require owners title policy, say at closing the borrowers atty reccomends the borrower get an owners title policy, since we picked the title co is that something we would then be required to be within 10% even though we do not require the policy?
Thanks!
1. No
2. Hazard insurance? yes, then shown as POC on HUD SS
3. No
4.We have that situation in foreclosed property that the borrower is buying- and the seller chooses the title co- David's Q&A from webinar states: It depends. If the bank requires a title company to close the loan, then you are subject to the tolerance limitations. If the bank does not require the use of a title company, then you do not need to be concerned with the tolerance issues.
5.Sounds like you are selecting the service provider so it would be subject to a 10% tolerance increase.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/28/09 02:19 AM
Originally Posted By: stella
1. is there any kind of waiting period (similar to TIL requirements) before closing once we re-issue a revised GFE? ie. does the borrower have to wait 3 days before they can close once we have re-issued a GFE?
2. do we disclose insurance on a refinance on the GFE?
3. do we have to redisclose a GFE on items where there is unlimited tolerance?
4. For purchases the seller picks the title co. We have no idea who it is going to be. Are we still in the 10% tolerance zone-it is not someone we identify so is this unlimited? Do we have to give them a list to shop from even though they aren't really shopping because it is the sellers choice, not the borrowers?
5. We do not require owners title policy, say at closing the borrowers atty reccomends the borrower get an owners title policy, since we picked the title co is that something we would then be required to be within 10% even though we do not require the policy?
2. do we disclose insurance on a refinance on the GFE?
3. do we have to redisclose a GFE on items where there is unlimited tolerance?
4. For purchases the seller picks the title co. We have no idea who it is going to be. Are we still in the 10% tolerance zone-it is not someone we identify so is this unlimited? Do we have to give them a list to shop from even though they aren't really shopping because it is the sellers choice, not the borrowers?
5. We do not require owners title policy, say at closing the borrowers atty reccomends the borrower get an owners title policy, since we picked the title co is that something we would then be required to be within 10% even though we do not require the policy?
1. There is no waiting period once the GFE is delivered.
2. Yes. It is a lender's requirement.
3. If there is a changed circumstance, you can, but it doesn't make much sense to me since it is unlimited tolerance.
4. If the seller PAYS the fee, it isn't listed on the GFE. If the borrower pays the fees, you must pick the provider or provide a list of recommended providers.
5. If you don't require it, it doesn't show up on on the GFE. Since it isn't on the GFE, there is no tolerance if the borrower still chooses to purchase it.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/30/09 01:57 PM
Originally Posted By: Clint,,,,,
Here's a link to a very good article on YSP vs SRP:
http://www.lenderscomplianceblog.com/2009/08/service-release-premium-versus-yield.html
http://www.lenderscomplianceblog.com/2009/08/service-release-premium-versus-yield.html
Thanks for that, Clint...and "my sentiments exactly", btw!
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/30/09 02:09 PM
Originally Posted By: David Dickinson
Originally Posted By: stella
4. For purchases the seller picks the title co. We have no idea who it is going to be. Are we still in the 10% tolerance zone-it is not someone we identify so is this unlimited? Do we have to give them a list to shop from even though they aren't really shopping because it is the sellers choice, not the borrowers?
5. We do not require owners title policy, say at closing the borrowers atty reccomends the borrower get an owners title policy, since we picked the title co is that something we would then be required to be within 10% even though we do not require the policy?
5. We do not require owners title policy, say at closing the borrowers atty reccomends the borrower get an owners title policy, since we picked the title co is that something we would then be required to be within 10% even though we do not require the policy?
4. If the seller PAYS the fee, it isn't listed on the GFE. If the borrower pays the fees, you must pick the provider or provide a list of recommended providers.
5. If you don't require it, it doesn't show up on on the GFE. Since it isn't on the GFE, there is no tolerance if the borrower still chooses to purchase it.
David, how are you justifying these two answers, particularly when it comes to block 5? The Q&A on this block of the GFE seems very clear that no matter what, and no matter who pays for it, you have to disclose it on purchases.
Posted By: Clint,,,,,
Re: RESPA changes 1-1-10 - 11/30/09 03:25 PM
Originally Posted By: Bullseye
Wolters Kluwer has added signature lines to their forms but we just received a bulletin stating they are removing and replacing those forms.
Another question - In regards to the FAQ's under GFE Block 2 #4:
Q: The regulation states that while the borrower’s interest rate is locked, the credit or charge for the interest rate chosen and the adjusted origination charge may not increase from the amount shown on the GFE. On a “no-cost” loan that covers third-party costs where the rate has been locked, the GFE should show a credit for the interest rate chosen, in an amount sufficient to cover the estimated loan originator and third party fees. If the actual third party fees at closing are lower than stated on the GFE, may the loan originator
reduce the amount of the credit to match what is needed to pay the actual third party and loan originator fees?
A: No, the amount of the credit may not be reduced. The loan originator may choose to: 1) have the amount of the credit remain the same as stated on the GFE to cover additional closing costs previously not anticipated to be included in the “no-cost” loan; 2) apply a principal reduction to the principal balance; 3) reduce the interest rate and the credit accordingly; or 4) have the credit remain the same, resulting in cash to the borrower.
We do not lock rates so I am wondering if the same answer would apply for loans with rates that are NOT locked. Any guidance would be appreciated! Thanks!
Another question - In regards to the FAQ's under GFE Block 2 #4:
Q: The regulation states that while the borrower’s interest rate is locked, the credit or charge for the interest rate chosen and the adjusted origination charge may not increase from the amount shown on the GFE. On a “no-cost” loan that covers third-party costs where the rate has been locked, the GFE should show a credit for the interest rate chosen, in an amount sufficient to cover the estimated loan originator and third party fees. If the actual third party fees at closing are lower than stated on the GFE, may the loan originator
reduce the amount of the credit to match what is needed to pay the actual third party and loan originator fees?
A: No, the amount of the credit may not be reduced. The loan originator may choose to: 1) have the amount of the credit remain the same as stated on the GFE to cover additional closing costs previously not anticipated to be included in the “no-cost” loan; 2) apply a principal reduction to the principal balance; 3) reduce the interest rate and the credit accordingly; or 4) have the credit remain the same, resulting in cash to the borrower.
We do not lock rates so I am wondering if the same answer would apply for loans with rates that are NOT locked. Any guidance would be appreciated! Thanks!
I would also appreciate a response to this question, PLEASE.
Posted By: ccman
RESPA - 11/30/09 03:51 PM
Maybe we will get an 11th hour reprieve as with UIGEA. The Q&A's are not enough to get thru the final rules and understand how to properly address the "GFE", which IMHO is no longer an estimate at all. Mortgage lending is too diverse to simply cover with a one size fits all Q&A that can cover the entire range of circumstances that might be involved with a mortgage loan. We desparately need help here going forward. Wonder if HUD is listening? HELP!!
Posted By: TB 12
Re: RESPA - 11/30/09 03:54 PM
Originally Posted By: ccman
Maybe we will get an 11th hour reprieve as with UIGEA. The Q&A's are not enough to get thru the final rules and understand how to properly address the "GFE", which IMHO is no longer an estimate at all. Mortgage lending is too diverse to simply cover with a one size fits all Q&A that can cover the entire range of circumstances that might be involved with a mortgage loan. We desparately need help here going forward. Wonder if HUD is listening? HELP!!
I highly doubt it ccman. Last week I got a copy of a letter from October sent to the powers at be put together by the ABA, MBA, and about 4 other industry groups. It was about 40 pages long and detailed specific issues with the new rules, contradictions, and general information about how the changes would most likely hurt and not help consumers. There was a brief 2 page response from HUD essentially saying too bad, all ahead full.
Posted By: FABCompliance
Re: RESPA changes 1-1-10 - 11/30/09 03:59 PM
Just an update...I contacted Calyx regarding their signature lines on the 2010 GFE, they said prior to 11/19/09 the signature lines were approved by HUD, but that has since changed. They are working on a service pack update that will remove the signature lines from the GFE, but do not have an eta on this release.
Posted By: Bullseye
Re: RESPA changes 1-1-10 - 11/30/09 05:14 PM
Originally Posted By: Clint,,,,,
Originally Posted By: Bullseye
Wolters Kluwer has added signature lines to their forms but we just received a bulletin stating they are removing and replacing those forms.
Another question - In regards to the FAQ's under GFE Block 2 #4:
Q: The regulation states that while the borrower’s interest rate is locked, the credit or charge for the interest rate chosen and the adjusted origination charge may not increase from the amount shown on the GFE. On a “no-cost” loan that covers third-party costs where the rate has been locked, the GFE should show a credit for the interest rate chosen, in an amount sufficient to cover the estimated loan originator and third party fees. If the actual third party fees at closing are lower than stated on the GFE, may the loan originator
reduce the amount of the credit to match what is needed to pay the actual third party and loan originator fees?
A: No, the amount of the credit may not be reduced. The loan originator may choose to: 1) have the amount of the credit remain the same as stated on the GFE to cover additional closing costs previously not anticipated to be included in the “no-cost” loan; 2) apply a principal reduction to the principal balance; 3) reduce the interest rate and the credit accordingly; or 4) have the credit remain the same, resulting in cash to the borrower.
We do not lock rates so I am wondering if the same answer would apply for loans with rates that are NOT locked. Any guidance would be appreciated! Thanks!
Another question - In regards to the FAQ's under GFE Block 2 #4:
Q: The regulation states that while the borrower’s interest rate is locked, the credit or charge for the interest rate chosen and the adjusted origination charge may not increase from the amount shown on the GFE. On a “no-cost” loan that covers third-party costs where the rate has been locked, the GFE should show a credit for the interest rate chosen, in an amount sufficient to cover the estimated loan originator and third party fees. If the actual third party fees at closing are lower than stated on the GFE, may the loan originator
reduce the amount of the credit to match what is needed to pay the actual third party and loan originator fees?
A: No, the amount of the credit may not be reduced. The loan originator may choose to: 1) have the amount of the credit remain the same as stated on the GFE to cover additional closing costs previously not anticipated to be included in the “no-cost” loan; 2) apply a principal reduction to the principal balance; 3) reduce the interest rate and the credit accordingly; or 4) have the credit remain the same, resulting in cash to the borrower.
We do not lock rates so I am wondering if the same answer would apply for loans with rates that are NOT locked. Any guidance would be appreciated! Thanks!
I would also appreciate a response to this question, PLEASE.
I emailed the question to HUD. "Judy" stated that you may not reduce the amount of the credit listed on the GFE even if you do not lock your rates. This FAQ would apply and you would have to follow one of the four options listed.
Posted By: Clint,,,,,
Re: RESPA changes 1-1-10 - 11/30/09 06:50 PM
Originally Posted By: Bullseye
Originally Posted By: Clint,,,,,
Originally Posted By: Bullseye
Wolters Kluwer has added signature lines to their forms but we just received a bulletin stating they are removing and replacing those forms.
Another question - In regards to the FAQ's under GFE Block 2 #4:
Q: The regulation states that while the borrower’s interest rate is locked, the credit or charge for the interest rate chosen and the adjusted origination charge may not increase from the amount shown on the GFE. On a “no-cost” loan that covers third-party costs where the rate has been locked, the GFE should show a credit for the interest rate chosen, in an amount sufficient to cover the estimated loan originator and third party fees. If the actual third party fees at closing are lower than stated on the GFE, may the loan originator
reduce the amount of the credit to match what is needed to pay the actual third party and loan originator fees?
A: No, the amount of the credit may not be reduced. The loan originator may choose to: 1) have the amount of the credit remain the same as stated on the GFE to cover additional closing costs previously not anticipated to be included in the “no-cost” loan; 2) apply a principal reduction to the principal balance; 3) reduce the interest rate and the credit accordingly; or 4) have the credit remain the same, resulting in cash to the borrower.
We do not lock rates so I am wondering if the same answer would apply for loans with rates that are NOT locked. Any guidance would be appreciated! Thanks!
Another question - In regards to the FAQ's under GFE Block 2 #4:
Q: The regulation states that while the borrower’s interest rate is locked, the credit or charge for the interest rate chosen and the adjusted origination charge may not increase from the amount shown on the GFE. On a “no-cost” loan that covers third-party costs where the rate has been locked, the GFE should show a credit for the interest rate chosen, in an amount sufficient to cover the estimated loan originator and third party fees. If the actual third party fees at closing are lower than stated on the GFE, may the loan originator
reduce the amount of the credit to match what is needed to pay the actual third party and loan originator fees?
A: No, the amount of the credit may not be reduced. The loan originator may choose to: 1) have the amount of the credit remain the same as stated on the GFE to cover additional closing costs previously not anticipated to be included in the “no-cost” loan; 2) apply a principal reduction to the principal balance; 3) reduce the interest rate and the credit accordingly; or 4) have the credit remain the same, resulting in cash to the borrower.
We do not lock rates so I am wondering if the same answer would apply for loans with rates that are NOT locked. Any guidance would be appreciated! Thanks!
I would also appreciate a response to this question, PLEASE.
I emailed the question to HUD. "Judy" stated that you may not reduce the amount of the credit listed on the GFE even if you do not lock your rates. This FAQ would apply and you would have to follow one of the four options listed.
Thanks, BullsEye.
I kinda figured that, but one needs to be certain, before one holds a training seminar.
Posted By: Bullseye
Re: RESPA changes 1-1-10 - 11/30/09 07:26 PM
I did too, but wanted to know for sure. That's kind of a big deal for us.
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 11/30/09 07:45 PM
I did a search and didn't really see this specific issue addressed - please direct me to the thread number if perhaps I just didn't set my search right.
I saw the FAQ (#2, pg. 34 on the 11/19/09 FAQ) that states if we use the HUD-1 in a transaction not subject to RESPA that it will NOT result in the loan being subject to RESPA.
So, if we use the new HUD-1 on a non-RESPA loan, how do you explain all the references to the GFE that the customer never received (i.e. land loans)?
Or...what about those instances where a HUD-1 is used for a commercial transaction - we currently use a "commercial HUD-1" form - can we still do that, or will we have to use this HUD-1 that references the GFE, loan terms, etc.?
I saw the FAQ (#2, pg. 34 on the 11/19/09 FAQ) that states if we use the HUD-1 in a transaction not subject to RESPA that it will NOT result in the loan being subject to RESPA.
So, if we use the new HUD-1 on a non-RESPA loan, how do you explain all the references to the GFE that the customer never received (i.e. land loans)?
Or...what about those instances where a HUD-1 is used for a commercial transaction - we currently use a "commercial HUD-1" form - can we still do that, or will we have to use this HUD-1 that references the GFE, loan terms, etc.?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 11/30/09 08:07 PM
I would think that if you wanted to use a simple HUD 1-type form for non-RESPA loans, there would be nothing inherently wrong with using the soon-to-be "old" version.
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 11/30/09 08:11 PM
Originally Posted By: RR joker
I would think that if you wanted to use a simple HUD 1-type form for non-RESPA loans, there would be nothing inherently wrong with using the soon-to-be "old" version.
FWIW, I agree. That is most likely what we will do.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/30/09 08:29 PM
Originally Posted By: RR joker
Originally Posted By: David Dickinson
Originally Posted By: stella
4. For purchases the seller picks the title co. We have no idea who it is going to be. Are we still in the 10% tolerance zone-it is not someone we identify so is this unlimited? Do we have to give them a list to shop from even though they aren't really shopping because it is the sellers choice, not the borrowers?
5. We do not require owners title policy, say at closing the borrowers atty reccomends the borrower get an owners title policy, since we picked the title co is that something we would then be required to be within 10% even though we do not require the policy?
5. We do not require owners title policy, say at closing the borrowers atty reccomends the borrower get an owners title policy, since we picked the title co is that something we would then be required to be within 10% even though we do not require the policy?
4. If the seller PAYS the fee, it isn't listed on the GFE. If the borrower pays the fees, you must pick the provider or provide a list of recommended providers.
5. If you don't require it, it doesn't show up on on the GFE. Since it isn't on the GFE, there is no tolerance if the borrower still chooses to purchase it.
David, how are you justifying these two answers, particularly when it comes to block 5? The Q&A on this block of the GFE seems very clear that no matter what, and no matter who pays for it, you have to disclose it on purchases.
I didn't read this question to be only about Owner's Title Insurance. The question pertained to title companies - they do lots of work besides title insurance. I agree if the bank requires owner's title insurance, it must be listed no matter who pays for it. But if owner's title insurance is not required, it does not need to be listed. Also, if we're talking about other things (closing agent, etc.) performed by the title company and the borrower is not paying for these things, they are not listed on the GFE.
Posted By: bstritecky
Re: RESPA changes 1-1-10 - 11/30/09 09:55 PM
Originally Posted By: Becky S.
Can someone direct me to finding an answer to the following: On construction/perms we may do several inspections throughout the construction phase. Sometimes the inspections are done by bank staff and sometime by an appraisers. We typically charged a fee per inspection - can we just increase our origination fee and eliminate the inspections fee?
Does anyone have any feedback on this one. I would truly appreciate it.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 11/30/09 10:00 PM
Originally Posted By: Becky S.
Originally Posted By: Becky S.
Can someone direct me to finding an answer to the following: On construction/perms we may do several inspections throughout the construction phase. Sometimes the inspections are done by bank staff and sometime by an appraisers. We typically charged a fee per inspection - can we just increase our origination fee and eliminate the inspections fee?
Does anyone have any feedback on this one. I would truly appreciate it.
One source told me that if the fees are going to the lender, they would be included in Box 1-if going to an outside firm, they would go in box 3, as the appraisal fee is. I have not researched that any further though.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 11/30/09 10:07 PM
I agree with Sox. This is the type of thing HUD didn't think about when they designed the new rules. You'll have to make a decision before you prepare the GFE/Settlement Statement and stick with it.
Posted By: SaaL
Re: RESPA changes 1-1-10 - 11/30/09 11:11 PM
I'm getting hung up on "origination charges" on a "no or partial paid cost loan". If I normally charge an origination fee, application fee, etc. but don't charge those on my "no fee" program - must I disclose what the orig "might have been" in block 1 and offset it block 2? I think not. I think the only fees I would show here would be my attorney doc prep fees, etc. - 3rd party fees that I'm paying on behalf of the customer to originate the loan - not my own internal origination costs that I'm "waiving". The question sounds stupid even as I type it but I'm starting to question EVERYTHING!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/01/09 01:27 AM
I don't believe you need to list internal fees you aren't charging.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 12/01/09 02:02 AM
Originally Posted By: Sox in 07
Originally Posted By: Becky S.
Originally Posted By: Becky S.
Can someone direct me to finding an answer to the following: On construction/perms we may do several inspections throughout the construction phase. Sometimes the inspections are done by bank staff and sometime by an appraisers. We typically charged a fee per inspection - can we just increase our origination fee and eliminate the inspections fee?
Does anyone have any feedback on this one. I would truly appreciate it.
One source told me that if the fees are going to the lender, they would be included in Box 1-if going to an outside firm, they would go in box 3, as the appraisal fee is. I have not researched that any further though.
We also charge a per inspection fee based on a 6 draw schedule. We have decided to default our fee to the maximum charge. Then when we get the plans and cost from the builder, we'll decide if it requires the full 6 draws, if not, we'll lower the fee at closing. We figured that would be acceptable since the fee would be decreasing, not increasing.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 12/01/09 02:08 AM
We are planing on curing any errors at closing (actually we hope we don't have any but...). If the lender misquoted the fees on 801 and they should be higher, do we have to show the higher fee and show a POCL on 801 for the diff or just leave the fees as quoted on the GFE. It seems to us that is what we should do since POC to ourselves does not make sense?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/01/09 12:25 PM
jl-I would say since they are internal charges, you can leave as is-no need to poc.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/01/09 01:55 PM
Quote:
Also, if we're talking about other things (closing agent, etc.) performed by the title company and the borrower is not paying for these things, they are not listed on the GFE.
I just want to take this a little bit futher. I questioned HUD on the instance whereby you have a sales contract that states the seller will pay all closing costs. (all I'm trying to do here is not to create misunderstanding, btw)
Their answer, in a nutshell, was the contract was a mute point. If, in your area, it is typical for the borrower to pay, you disclose. If it isn't, you don't, regardless of anything listed on the contract. I agree, that if you don't require it, it shouldn't be listed. I'm having a bit of trouble with the way HUD has interpreted the Owner's title insurance on purchase transactions and have requested a clear answer from HUD on when we don't require it. I will certainly post it when I get it...I just want something documented telling me!
I'll file it in my "weapons" file, because the problem is this...the regulators haven't really figured out the new RESPA yet...we will still have to contend with THEIR interpretations...so I need to be well armed!
Posted By: Bville
Re: RESPA changes 1-1-10 - 12/01/09 02:05 PM
We charge an origination fee. We don't charge the customer for the credit report or the flood determination - those fees are covered by the origination fee.
Am I correct that we have to show a credit for the amount of the credit report and flood determination in Block 2/Line 802 of the GFE and HUD and also list the fees on Lines 805 and 807?
Am I correct that we have to show a credit for the amount of the credit report and flood determination in Block 2/Line 802 of the GFE and HUD and also list the fees on Lines 805 and 807?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/01/09 02:06 PM
Bville-how do you show those charges now?
Posted By: bstritecky
Re: RESPA changes 1-1-10 - 12/01/09 02:09 PM
Originally Posted By: David Dickinson
I agree with Sox. This is the type of thing HUD didn't think about when they designed the new rules. You'll have to make a decision before you prepare the GFE/Settlement Statement and stick with it.
We are thinking that it might be acceptable to increase our origination fee and then if we use an outside appraiser for the inspections we would show a debit and credit to the buyer on the HUD-1. Any thoughts on that???
Posted By: Carter's Mom
Re: RESPA changes 1-1-10 - 12/01/09 02:18 PM
Originally Posted By: pjs
Originally Posted By: RUKiddingMe
New Question about tolerance cures:
I'm very confused about tolerance cures...in the example on page 33 of the most recently issued HUD FAQ, the HUD indicates on page 2 that the customer paid $800 of a $1000 transfer tax bill (apparently the GFE showed the estimate of $800, and there is zero tolerance). There is also a $200 entry as POC Lender.
Why wouldn't the HUD show $1000 for transfer taxes in the borrower column, with a $200 credit on page 1?
What would be an example of a situation in which the cure is on page 1 of the HUD rather than shown as a 'POC Lender' on the GFE?
I'm very confused about tolerance cures...in the example on page 33 of the most recently issued HUD FAQ, the HUD indicates on page 2 that the customer paid $800 of a $1000 transfer tax bill (apparently the GFE showed the estimate of $800, and there is zero tolerance). There is also a $200 entry as POC Lender.
Why wouldn't the HUD show $1000 for transfer taxes in the borrower column, with a $200 credit on page 1?
What would be an example of a situation in which the cure is on page 1 of the HUD rather than shown as a 'POC Lender' on the GFE?
The zero tolerance section the lender would have to "eat" that's why it shows POC lender for that section.
With the 10% tolerance category the credit would show in the 200 section page 1 of the HUD as borrower credit.
So, in this instance, would the comparison of the HUD/GFE on the back page of the hud show you were out of tolerance the $200 or would you correct the back page as well to show you corrected the tolerance?
Posted By: Bville
Re: RESPA changes 1-1-10 - 12/01/09 02:30 PM
Sox, we currently show the credit report and flood determination as POC on the GFE and the HUD.
Posted By: misha
Re: RESPA changes 1-1-10 - 12/01/09 03:13 PM
Sorry if I've missed this somewhere in this thread.
When we cure a tolerance violation - the Q&A says the "settlement agent must provide the revised HUD-1 to the borrower." Do we also have to provide the initial one that we prepared that alerted us to the violation? Or can we just give them the revised version that shows the cure?
When we cure a tolerance violation - the Q&A says the "settlement agent must provide the revised HUD-1 to the borrower." Do we also have to provide the initial one that we prepared that alerted us to the violation? Or can we just give them the revised version that shows the cure?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/01/09 03:16 PM
They need both versions.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/01/09 03:19 PM
Originally Posted By: RR joker
Quote:
Also, if we're talking about other things (closing agent, etc.) performed by the title company and the borrower is not paying for these things, they are not listed on the GFE.
I just want to take this a little bit futher. I questioned HUD on the instance whereby you have a sales contract that states the seller will pay all closing costs. (all I'm trying to do here is not to create misunderstanding, btw)
Their answer, in a nutshell, was the contract was a mute point. If, in your area, it is typical for the borrower to pay, you disclose. If it isn't, you don't, regardless of anything listed on the contract. I agree, that if you don't require it, it shouldn't be listed. I'm having a bit of trouble with the way HUD has interpreted the Owner's title insurance on purchase transactions and have requested a clear answer from HUD on when we don't require it. I will certainly post it when I get it...I just want something documented telling me!
I'll file it in my "weapons" file, because the problem is this...the regulators haven't really figured out the new RESPA yet...we will still have to contend with THEIR interpretations...so I need to be well armed! Well, it's like I thought it was...it just flat has to be done on a purchase, even if you don't require it
From HUD:
Q: The way I read the Q&A’s regarding Block 5 of the GFE (owner’s title insurance) it seems to say this cost should be disclosed for purchase transactions regardless of who is paying it. What about if we do not require it? Is it then marked N/A, or should it be quoted anyway?
A: Yes. You must provide them with an owner’s title insurance quote regardless of who is paying for it.
Q: Craig, thank you for your answer, but are you saying we must provide it, even if WE don’t require it? This is the particular thing I need to know for certain.
Thank you very much for your quick reply~!
A: Yes. That is exactly correct. You have to give the buyer a quote for owner’s coverage.
Posted By: misha
Re: RESPA changes 1-1-10 - 12/01/09 03:27 PM
Originally Posted By: RR joker
They need both versions.
Not sure where I got this, but have something that says "if it's not cured at closing, a new settlement statement must also be provided." That was leading me to believe if we cure at closing, we only need to provide the revised one.
Posted By: MarieR
Re: RESPA changes 1-1-10 - 12/01/09 03:30 PM
On the cure issue - If we know prior to closing that there is an issue and we correct it prior to closing, do we still need to give the borrower both copies? That really doesn't make sense (I know, I know).
Posted By: ahou
Re: RESPA changes 1-1-10 - 12/01/09 04:03 PM
We use both a staff appraiser and 3rd party appraisers. It's not known which will be used at the time the GFE is issued. If we put the appraisal fee in the orig fee and it turns out that a 3rd party appraiser did the appraisal - how do we show it on the HUD?
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 12/01/09 04:08 PM
Originally Posted By: RR joker
Originally Posted By: RR joker
Quote:
Also, if we're talking about other things (closing agent, etc.) performed by the title company and the borrower is not paying for these things, they are not listed on the GFE.
I just want to take this a little bit futher. I questioned HUD on the instance whereby you have a sales contract that states the seller will pay all closing costs. (all I'm trying to do here is not to create misunderstanding, btw)
Their answer, in a nutshell, was the contract was a mute point. If, in your area, it is typical for the borrower to pay, you disclose. If it isn't, you don't, regardless of anything listed on the contract. I agree, that if you don't require it, it shouldn't be listed. I'm having a bit of trouble with the way HUD has interpreted the Owner's title insurance on purchase transactions and have requested a clear answer from HUD on when we don't require it. I will certainly post it when I get it...I just want something documented telling me!
I'll file it in my "weapons" file, because the problem is this...the regulators haven't really figured out the new RESPA yet...we will still have to contend with THEIR interpretations...so I need to be well armed! Well, it's like I thought it was...it just flat has to be done on a purchase, even if you don't require it
From HUD:
Q: The way I read the Q&A’s regarding Block 5 of the GFE (owner’s title insurance) it seems to say this cost should be disclosed for purchase transactions regardless of who is paying it. What about if we do not require it? Is it then marked N/A, or should it be quoted anyway?
A: Yes. You must provide them with an owner’s title insurance quote regardless of who is paying for it.
Q: Craig, thank you for your answer, but are you saying we must provide it, even if WE don’t require it? This is the particular thing I need to know for certain.
Thank you very much for your quick reply~!
A: Yes. That is exactly correct. You have to give the buyer a quote for owner’s coverage.
Thanks, RR Joker! I was going back and forth on this myself. Thanks for posting the clarification.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/01/09 05:27 PM
Quote:
If we put the appraisal fee in the orig fee and it turns out that a 3rd party appraiser did the appraisal - how do we show it on the HUD?
You would have to show to whom it was paid on the HUD statement.
Just keep in mind your origination fee has a zero tolerance therefore you would have to absorb any overages.
Appraisal fees are subject to the 10% tolerance therefore I don't see why anyone would want to lump the fee in their origination fee (0 tolerance) and not show the estimated appraisal fee in block 3.
Posted By: ahou
Re: RESPA changes 1-1-10 - 12/01/09 05:38 PM
If we don't put it in the orig fee and our in-house appraiser does it - we get nothing, because of the zero tol. We would doing the appraisal for free.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/01/09 05:44 PM
My bank is similar to Ahou's in that we have in house appraisers and we sometimes use third-party fee appraisers. We have a standard appraisal fee that we charge customers regardless of who does the appraisal for us. Assume we charge a flat fee of $300 and the outside third party charges the bank $400. On the HUD-1 I have to show that $400 was paid to XYZ Appraisal Firm. Do I then break it out as $300 POC by borrower and $100 POC by lender or do I have to show some type of credit in the 200 series on page 1 of the HUD-1?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/01/09 05:49 PM
ahou, I would not put it in the origination fee. It's a required service. If you do it inhouse and don't charge, you will have over estimated...not a real big deal, IMHO. If you do have to go outside, you have covered yourself by listing it in the required services that you can't shop for section. If you don't do that, you will hurt yourself on tolerance because you will be disclosing a hefty fee that you didn't originally disclose...see?
Posted By: ahou
Re: RESPA changes 1-1-10 - 12/01/09 05:59 PM
We always charge if the in-house appraiser does tne work. He wants to get paid We always charge when a 3rd party does the appraisal. Unless we would know at the time of application who will do the appraisal, I don't see how we can win. I hope mgmt doesn't decide to eliminate the in-house appraiser.
We always charge when a 3rd party does the appraisal. Unless we would know at the time of application who will do the appraisal, I don't see how we can win. I hope mgmt doesn't decide to eliminate the in-house appraiser.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/01/09 05:59 PM
Ahou...why would you not charge for an in-house appraisal?
Posted By: ahou
Re: RESPA changes 1-1-10 - 12/01/09 06:08 PM
Our problem is that we don't know who will do the appraisal at the time the GFE is drafted. Maybe I'm confused. If we put it as a 3rd party required fee and the in-house appraiser does the appraisal - we can't collect the fee because it wasn't included in our orig fee, which has zero tolerance. Correct?
Posted By: Sage
Re: RESPA changes 1-1-10 - 12/01/09 06:42 PM
We have the same issue. We charge for inhouse appraisals. If you do not know if it will be inhouse, should you always include the fee in the origination fees?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/01/09 06:48 PM
I wouldn't consider that a part of the origination fee.
Whether it's in-house or out-house I would include it under required services. I would use the highest estimate between the two and run with it.
ahou..I misunderstood, I thought you were saying that you didn't charge for your in-house, but did for your out-of-house...BTW, we don't charge, so I really thought nothing of it.
Whether it's in-house or out-house
I would include it under required services. I would use the highest estimate between the two and run with it.ahou..I misunderstood, I thought you were saying that you didn't charge for your in-house, but did for your out-of-house...BTW, we don't charge, so I really thought nothing of it.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/01/09 07:25 PM
I agree with rrjoker. I don't think the provider is relevant-just what the fee is for.
Posted By: In Need of Help 101
Re: RESPA changes 1-1-10 - 12/01/09 07:44 PM
What about the Tradeoff Table...do I understand correctly that all we have to do is complete the first column unless you have a no-cost loan and then you would need to complete the other two columns...is this correct?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/01/09 07:46 PM
The first column should be completed (ignore the language right above it) The other two columns are optional.
The most common use of these tables is to show the same loans with points, no points, and with a YSP credit (IMHO)
The most common use of these tables is to show the same loans with points, no points, and with a YSP credit (IMHO)
Posted By: Sage
Re: RESPA changes 1-1-10 - 12/01/09 08:30 PM
But the FAQ's say an in house appraiser fee is an origination fee.See FAQ #8 under HUD-1 800 Series. What am I missing?
Posted By: Bullseye
Re: RESPA changes 1-1-10 - 12/01/09 08:48 PM
What if we find out during underwriting the borrower's employer charges for a verification of employment or the bank charges for a verfication of deposit? This comes up periodically so we would not normally disclose it on our GFE. It wouldn't be a changed circumstance, would it? How would we handle this?
Another question - The disclosure for an extended closing on a construction loan. That is addressed in the FAQ's under the construction loan section. Is that only for construction loans? My initial understanding is that it was for ANY loan closing more than 60 days out. Am I wrong?
I am getting so confused!
Another question - The disclosure for an extended closing on a construction loan. That is addressed in the FAQ's under the construction loan section. Is that only for construction loans? My initial understanding is that it was for ANY loan closing more than 60 days out. Am I wrong?
I am getting so confused!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/01/09 09:03 PM
Originally Posted By: Bullseye
What if we find out during underwriting the borrower's employer charges for a verification of employment or the bank charges for a verfication of deposit? This comes up periodically so we would not normally disclose it on our GFE. It wouldn't be a changed circumstance, would it? How would we handle this?
I don't think this is a changed circumstance. If you didn't disclose on your GFE, it will be a cost that can still go on your HUD-1/1A, but it will count toward your 10% tolerance.
Quote:
Another question - The disclosure for an extended closing on a construction loan. That is addressed in the FAQ's under the construction loan section. Is that only for construction loans? My initial understanding is that it was for ANY loan closing more than 60 days out. Am I wrong?
I don't believe this is for ANY loan. Only "new home purchases where settlement is anticipated to occur more than 60 calendar days from the time a GFE is provided" . IOW, construction loans followed by permanent financing.
Quote:
I am getting so confused!
So am I, but I'm mostly confused trying to follow all of the various questions running in this thread!
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 12/01/09 09:06 PM
It must be for a newly constructed or to-be-constructed home.
From the 11-19-09 FAQs:
2) Q: For a loan originator to issue the separate disclosure to the GFE allowing a loan originator to revise the GFE at any time up to 60 days before settlement, must the new home be constructed specifically for the borrower or will any newly constructed home previously not occupied be eligible?
A: A new home purchase is the purchase of a home either to be constructed or under construction. In a transaction involving a new home purchase, if it is anticipated that settlement will not occur for more than 60 days after the GFE is provided, then a loan originator may provide a separate disclosure to the GFE that clearly states that the loan originator may revise the GFE at any time up to 60 days before settlement.
As an example of a means to determine if the home is under construction: if a use and occupancy permit has been issued for the home prior to the issuance of the GFE, then the home is not considered to be under construction and the transaction would not be a new home purchase for the purposes of 24 CFR § 3500.7(f)(6).
3500.7(f)(6) refers specifically to new home purchases, not any purchase transaction.
From the 11-19-09 FAQs:
2) Q: For a loan originator to issue the separate disclosure to the GFE allowing a loan originator to revise the GFE at any time up to 60 days before settlement, must the new home be constructed specifically for the borrower or will any newly constructed home previously not occupied be eligible?
A: A new home purchase is the purchase of a home either to be constructed or under construction. In a transaction involving a new home purchase, if it is anticipated that settlement will not occur for more than 60 days after the GFE is provided, then a loan originator may provide a separate disclosure to the GFE that clearly states that the loan originator may revise the GFE at any time up to 60 days before settlement.
As an example of a means to determine if the home is under construction: if a use and occupancy permit has been issued for the home prior to the issuance of the GFE, then the home is not considered to be under construction and the transaction would not be a new home purchase for the purposes of 24 CFR § 3500.7(f)(6).
3500.7(f)(6) refers specifically to new home purchases, not any purchase transaction.
Posted By: ahou
Re: RESPA changes 1-1-10 - 12/01/09 09:51 PM
Originally Posted By: Sage
But the FAQ's say an in house appraiser fee is an origination fee.See FAQ #8 under HUD-1 800 Series. What am I missing?
You're not missing anything. In-house appraisals are "origination charges" when performed by the loan originator. That is the problem. If you don't know who will do the appraisal, you won't know where to put the fee on the GFE.
8) Q: If the loan originator performs loan origination services typically performed by a third-party for the appraisal, credit report and/or flood certificate, are the charges for these services listed in Lines 804 thru 807 or are the charges included in the loan originator‘s charge in Line 801 on the HUD-1?
A: Charges for the appraisal, credit report and/or flood certificate performed by the loan originator in a transaction must be included in the loan originator‘s charge listed in Line 801 [origination charge] on the HUD-1.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 12/01/09 11:20 PM
We have the same issue with the Settlement Fee. We do most of our own closings but if we get the title policy and it looks really hairy, we let the title company do the closing. We have decided to list the fee in 801 (that is were it would be if we did the closing) AND on 1102 (just incase the TC ends up doing the closing). The cost will be lower in one area or the other once we know who will be doing the closing. With the new requirement we have no choice but to over state one of these fees because we do not plan on "eating" any fees.
Posted By: Jan94
Re: RESPA changes 1-1-10 - 12/02/09 12:07 AM
The bank has to pay a mortgage release fee to their county but because state law does not permit the bank to charge the fee at origination (and they can't include it at payoff due to a system limitation) it was determined that the bank would just eat the fee. Since the fee is one that is required but will never be charged to the borrower, do we still disclose this as a credit on the GFE and would it in fact be a POC item on the HUD settlement statement? Thank you.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/02/09 01:38 PM
Jan94...we discussed this very same issue. I know of nothing in our state law prohibiting it...but I have a problem with it for this reason...
WE only pay it if WE release it...if someone refi's somewhere else, it's collected and paid with that closing...so, we decided to discontinue the fee. I don't consider it "required". It's something, that if charged down the road, we will just pay it. My problem with the way it actually works is it could be construed as an "unearned fee".
right, wrong, or indifferent, that was our "executive" decision.
WE only pay it if WE release it...if someone refi's somewhere else, it's collected and paid with that closing...so, we decided to discontinue the fee. I don't consider it "required". It's something, that if charged down the road, we will just pay it. My problem with the way it actually works is it could be construed as an "unearned fee".
right, wrong, or indifferent, that was our "executive" decision.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/02/09 01:41 PM
Originally Posted By: ahou
Originally Posted By: Sage
But the FAQ's say an in house appraiser fee is an origination fee.See FAQ #8 under HUD-1 800 Series. What am I missing?
You're not missing anything. In-house appraisals are "origination charges" when performed by the loan originator. That is the problem. If you don't know who will do the appraisal, you won't know where to put the fee on the GFE.
8) Q: If the loan originator performs loan origination services typically performed by a third-party for the appraisal, credit report and/or flood certificate, are the charges for these services listed in Lines 804 thru 807 or are the charges included in the loan originator‘s charge in Line 801 on the HUD-1?
A: Charges for the appraisal, credit report and/or flood certificate performed by the loan originator in a transaction must be included in the loan originator‘s charge listed in Line 801 [origination charge] on the HUD-1.
That does cause a prediciment, doesn't it! I guess I didn't pay a whole lot of attention to it because we don't charge for in-house evals. (We don't do full blown appraisals in-house)...sorry for my bad call!
You could possibly show it both places (I know, that's overstating, but dang!) and then explain it to the borrower?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/02/09 01:43 PM
Quote:
So am I, but I'm mostly confused trying to follow all of the various questions running in this thread!
I am SO GLAD to see I'm not alone!!!!
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/02/09 01:44 PM
My bad as well-same reason as RR...another unintended consequence of the change-not knowing up front who will provide a service, so need to double dip....
WHATS WRONG WITH THE CURRENT GFE???? Stoopid HUD. (sorry for the tantrum)
WHATS WRONG WITH THE CURRENT GFE????
Stoopid HUD. (sorry for the tantrum)
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 12/02/09 01:45 PM
I think this thread has about run it's course. There are so many question interspersed, it is hard to follow one issue from beginning to end and some questions just get lost in the shuffle.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/02/09 01:50 PM
I still find this single thread good. Because there still remain so many questions, I think it might be harder to try and single them out before they get lost in "history".
It also makes me stay "fresh" on this topic, especially when I see something that does not appear to be right. Probably most of my direct questions to HUD have been a result of that very thing.
It also makes me stay "fresh" on this topic, especially when I see something that does not appear to be right. Probably most of my direct questions to HUD have been a result of that very thing.
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 12/02/09 02:08 PM
Agree with RLCarey this thread is too long and hard to follow. I sugget BOL consider breaking it down into smaller segments.
This could be broken up into something like:
1) Page 1 GFE
2) GFE Page 2 Section A
3) GFE Page 2 Lines 3,4, 5
4) GFE Page 2 Lines 6-11
5) GFE Page 3
6) 2010 RESPA Other
Just one person's humble opinion.
BOL provides a great service and we are all indebted for the opportunity to learn and excahnge ideas on this board.
Regards,
This could be broken up into something like:
1) Page 1 GFE
2) GFE Page 2 Section A
3) GFE Page 2 Lines 3,4, 5
4) GFE Page 2 Lines 6-11
5) GFE Page 3
6) 2010 RESPA Other
Just one person's humble opinion.
BOL provides a great service and we are all indebted for the opportunity to learn and excahnge ideas on this board.
Regards,
Posted By: tcredle
Re: RESPA changes 1-1-10 - 12/02/09 03:10 PM
As soon as I think I understand, I read more and become less and less confident.
If we do not know who is paying for the survey or pest we can list on the good faith and they will either be showed on the HUD as a buyers cost or a credit to the borrower depending on who is paying, correct?
Will it be okay to list ALL fees pertaining to the loan if we do not know who will be paying. We will not have a contract at that time from the real estate agent?
All the title companies have different closing fees and charges. Yesterday I had one quote me $150.00 to close a loan and another quote me $350.00 to close the same loan. How are we going to know what charges unless we know at the GFE time who will be closing the loan? I think I read in this thread that we cannot produce our required list until after the GFE when the customer proceeds with the loan. Some title companies have scann, copy, and junk fees. How are we to know if we do not know where they will be closing? What is every one else doing?
How am I going to know if there will be HOA dues if I do not have a contract telling me this? I just do not now how to determine what the fees will be.
If we do not know who is paying for the survey or pest we can list on the good faith and they will either be showed on the HUD as a buyers cost or a credit to the borrower depending on who is paying, correct?
Will it be okay to list ALL fees pertaining to the loan if we do not know who will be paying. We will not have a contract at that time from the real estate agent?
All the title companies have different closing fees and charges. Yesterday I had one quote me $150.00 to close a loan and another quote me $350.00 to close the same loan. How are we going to know what charges unless we know at the GFE time who will be closing the loan? I think I read in this thread that we cannot produce our required list until after the GFE when the customer proceeds with the loan. Some title companies have scann, copy, and junk fees. How are we to know if we do not know where they will be closing? What is every one else doing?
How am I going to know if there will be HOA dues if I do not have a contract telling me this? I just do not now how to determine what the fees will be.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/02/09 03:14 PM
If you do something like that...I have a feeling it needs to be a separate forum!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/02/09 03:29 PM
Originally Posted By: tcredle
If we do not know who is paying for the survey or pest we can list on the good faith and they will either be showed on the HUD as a buyers cost or a credit to the borrower depending on who is paying, correct?
Correct.
Quote:
Will it be okay to list ALL fees pertaining to the loan if we do not know who will be paying. We will not have a contract at that time from the real estate agent?
Yes.
Quote:
All the title companies have different closing fees and charges. Yesterday I had one quote me $150.00 to close a loan and another quote me $350.00 to close the same loan. How are we going to know what charges unless we know at the GFE time who will be closing the loan?
I would disclose the highest fee possible if you don't know at the time of the GFE.
Quote:
I think I read in this thread that we cannot produce our required list until after the GFE when the customer proceeds with the loan. Some title companies have scann, copy, and junk fees. How are we to know if we do not know where they will be closing? What is every one else doing?
You provide the "recommended list" AT the time you provide the GFE.
Quote:
How am I going to know if there will be HOA dues if I do not have a contract telling me this? I just do not now how to determine what the fees will be.
HOA dues are not something you require so they are not listed on the GFE.
Posted By: tcredle
Re: RESPA changes 1-1-10 - 12/02/09 03:34 PM
David,
We do require insurance which is paid through the HOA, so we still do not need to show them? Sometimes the dues are collected at closing if they are due. Sometimes they are split between the buyer and the seller.
We do require insurance which is paid through the HOA, so we still do not need to show them? Sometimes the dues are collected at closing if they are due. Sometimes they are split between the buyer and the seller.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/02/09 03:37 PM
Upon request, I broke the new RESPA out into individual threads according to application dates. This thread has gotten as cumbersome as it's topic. But you only have to search one thread. Splitting it up would make it harder to follow each offshoot so I'm not going to facilitate it. Besides, there's only three weeks left. Let's just hang in there with this one.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/02/09 03:38 PM
If the insurance is paid through the HOA, then I guess you'll have to disclose it - if you know it. If you don't know this, I think this would qualify as a changed circumstance.
Posted By: Sage
Re: RESPA changes 1-1-10 - 12/02/09 03:43 PM
David,
Do you agree that we do have to give a quote on a purchase for Owners' Title insurance even though we do not require it?
Do you agree that we do have to give a quote on a purchase for Owners' Title insurance even though we do not require it?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/02/09 03:43 PM
What if you never know it? HOA dues cover more than just the insurance. Besides the insurance premium is usually prorated by number and size of units IF it's done at all.
We don't normally show dues or an amount for the blanket policy on our HUD. But it is a condition of the loan to have a copy of the blanket policy in file. Am I going to have to reflect that blanket as POC on my HUD or GFE in 2010?
We don't normally show dues or an amount for the blanket policy on our HUD. But it is a condition of the loan to have a copy of the blanket policy in file. Am I going to have to reflect that blanket as POC on my HUD or GFE in 2010?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/02/09 03:45 PM
Originally Posted By: Sage
David,
Do you agree that we do have to give a quote on a purchase for Owners' Title insurance even though we do not require it?
Do you agree that we do have to give a quote on a purchase for Owners' Title insurance even though we do not require it?
Yes.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/02/09 03:47 PM
Originally Posted By: Truffle Royale
What if you never know it? HOA dues cover more than just the insurance. Besides the insurance premium is usually prorated by number and size of units IF it's done at all.
We don't normally show dues or an amount for the blanket policy on our HUD. But it is a condition of the loan to have a copy of the blanket policy in file. Am I going to have to reflect that blanket as POC on my HUD or GFE in 2010?
We don't normally show dues or an amount for the blanket policy on our HUD. But it is a condition of the loan to have a copy of the blanket policy in file. Am I going to have to reflect that blanket as POC on my HUD or GFE in 2010?
You never list "POC" on the new GFE If you require it, it is listed on the GFE and HUD-1/1A. It would be listed as POC on the Settlement Statement.
Posted By: tcredle
Re: RESPA changes 1-1-10 - 12/02/09 03:55 PM
I agree the HOA cover more than just the insurance, but HOA dues are sometimes due at closing and are shown on the HUD. Where are you going to show them on the good faith if not under #11?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/02/09 03:57 PM
I apologize. I'm still confused, David. If I NEVER have an amount, how can I put it on the GFE?
Proof of insurance will be on my confirmation of commitment letter. The HOA will provide us with a copy of the insurance with our unit # on it. In this instance, do I just not include insurance on the GFE?
Proof of insurance will be on my confirmation of commitment letter. The HOA will provide us with a copy of the insurance with our unit # on it. In this instance, do I just not include insurance on the GFE?
Posted By: tcredle
Re: RESPA changes 1-1-10 - 12/02/09 04:01 PM
We never had an amount either for the insurance, but we did how on HUD that we had insurance for a 1 year term POC by the association. I don't know if we are going to be able to do this anymore.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/02/09 04:11 PM
I have HOA dues, but they don't pay my insurance.
Insurance is unlimited tolerance, so I'm not sure what the big deal is.
Insurance is unlimited tolerance, so I'm not sure what the big deal is.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/02/09 04:16 PM
Originally Posted By: tcredle
I agree the HOA cover more than just the insurance, but HOA dues are sometimes due at closing and are shown on the HUD. Where are you going to show them on the good faith if not under #11?
True, but there are also prorations for any number of things-oil in the tank, etc, which have no bearing on the loan. We don't currently put any amounts due for HOA fees on the GFE-we include the monthly amount in the PITI section, but not a prorated amount.
And David makes a great point-put them on line 11 where there is no cap on the tolerance amount.
Posted By: tcredle
Re: RESPA changes 1-1-10 - 12/02/09 04:42 PM
If HOA dues, [censored] dues, Condo Assc. dues, or property taxes are on the HUD and split between the buyer and seller, is it your understanding that these charges do not need to go on the Good Faith Estimate?
If they need to go on the Good Faith, where would you but them?
If they need to go on the Good Faith, where would you but them?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/02/09 04:53 PM
Originally Posted By: tcredle
If HOA dues, [censored] dues, Condo Assc. dues, or property taxes are on the HUD and split between the buyer and seller, is it your understanding that these charges do not need to go on the Good Faith Estimate?
If they need to go on the Good Faith, where would you but them?
If they need to go on the Good Faith, where would you but them?
On the good faith, the only reference to taxes is the amount to be escrowed, if any. Otherwise, the other fees you noted are not lender required fees, so they would not be disclosed on the GFE, IMHO
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/02/09 04:53 PM
Any fee the borrower might pay for AND that you require must be listed on the GFE.
Taxes are definitely not listed on the GFE. I don't think HOA and Condo Assoc. dues go on the GFE - as I stated in an earlier post. If this pays for the hazard insurance, then I guess it will need to be listed. Most likely Block 11.
(I'm not sure what you typed that was censored)
Taxes are definitely not listed on the GFE. I don't think HOA and Condo Assoc. dues go on the GFE - as I stated in an earlier post. If this pays for the hazard insurance, then I guess it will need to be listed. Most likely Block 11.
(I'm not sure what you typed that was censored)
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 12/02/09 05:01 PM
I have a question regarding lists of providers. Do we have to give the client a list for title companies. There are only about three or four in our area. We are required to give them a list for services they can shop for correct? Our bank doesn't require any services that they can shop for example pest. We don't require pest inspections or survey's. Sometime, the borrower may want to have this done but is done at their option, not required. This would not have to be disclosed on the GFE correct?
Our state does title opinions, so they do neeed an attorney to read the title opinion. My understanding is that fee will go in box 4 for title services and we must give a list of attorney's.
The more I read, the more confused I become
Our state does title opinions, so they do neeed an attorney to read the title opinion. My understanding is that fee will go in box 4 for title services and we must give a list of attorney's.
The more I read, the more confused I become
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/02/09 05:33 PM
If you list a fee on the GFE and allow the borrower to shop for the provider, you MUST provide a list of providers.
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 12/02/09 05:53 PM
Lock Extension Fee - always in Block 1?
If a lock agreement expires, we charge a lock extension fee. If it was the bank's fault, the bank eats the fee, but if it's the customer's fault, we require the customer to pay it.
1) Is this a changed circumstance? I'm thinking yes because you would not know at the time you initially issued the GFE that the process would extend beyond the lock period, but I'm probably wrong.
2) Does this fee go in block 1? I believe it does as it doesn't seem appropriate to put it any where else. Then, if the bank is the one paying the fee, I guess you would simply credit it back on the front page of the HUD?
Thanks in advance for setting me straight.
If a lock agreement expires, we charge a lock extension fee. If it was the bank's fault, the bank eats the fee, but if it's the customer's fault, we require the customer to pay it.
1) Is this a changed circumstance? I'm thinking yes because you would not know at the time you initially issued the GFE that the process would extend beyond the lock period, but I'm probably wrong.
2) Does this fee go in block 1? I believe it does as it doesn't seem appropriate to put it any where else. Then, if the bank is the one paying the fee, I guess you would simply credit it back on the front page of the HUD?
Thanks in advance for setting me straight.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/02/09 05:54 PM
Notice David's "and" above. You could elect to not allow them to shop, if you can get away with that.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/02/09 05:58 PM
Originally Posted By: FlamingoGal
Lock Extension Fee - always in Block 1?
If a lock agreement expires, we charge a lock extension fee. If it was the bank's fault, the bank eats the fee, but if it's the customer's fault, we require the customer to pay it.
1) Is this a changed circumstance? I'm thinking yes because you would not know at the time you initially issued the GFE that the process would extend beyond the lock period, but I'm probably wrong.
2) Does this fee go in block 1? I believe it does as it doesn't seem appropriate to put it any where else. Then, if the bank is the one paying the fee, I guess you would simply credit it back on the front page of the HUD?
Thanks in advance for setting me straight.
If a lock agreement expires, we charge a lock extension fee. If it was the bank's fault, the bank eats the fee, but if it's the customer's fault, we require the customer to pay it.
1) Is this a changed circumstance? I'm thinking yes because you would not know at the time you initially issued the GFE that the process would extend beyond the lock period, but I'm probably wrong.
2) Does this fee go in block 1? I believe it does as it doesn't seem appropriate to put it any where else. Then, if the bank is the one paying the fee, I guess you would simply credit it back on the front page of the HUD?
Thanks in advance for setting me straight.
FWIW, i agree with you.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/02/09 06:06 PM
I would go along with all said regarding the lock fee as well.
Posted By: Book Nerd
Re: RESPA changes 1-1-10 - 12/02/09 06:52 PM
I'm trying to figure out how to complete the new GFE for our "no cost" home equity loans. We pay all of the closing costs on these, which includes the flood certification, credit report, attorney fee, recording fee and appraisal fee. The flood certification, credit report, attorney fee and appraisal fee are paid to a third party. We don't charge any origination fees and no points.
Are we to list the amounts of the settlement fees that we are paying in boxes 3-11 and put a negative amount somewhere in box 1 or 2, or are we supposed to give them a GFE that has zeros instead of what we will be paying for the customer?
Any advice is greatly appreciated!
Are we to list the amounts of the settlement fees that we are paying in boxes 3-11 and put a negative amount somewhere in box 1 or 2, or are we supposed to give them a GFE that has zeros instead of what we will be paying for the customer?
Any advice is greatly appreciated!
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/02/09 06:58 PM
We don't do home equity loans, but we do a fair amount of no cost loans-lender paid. We will be showing the standard fees in the appropriate boxes, but the amount of credit will be shown in Box 2. The result will be a negative number since the credit will be covering fees over and above what is in box 1.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/02/09 06:59 PM
From the Q&A:
Q: How does a loan originator show a ―no cost‖ loan on the GFE?
A: Where a ―no cost‖ loan encompasses the loan origination charge and some or all third party fees, a credit should be listed in Block 2 of the GFE to offset all fees encompassed in the ―no cost‖ loan resulting in a negative number in Block A to cover the intended third party fees, listed in Blocks 3 thru 11 as appropriate.
So, you will list your credit in Block 2 for items you are paying in 3-11. Caveat...if you over estimate this credit...you will still be bound to it. The Q&A goes into more detail on that situation somewhere...maybe in the HUD section. It also could be in this thread as a direct question to HUD with an answer from a poster.
Q: How does a loan originator show a ―no cost‖ loan on the GFE?
A: Where a ―no cost‖ loan encompasses the loan origination charge and some or all third party fees, a credit should be listed in Block 2 of the GFE to offset all fees encompassed in the ―no cost‖ loan resulting in a negative number in Block A to cover the intended third party fees, listed in Blocks 3 thru 11 as appropriate.
So, you will list your credit in Block 2 for items you are paying in 3-11. Caveat...if you over estimate this credit...you will still be bound to it. The Q&A goes into more detail on that situation somewhere...maybe in the HUD section. It also could be in this thread as a direct question to HUD with an answer from a poster.
Posted By: Bank Compliance
Re: RESPA changes 1-1-10 - 12/02/09 07:36 PM
Looking for advice...
On a Second REM where hazard insurance and taxes are all ready current- do we have to have them POC on the GFE and/or HUD???
On a Second REM where hazard insurance and taxes are all ready current- do we have to have them POC on the GFE and/or HUD???
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/02/09 07:39 PM
You no longer have to disclose taxes. YOu will show the estimate for the insurance, just like always. You will not be held to any tolerance on that figure, however.
If the customer has already paid it, it should be pretty understandable that they won't really have that cost at closing, just like before.
If the customer has already paid it, it should be pretty understandable that they won't really have that cost at closing, just like before.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/02/09 07:42 PM
There is no provision to use POC on the new GFE. It can only be used on the new HUD-1 and HUD-1A.
See this prior discussion regarding homeowner's insurance.
See this prior discussion regarding homeowner's insurance.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/02/09 07:53 PM
Thanks reads, I totally ignored the POC part of that question! It probably needed to be laid out in the answer! LOL!
Posted By: ahou
Re: RESPA changes 1-1-10 - 12/02/09 08:04 PM
[So, you will list your credit in Block 2 for items you are paying in 3-11. Caveat...if you over estimate this credit...you will still be bound to it. The Q&A goes into more detail on that situation somewhere...maybe in the HUD section. It also could be in this thread as a direct question to HUD with an answer from a poster.]
It's question 4 under GFE - Blk 2, at the bottom of pg 23 of HUD Q & A.
It's question 4 under GFE - Blk 2, at the bottom of pg 23 of HUD Q & A.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/02/09 08:07 PM
Has anyone come up with an "Intent" letter they might be willing to share? I am having a hard time coming up with something that gets the point across without getting too wordy.
Posted By: TINKerBell
Re: RESPA changes 1-1-10 - 12/02/09 08:16 PM
Has anyone prepared a 'cheat sheet' with fees that have zero tolerance and fees that fall in the 10% tolerance?
Posted By: Melissa Brown
Re: RESPA changes 1-1-10 - 12/02/09 08:18 PM
It doesn't really matter as insurance is not one of the items that is covered under a tolerance on the HUD.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/02/09 08:22 PM
Tinker Bell, if you will look at the boxes at the top of page 3 of the GFE, that sums it up for you.
Posted By: swiggles
Re: RESPA changes 1-1-10 - 12/02/09 10:38 PM
Originally Posted By: pjs
Thanks David for the Q&A from your webinar!
How do I get this? I attended the webinar....haven't received anything.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/02/09 10:53 PM
I know that Reg. X addresses permissible alterations to the HUD-1 and HUD-1A forms. As far as the new GFE is concerned, I think the only changes you can make is to add additional lines to blocks 3, 6, and 11 on page 2. This is discussed in question 27 on page 9 of the 11/19 FAQs.
The non-fillable version of the GFE on HUD's website has gray shading in certain sections and some items have black shaded background with text in white. Our loan origination software for our consumer loan (home equity loan) system does not produce a GFE that exactly matches this. They did not include the gray shading. We cannot print the dark black background with white lettering. They are telling us to change the background from dark black to gray and use black lettering. They told us to shade the other areas that need to be gray with a slightly different shade of gray. Has anyone had this issue with their vendor? We are being told that they cannot change it due to a software issue. Would this form be in violation of Regulation X?
The non-fillable version of the GFE on HUD's website has gray shading in certain sections and some items have black shaded background with text in white. Our loan origination software for our consumer loan (home equity loan) system does not produce a GFE that exactly matches this. They did not include the gray shading. We cannot print the dark black background with white lettering. They are telling us to change the background from dark black to gray and use black lettering. They told us to shade the other areas that need to be gray with a slightly different shade of gray. Has anyone had this issue with their vendor? We are being told that they cannot change it due to a software issue. Would this form be in violation of Regulation X?
Posted By: Cowboys Fan
Re: RESPA changes 1-1-10 - 12/02/09 10:54 PM
Q and A Use the same sign on that you used for the Webinar and the Q and A is at the top.
Posted By: misha
Re: RESPA changes 1-1-10 - 12/02/09 11:22 PM
What do we do in the event of our investor requiring us to do a "field review" - they have questions about the appraisal and/or the conclusions reached in it? These can cost up to $200. It isn't anticipated, so it's not included in our GFE Appraisal estimate. Should we just expect to eat this if it puts us outside the 10% tolerance?
Posted By: Will B
Re: RESPA changes 1-1-10 - 12/03/09 03:35 AM
We require a structural inspection on FHA manufactured home loans, but we'll accept one that the customer already has if it was conducted within the last 60 days. In those cases are we still required to list the inspection on the GFE? If so, will we need to give a provider list for a structural inspection? While it's a service that we require it's not a cost the customer incurs for this loan since they already had it before applying.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 12/03/09 12:32 PM
If you require the structural inspection, it should go on the GFE. How are you going to know that the applicant has one that is acceptable since you can't begin gathering documentation prior to issuing the GFE?
Posted By: Sage
Re: RESPA changes 1-1-10 - 12/03/09 01:57 PM
Why do you do a GFE on a HELOC? I did not think that was required.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/03/09 02:22 PM
RESPA doesn't apply to HELOC's. I scrolled up and re-read a bunch of posts. Who is referring to a HELOC Sage?
Posted By: Sage
Re: RESPA changes 1-1-10 - 12/03/09 02:53 PM
It was "Laffy Taffy" yesterday at 1:52
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/03/09 02:56 PM
I am sure this has been asked, so I apologize in advance. Regarding change of circumstances, many times loan amounts are changed at the table (or right before closing) either up or down depending on the situation. Under the new rules if this request comes in, I assume we would need to do the following:
1) get customers request to change loan amount in writing;
2) complete a new GFE with relevant changes and get to the borrower.
If this (or any other change of circumstance) happens at the table, can we issue the revised GFE and at the same time send corrected closing docs to the attorney? Is it that simple?
1) get customers request to change loan amount in writing;
2) complete a new GFE with relevant changes and get to the borrower.
If this (or any other change of circumstance) happens at the table, can we issue the revised GFE and at the same time send corrected closing docs to the attorney? Is it that simple?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/03/09 03:00 PM
If you have a changed circumstance at the closing table, you could simply close the loan - if it won't throw you out of tolerance. If it will put you out of tolerance, issue a revised GFE and close the loan. There's no waiting time between the GFE and the closing (if the GFE is delivered in person).
Posted By: Book Nerd
Re: RESPA changes 1-1-10 - 12/03/09 03:16 PM
Originally Posted By: David Dickinson
RESPA doesn't apply to HELOC's. I scrolled up and re-read a bunch of posts. Who is referring to a HELOC Sage?
Originally Posted By: Sage
It was "Laffy Taffy" yesterday at 1:52
We don't provide GFEs on Heloc's. We provide them on our home equity loans which are closed-end.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/03/09 03:27 PM
Thanks David.
Posted By: river girl
Re: RESPA changes 1-1-10 - 12/03/09 07:07 PM
I apologize if this is listed somewhere. I searched but....
Where do we include FNMA's adverse market fee?
If it is in the origination charge, we won't know the fee at time of GFE so I'm confused.
Where do we include FNMA's adverse market fee?
If it is in the origination charge, we won't know the fee at time of GFE so I'm confused.
Posted By: In Need of Help 101
Re: RESPA changes 1-1-10 - 12/03/09 07:13 PM
What was the final decision on credit life premiums? Do we show it on the GFE or not?
Having training in a little while and wanted clarification before I go in...say a prayer for me!!!
Having training in a little while and wanted clarification before I go in...say a prayer for me!!!
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 12/03/09 07:24 PM
I attended a seminar yesterday where the speaker had me thrown for a <new> loop.
He says that if a changed circumstance results in my being within the 10% tolerance, I may NOT re-issue a GFE. If a subsequent changed circumstance (assumably more than 3 days after the initial changed circumstance) puts me over the 10%, I can only re-issue the GFE but only to the extent that the second changed circumstance put me over the 10%.
Has anyone else heard this?
He says that if a changed circumstance results in my being within the 10% tolerance, I may NOT re-issue a GFE. If a subsequent changed circumstance (assumably more than 3 days after the initial changed circumstance) puts me over the 10%, I can only re-issue the GFE but only to the extent that the second changed circumstance put me over the 10%.
Has anyone else heard this?
Posted By: Bville
Re: RESPA changes 1-1-10 - 12/03/09 07:25 PM
I've read (here I think) that:
1) When the rate is locked you need to issue a revised GFE.
2) When you have a changed circumstance that requires you to add an escrow to the loan you issue a revised GFE.
Is it really a requirement to issue the revised GFE if none of the costs with a 0 or 10% tolerance change? Can you direct me to where the FAQ or regulation addresses this?
I'm trying to anticipate questions I'll be receiving in training and it makes me more confused.
1) When the rate is locked you need to issue a revised GFE.
2) When you have a changed circumstance that requires you to add an escrow to the loan you issue a revised GFE.
Is it really a requirement to issue the revised GFE if none of the costs with a 0 or 10% tolerance change? Can you direct me to where the FAQ or regulation addresses this?
I'm trying to anticipate questions I'll be receiving in training and it makes me more confused.
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 12/03/09 07:42 PM
Originally Posted By: Bville
I'm trying to anticipate questions I'll be receiving in training and it makes me more confused.
I think you and me both!! I don't think it's a requirement to re-issue one but if there's a change that is large enough (but less than 10%) I still want to be able to re-issue a GFE - especially, if I'm not able to do so at all once the 3 days elapse
Posted By: Carolina Blue
Re: RESPA changes 1-1-10 - 12/03/09 08:16 PM
Technically, you are not required to re-issue a GFE at all. If anything puts you out of tolerance you can pay the difference and correct it by a credit to the borrower on the HUD.
Now with that said I think my plan is to re-issue a GFE anytime a changed circumstance increases my fees by the lessor of $25 or the tolerance limit.
Now with that said I think my plan is to re-issue a GFE anytime a changed circumstance increases my fees by the lessor of $25 or the tolerance limit.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/03/09 08:16 PM
Originally Posted By: respa queen
I attended a seminar yesterday where the speaker had me thrown for a <new> loop.
He says that if a changed circumstance results in my being within the 10% tolerance, I may NOT re-issue a GFE. If a subsequent changed circumstance (assumably more than 3 days after the initial changed circumstance) puts me over the 10%, I can only re-issue the GFE but only to the extent that the second changed circumstance put me over the 10%.
Has anyone else heard this?
He says that if a changed circumstance results in my being within the 10% tolerance, I may NOT re-issue a GFE. If a subsequent changed circumstance (assumably more than 3 days after the initial changed circumstance) puts me over the 10%, I can only re-issue the GFE but only to the extent that the second changed circumstance put me over the 10%.
Has anyone else heard this?
You can re-issue and you may very well want to, because if something else comes along more than 3 days later and you didn't and now the two together throws you over, you will only be able to change for the new changed circumstance.
I think your speaker confused him/herself on that topic.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/03/09 08:22 PM
I think someone had asked about legal vs letter size on the GFE...thought this might be of interest:
On December 1, 2009, we received additional communication from HUD, stating that a legal size (8 ½” X 14”) GFE is acceptable. Using the legal size GFE will permit additional lines in Blocks 3, 6 and 11.
On December 1, 2009, we received additional communication from HUD, stating that a legal size (8 ½” X 14”) GFE is acceptable. Using the legal size GFE will permit additional lines in Blocks 3, 6 and 11.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/03/09 08:33 PM
Originally Posted By: In Need of Help 101
What was the final decision on credit life premiums? Do we show it on the GFE or not?
Having training in a little while and wanted clarification before I go in...say a prayer for me!!!
Having training in a little while and wanted clarification before I go in...say a prayer for me!!!
I'm probably late, BUT, if it's optional insurance, you don't show them on the GFE and the premium would go in 1300 of the HUD.
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/03/09 09:02 PM
I didn't scroll back and apologize if it has been stated but the revised HUD settlement booklets are now available through HUD. We ordered some today.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/03/09 09:06 PM
thanks for that tip, pjs!
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/03/09 09:14 PM
Thanks for posting this. Would you please provide a link to where you saw this?
I just saw a press release regarding live online presentations being offered by HUD about the RESPA changes. Here's a link to the press release.
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2009/HUDNo.09-218
I just saw a press release regarding live online presentations being offered by HUD about the RESPA changes. Here's a link to the press release.
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2009/HUDNo.09-218
Posted By: Sage
Re: RESPA changes 1-1-10 - 12/03/09 09:21 PM
Can you tell me where the booklet info is on the HUD website?
Posted By: ForceFull1
Re: RESPA changes 1-1-10 - 12/03/09 09:33 PM
This question was asked earlier by another user, but not answered. I am repeating it, more or less, as it also affects us.
We currently never charge the customer for credit reports for in-house loans. As of 1/1/10, should we:
1) Disclose the credit report charge in block 3 with an offset credit in block 2, or
2) Disclose only in block 3, and list as POC (lender) on the HUD-1?
Thanks!
We currently never charge the customer for credit reports for in-house loans. As of 1/1/10, should we:
1) Disclose the credit report charge in block 3 with an offset credit in block 2, or
2) Disclose only in block 3, and list as POC (lender) on the HUD-1?
Thanks!
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 12/03/09 09:46 PM
Originally Posted By: Sage
Can you tell me where the booklet info is on the HUD website?
Please. I just checked the HUD web site, and the 1997 edition of the booklet is there.
Posted By: Steve Doty
Re: RESPA changes 1-1-10 - 12/03/09 10:02 PM
ForceFull1,
You will choose option #1, since you know the institution will be eating the fee prior to issuing the GFE.
You will choose option #1, since you know the institution will be eating the fee prior to issuing the GFE.
Posted By: Bville
Re: RESPA changes 1-1-10 - 12/03/09 10:18 PM
We have many loans that we do not order appraisals for because the borrower brings in an appraisal that was used for a previous loan. Today we would include the cost of the old appraisal but show it as POC.
How do we handle the situation under the new rules?
1) put the typical appraisal cost on the GFE and the old appraisal cost as POC on the HUD?
2) put the tyupical appraisal cost on the GFE and nothing on the HUD?
3)put no appraisal costs on either the GFE or the HUD since there will be no appraisal for this loan?
How do we handle the situation under the new rules?
1) put the typical appraisal cost on the GFE and the old appraisal cost as POC on the HUD?
2) put the tyupical appraisal cost on the GFE and nothing on the HUD?
3)put no appraisal costs on either the GFE or the HUD since there will be no appraisal for this loan?
Posted By: Steve Doty
Re: RESPA changes 1-1-10 - 12/03/09 10:26 PM
Lender Paid Determined After GFE Is Issued:
If a loan originator (other than for no-cost loans), real estate agent, other settlement service provider, or other person pays for a charge that was included on the GFE, the charge should be listed in the borrower’s column on page 2 of the HUD-1. That charge should also be offset by listing a credit in that amount to the borrower on lines 204-209 on page 1 of the HUD-1 identifying the party paying the charge. [Appendix A to Part 3500 – page 7024]
“No” or “Partial” Cost Loans Determined Before GFE Is Issued:
In the case of ‘‘no cost’’ loans where ‘‘no cost’’ encompasses third party fees as well as the upfront payment to the loan originator, the third party services covered by the ‘‘no cost’’ provisions must be itemized and listed in the borrower’s column on the HUD–1/1A with the charge for the third party service. These itemized charges must be offset with a negative adjusted origination charge on Line 803 and recorded in the columns. [Appendix A to Part 3500 – page 7024]
If a loan originator (other than for no-cost loans), real estate agent, other settlement service provider, or other person pays for a charge that was included on the GFE, the charge should be listed in the borrower’s column on page 2 of the HUD-1. That charge should also be offset by listing a credit in that amount to the borrower on lines 204-209 on page 1 of the HUD-1 identifying the party paying the charge. [Appendix A to Part 3500 – page 7024]
“No” or “Partial” Cost Loans Determined Before GFE Is Issued:
In the case of ‘‘no cost’’ loans where ‘‘no cost’’ encompasses third party fees as well as the upfront payment to the loan originator, the third party services covered by the ‘‘no cost’’ provisions must be itemized and listed in the borrower’s column on the HUD–1/1A with the charge for the third party service. These itemized charges must be offset with a negative adjusted origination charge on Line 803 and recorded in the columns. [Appendix A to Part 3500 – page 7024]
Posted By: Tesla
Re: RESPA changes 1-1-10 - 12/03/09 11:07 PM
I feel really stupid asking this - but I don't understand the phrase "shop for a service". We have three or four title companies or a list of appraisers and we choose randomly who we will use on each transaction. Does that mean we do NOT have to provide a list to the borrower or does that mean we have to provide a list and let them choose?
Sorry for the dumb question, but I am hung up on this issue.
Sorry for the dumb question, but I am hung up on this issue.
Posted By: river girl
Re: RESPA changes 1-1-10 - 12/04/09 12:23 AM
Meeting tomorrow with mortgage and want to make sure I have it correct.
When issuing a revised GFE due to true changed circumstances such as $ amount of loan amount is increasing after appraisal comes in and they can borrow additional 10,000.....if we are far enough in the loan process that we have actual $ amounts for appraisal, title insurance, settlement charge, escrow amounts....we can't update those on the revised gfe since they aren't changing due to the increase in funds (the changed circumstance). We have to carry over from the inital gfe those original estimated fees and wait until the HUD to list the accurate fees.
Hope what I'm asking makes sense but hope even more I have it right
When issuing a revised GFE due to true changed circumstances such as $ amount of loan amount is increasing after appraisal comes in and they can borrow additional 10,000.....if we are far enough in the loan process that we have actual $ amounts for appraisal, title insurance, settlement charge, escrow amounts....we can't update those on the revised gfe since they aren't changing due to the increase in funds (the changed circumstance). We have to carry over from the inital gfe those original estimated fees and wait until the HUD to list the accurate fees.
Hope what I'm asking makes sense but hope even more I have it right
Posted By: Runreb
Re: RESPA changes 1-1-10 - 12/04/09 12:37 AM
Attorney Fee-
Lender prepares TIL, deed of trust, closing package and sends to an Attorney. The Attorney prepares the HUD, does the title search, and closes the loan. Should the Attorney's fee be disclosed in block 4 on the new GFE?
Lender prepares TIL, deed of trust, closing package and sends to an Attorney. The Attorney prepares the HUD, does the title search, and closes the loan. Should the Attorney's fee be disclosed in block 4 on the new GFE?
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/04/09 12:24 PM
Originally Posted By: Sinatra Fan
Originally Posted By: Sage
Can you tell me where the booklet info is on the HUD website?
Please. I just checked the HUD web site, and the 1997 edition of the booklet is there.
It might be something that you have to call and order the new books. I'll call at 8 and get back to you. The loan VP that called and ordered the books made sure that those were the new booklets before ordering them for us. He told me he had the woman double check to make sure. I'll let you know after I call.
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/04/09 12:28 PM
Originally Posted By: SkiDoo
I feel really stupid asking this - but I don't understand the phrase "shop for a service". We have three or four title companies or a list of appraisers and we choose randomly who we will use on each transaction. Does that mean we do NOT have to provide a list to the borrower or does that mean we have to provide a list and let them choose?
Sorry for the dumb question, but I am hung up on this issue.
Sorry for the dumb question, but I am hung up on this issue.
How I understand it is if you choose the providers then you do not have to have any list for the borrower. If you let the borrower pick then you need a list of recommended providers ( a list) to give to the borrower.
We do the appraisers like you do - we choose so with new RESPA we can do away with the required list.
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/04/09 12:33 PM
Originally Posted By: ArrowHead
ForceFull1,
You will choose option #1, since you know the institution will be eating the fee prior to issuing the GFE.
You will choose option #1, since you know the institution will be eating the fee prior to issuing the GFE.
I still have problems with that issue of the credit bureau fee- we don't waive it, we never charged the customer for it ever- I would not say the bank eats the fee- I'd say we pay the bill at the end of the month. I don't see how you should put a fee down when you never ever charged a borrower for it. It's not a hidden fee, it's not combined with any other fee either. Doesn't make sense to me at all.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/04/09 12:44 PM
Originally Posted By: Runreb
Attorney Fee-
Lender prepares TIL, deed of trust, closing package and sends to an Attorney. The Attorney prepares the HUD, does the title search, and closes the loan. Should the Attorney's fee be disclosed in block 4 on the new GFE?
Lender prepares TIL, deed of trust, closing package and sends to an Attorney. The Attorney prepares the HUD, does the title search, and closes the loan. Should the Attorney's fee be disclosed in block 4 on the new GFE?
Yes
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 12/04/09 01:09 PM
Originally Posted By: pjs
Originally Posted By: Sinatra Fan
Originally Posted By: Sage
Can you tell me where the booklet info is on the HUD website?
Please. I just checked the HUD web site, and the 1997 edition of the booklet is there.
It might be something that you have to call and order the new books. I'll call at 8 and get back to you. The loan VP that called and ordered the books made sure that those were the new booklets before ordering them for us. He told me he had the woman double check to make sure. I'll let you know after I call.
Our vender had a 20% discount if we "pre-ordered" the booklets. Kind of like - Order now and you'll be first in line when it is finally published.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 12/04/09 01:19 PM
Originally Posted By: river girl
Meeting tomorrow with mortgage and want to make sure I have it correct.
When issuing a revised GFE due to true changed circumstances such as $ amount of loan amount is increasing after appraisal comes in and they can borrow additional 10,000.....if we are far enough in the loan process that we have actual $ amounts for appraisal, title insurance, settlement charge, escrow amounts....we can't update those on the revised gfe since they aren't changing due to the increase in funds (the changed circumstance). We have to carry over from the inital gfe those original estimated fees and wait until the HUD to list the accurate fees.
Hope what I'm asking makes sense but hope even more I have it right
When issuing a revised GFE due to true changed circumstances such as $ amount of loan amount is increasing after appraisal comes in and they can borrow additional 10,000.....if we are far enough in the loan process that we have actual $ amounts for appraisal, title insurance, settlement charge, escrow amounts....we can't update those on the revised gfe since they aren't changing due to the increase in funds (the changed circumstance). We have to carry over from the inital gfe those original estimated fees and wait until the HUD to list the accurate fees.
Hope what I'm asking makes sense but hope even more I have it right
This is exactly how we understand it. However, since your title insurance premium for the lender's policy was dependant on the loan amount, and it changed, it is our understanding that particular fee can change.
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 12/04/09 01:22 PM
Our vender had a 20% discount if we "pre-ordered" the booklets. Kind of like - Order now and you'll be first in line when it is finally published.
That's what we did - I haven't seen an e-mail from the vendor that the new book has been released.
That's what we did - I haven't seen an e-mail from the vendor that the new book has been released.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/04/09 01:48 PM
Originally Posted By: pjs
Originally Posted By: SkiDoo
I feel really stupid asking this - but I don't understand the phrase "shop for a service". We have three or four title companies or a list of appraisers and we choose randomly who we will use on each transaction. Does that mean we do NOT have to provide a list to the borrower or does that mean we have to provide a list and let them choose?
Sorry for the dumb question, but I am hung up on this issue.
Sorry for the dumb question, but I am hung up on this issue.
How I understand it is if you choose the providers then you do not have to have any list for the borrower. If you let the borrower pick then you need a list of recommended providers ( a list) to give to the borrower.
We do the appraisers like you do - we choose so with new RESPA we can do away with the required list.
Keep in mind appraisers can NOT be chosen by the borrower, so therefore, never will there be a "shopping list".
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/04/09 01:51 PM
Originally Posted By: pjs
Originally Posted By: ArrowHead
ForceFull1,
You will choose option #1, since you know the institution will be eating the fee prior to issuing the GFE.
You will choose option #1, since you know the institution will be eating the fee prior to issuing the GFE.
I still have problems with that issue of the credit bureau fee- we don't waive it, we never charged the customer for it ever- I would not say the bank eats the fee- I'd say we pay the bill at the end of the month. I don't see how you should put a fee down when you never ever charged a borrower for it. It's not a hidden fee, it's not combined with any other fee either. Doesn't make sense to me at all.
pjs, I have the very same problem and have had forEVER. We don't know the charge until we get the bill which is often WAY after closing. It's always been a problem. Not a problem on secondary market, but is a problem for our in-house loans, mortgage or otherwise.
The ONLY thing I can think of to do (but haven't done it yet) is use "average charge" for that fee and show an "average credit"...it's not going to affect the borrower one way or the other. My other choice is to continue ignoring it all together.
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/04/09 01:57 PM
I should write this in BOLD and apologize for not checking myself with HUD before I said the booklets were ready. I was told a while ago that they would not be ready until the first of the year. THE BOOKLETS ARE NOT READY. The lady told me that they are working on them and to check back the beginning of the year. Now I need to inform my loan guy that he was wrong.
The HUD # is 1-800-767-7468 - the booklets are free, you can not pre-order them, and as far as I know right now there are no restrictions on how many you order.
I'm so sorry for the previous post.
The HUD # is 1-800-767-7468 - the booklets are free, you can not pre-order them, and as far as I know right now there are no restrictions on how many you order.
I'm so sorry for the previous post.
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 12/04/09 02:15 PM
Hey, no worries, PJS! Errors of enthusiasm are the best kind.
If that's your only mistake in this whole RESPA compliance process, you are way, way, way ahead of the pack.
If that's your only mistake in this whole RESPA compliance process, you are way, way, way ahead of the pack.
Posted By: ImGoinNuts
Re: RESPA changes 1-1-10 - 12/04/09 02:33 PM
I'm sure this is a crazy question and I'm probably overthinking this - but on the HUD FAQ's - there is a question on the P.O.C.'s (which no longer exists on the GFE)- and the answer included the statement "The standardized GFE form does not allow information to be included on any part of those totals that would be paid outside of closing. Such information would not help borrowers to shop for loans and would not facilitate comparison of the charges on the GFE with the charges on the HUD-1."
So my question is - if it is P.O.C. (for example, homeowner's insurance on a refi) - do we not include the amount at all on the GFE?
I think I need to go back to the beginning and start over...
So my question is - if it is P.O.C. (for example, homeowner's insurance on a refi) - do we not include the amount at all on the GFE?
I think I need to go back to the beginning and start over...
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/04/09 03:05 PM
Originally Posted By: Reads Regs
Thanks for posting this. Would you please provide a link to where you saw this?
I just saw a press release regarding live online presentations being offered by HUD about the RESPA changes. Here's a link to the press release.
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2009/HUDNo.09-218
I just saw a press release regarding live online presentations being offered by HUD about the RESPA changes. Here's a link to the press release.
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2009/HUDNo.09-218
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 12/04/09 03:17 PM
Quote:
Just saw this today. Did anyone listen to yesterday's presentation? Are these all going to address different topics? I really haven't time to listen to all five of them!
I was kind of wondering the same thing. Also wondering how you access the "live online presentation" or even the recording of it. I don't see in the press release where the instructions are, and none of them are listed on the Webcast page of HUD's website.
Posted By: Steve Doty
Re: RESPA changes 1-1-10 - 12/04/09 03:20 PM
Originally Posted By: RR joker
Originally Posted By: pjs
Originally Posted By: ArrowHead
ForceFull1,
You will choose option #1, since you know the institution will be eating the fee prior to issuing the GFE.
You will choose option #1, since you know the institution will be eating the fee prior to issuing the GFE.
I still have problems with that issue of the credit bureau fee- we don't waive it, we never charged the customer for it ever- I would not say the bank eats the fee- I'd say we pay the bill at the end of the month. I don't see how you should put a fee down when you never ever charged a borrower for it. It's not a hidden fee, it's not combined with any other fee either. Doesn't make sense to me at all.
pjs, I have the very same problem and have had forEVER. We don't know the charge until we get the bill which is often WAY after closing. It's always been a problem. Not a problem on secondary market, but is a problem for our in-house loans, mortgage or otherwise.
The ONLY thing I can think of to do (but haven't done it yet) is use "average charge" for that fee and show an "average credit"...it's not going to affect the borrower one way or the other. My other choice is to continue ignoring it all together.
Remember the settlement agent shall complete the HUD to itemize all charges upon the borrower and the seller by the lender....whether to be paid at settlement or outside of settlement...... If the bank is paying the bill at the end of the month or on each loan. It is still waiving, eating, or paying this fee for the customer. Even with todays rules it should be listed as "POC" if that is the banks practice.
As far as not knowing the actual charge, you hit it on the head! I think we will be seeing more banks start utilizing the average charge method.
Posted By: Steve Doty
Re: RESPA changes 1-1-10 - 12/04/09 03:23 PM
Originally Posted By: Alwayscompliant
I'm sure this is a crazy question and I'm probably overthinking this - but on the HUD FAQ's - there is a question on the P.O.C.'s (which no longer exists on the GFE)- and the answer included the statement "The standardized GFE form does not allow information to be included on any part of those totals that would be paid outside of closing. Such information would not help borrowers to shop for loans and would not facilitate comparison of the charges on the GFE with the charges on the HUD-1."
So my question is - if it is P.O.C. (for example, homeowner's insurance on a refi) - do we not include the amount at all on the GFE?
I think I need to go back to the beginning and start over...
So my question is - if it is P.O.C. (for example, homeowner's insurance on a refi) - do we not include the amount at all on the GFE?
I think I need to go back to the beginning and start over...
The GFE will need to include an estimate of charges (estimate...thats a laugh) that the borrower will "likely to incur". The insurance will need to be on the GFE,then listed as POC on the settlement statement.
Posted By: TINKerBell
Re: RESPA changes 1-1-10 - 12/04/09 03:48 PM
Originally Posted By: Reads Regs
Thanks for posting this. Would you please provide a link to where you saw this?
I just saw a press release regarding live online presentations being offered by HUD about the RESPA changes. Here's a link to the press release.
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2009/HUDNo.09-218
I just saw a press release regarding live online presentations being offered by HUD about the RESPA changes. Here's a link to the press release.
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2009/HUDNo.09-218
it must be an age thing....I went to the link, and read the press release. My question is....how do I go about viewing a session? I went to HUD's website, and there is nothing there about a webcast for RESPA. Anyone know how to access it?
Posted By: Cloud9
Re: RESPA changes 1-1-10 - 12/04/09 04:28 PM
Can someone clear this up for me? I have a question pertaining to loans with real estate collateral and additional collateral such as a car or a recreational vehicle. If we are providing a hud-1 or hud-1A settlement statement to the borrower, would we also list the UCC filing fee and or the Secured Title fee for the car/rv on the settlement statement as well? What about VSI? If they should be on the HUD-1 could you tell me on what lines? Thank you!!
Posted By: river girl
Re: RESPA changes 1-1-10 - 12/04/09 05:10 PM
On the GFE, blocks 9 and 11. If this is a purchase and we require 1 years homeowners paid by borrower upfront and they want to escrow for future payments, would we would include the annaul cost of homeonwers in block 11 and 3 months worth (if that is what our escrow requires) included in block 9?
What about for a refinance? If they borrower already has insurance but wants to escrow on the new loan - do we still list fee for 1 year of insu on block 11?
When these flow over to the HUD and we complete lines 903 and 1002 - are we placing the fees in both areas? that seems to me like we are double listing the fee.
What about for a refinance? If they borrower already has insurance but wants to escrow on the new loan - do we still list fee for 1 year of insu on block 11?
When these flow over to the HUD and we complete lines 903 and 1002 - are we placing the fees in both areas? that seems to me like we are double listing the fee.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/04/09 05:42 PM
Originally Posted By: river girl
On the GFE, blocks 9 and 11. If this is a purchase and we require 1 years homeowners paid by borrower upfront and they want to escrow for future payments, would we would include the annaul cost of homeonwers in block 11 and 3 months worth (if that is what our escrow requires) included in block 9?
You would include the annual cost in Block 11. You would calculate the opening deposit (using an aggregate analysis) for Block 9.
Quote:
What about for a refinance? If they borrower already has insurance but wants to escrow on the new loan - do we still list fee for 1 year of insu on block 11?
Yes. Because you require insurance to be paid to make a home loan, you must list the insurance in Block 11.
Quote:
When these flow over to the HUD and we complete lines 903 and 1002 - are we placing the fees in both areas? that seems to me like we are double listing the fee.
Line 903 would be the cross over from Block 11. The 1000 series would be the Block 9 amount. It isn't doubling up. It's showing what you need to close the loan (Block 11 - 903) and what you need to establish the escrow for next year's payment (Block 9 - 1001).
Posted By: Patsy Cline
RESPA "Plain English" Hud's PP - 12/04/09 05:58 PM
RESPA Plain English HUD PowerPoint
I just found this on Hud's website. It is the slides from yesterday's first Plain English Webcast.
I just found this on Hud's website. It is the slides from yesterday's first Plain English Webcast.
Posted By: Reads Regs
Re: RESPA "Plain English" Hud's PP - 12/04/09 06:24 PM
Thank you!! Now we need them to post the archive of yesterday's web cast.
Posted By: Truffle Royale
Re: RESPA "Plain English" Hud's PP - 12/04/09 06:28 PM
FlamingoGal & Tink, I went to the link Tink used and clicked on Schedule of Upcoming Webcasts. That took me here where it says Note, the times they're using are EST.
Quote:
Live links for the webcast and training materials will appear in a box on the webcast page approximately 1/2 hour before the broadcast taking you to the video.
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 12/04/09 06:51 PM
Quote:
What about for a refinance? If they borrower already has insurance but wants to escrow on the new loan - do we still list fee for 1 year of insu on block 11?
Yes. Because you require insurance to be paid to make a home loan, you must list the insurance in Block 11.
That doesn't make sense to me - there is no premium due. To include one in Block 11 implies that the applicants will be paying that at closing. (Not that anything about this rule makes sense) We will not be displaying the premium at closing...
Quote:
When these flow over to the HUD and we complete lines 903 and 1002 - are we placing the fees in both areas? that seems to me like we are double listing the fee.
Line 903 would be the cross over from Block 11. The 1000 series would be the Block 9 amount. It isn't doubling up. It's showing what you need to close the loan (Block 11 - 903) and what you need to establish the escrow for next year's payment (Block 9 - 1001). [/quote]
Posted By: swiggles
Re: RESPA changes 1-1-10 - 12/04/09 07:03 PM
Originally Posted By: Cowboys Fan
Q and A Use the same sign on that you used for the Webinar and the Q and A is at the top.
Posted By: Mr. E.
Re: RESPA changes 1-1-10 - 12/04/09 08:07 PM
I just reviewed HUD's RESPA training Powerpoint presentation. I'm a little concerned. In the Wholesale origination charges section of the examples, I don't think that they are expressing the YSP properly. I thought that we included the YSP in box 1 and backed it out in box 2.2.The Hud example does not appear to be including the YSP in the Origination charges. Is this correct? (I hope not)
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/04/09 08:16 PM
To get the Webinar Q&As (or any webinar info), you'll need to contact BOL. I simply speak for them. I have no control or access over the materials.
Posted By: Cloud9
Re: RESPA changes 1-1-10 - 12/04/09 08:25 PM
Originally Posted By: Cloud9
Can someone clear this up for me? I have a question pertaining to loans with real estate collateral and additional collateral such as a car or a recreational vehicle. If we are providing a hud-1 or hud-1A settlement statement to the borrower, would we also list the UCC filing fee and or the Secured Title fee for the car/rv on the settlement statement as well? What about VSI? If they should be on the HUD-1 could you tell me on what lines? Thank you!!
Anyone? Please?
Posted By: David Dickinson
Re: RESPA "Plain English" Hud's PP - 12/04/09 08:32 PM
Originally Posted By: Lady Joey's Mom
RESPA Plain English HUD PowerPoint
I just found this on Hud's website. It is the slides from yesterday's first Plain English Webcast.
I just found this on Hud's website. It is the slides from yesterday's first Plain English Webcast.
Thanks. Maybe I'm just dense, but I can't figure out how to sign up for their training. Here's a link to the announcement, but I don't see any instructions:
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2009/HUDNo.09-218
Also, isn't it nice how they announced the training on the same day as the first session. Like this was a surprise - last minute decision of theirs???? They also don't list this in the Webcast schedule and they don't have the training from Thursday in the archives yet.
Posted By: Clint,,,,,
Re: RESPA "Plain English" Hud's PP - 12/04/09 08:45 PM
David,
What else can you expect from DUH!!!!!
What else can you expect from DUH!!!!!
Posted By: Princess Romeo
Re: RESPA "Plain English" Hud's PP - 12/04/09 08:53 PM
If ever there was a regulatory agency that needed to be replaced........
I wish that RESPA could be taken away from HUD and given to FRB to write. OR - remove all LENDER related provisions to RESPA and fold them into Regulation Z. Then HUD could simply concentrate on abuses by the real estate brokers, home developers, escrow and title companies (and there are PLENTY of abuses there but little enforcement it seems.)
I wish that RESPA could be taken away from HUD and given to FRB to write. OR - remove all LENDER related provisions to RESPA and fold them into Regulation Z. Then HUD could simply concentrate on abuses by the real estate brokers, home developers, escrow and title companies (and there are PLENTY of abuses there but little enforcement it seems.)
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/04/09 08:57 PM
Originally Posted By: Yaz8
I just reviewed HUD's RESPA training Powerpoint presentation. I'm a little concerned. In the Wholesale origination charges section of the examples, I don't think that they are expressing the YSP properly. I thought that we included the YSP in box 1 and backed it out in box 2.2.The Hud example does not appear to be including the YSP in the Origination charges. Is this correct? (I hope not)
Think about it. Hud's intent for YSP is for all of it to go to the borrower, after all it's THEY that are buying their rate up...so I wouldn't imagine them doing it any other way.
Posted By: Truffle Royale
Re: RESPA "Plain English" Hud's PP - 12/04/09 08:59 PM
Originally Posted By: Truffle Royale
FlamingoGal & Tink, I went to the link Tink used and clicked on Schedule of Upcoming Webcasts. That took me here where it says Note, the times they're using are EST.
Quote:
Live links for the webcast and training materials will appear in a box on the webcast page approximately 1/2 hour before the broadcast taking you to the video.
Here's the information about the HUD webcasts that I posted earlier today.
Posted By: Sage
Re: RESPA changes 1-1-10 - 12/04/09 09:03 PM
I looked at the HUD Plain English slides and do I understand this correctly? It says we have to redisclose the GFE at the time we rate lock? What dates do you then "update" in the Important Dates section? Do they mean the 10 days?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/04/09 09:18 PM
Without looking, I would imagine they mean how long the lock is good for and change 4 to NA.
Posted By: Sheldon Hendrix
Re: RESPA "Plain English" Hud's PP - 12/06/09 04:30 AM
Originally Posted By: David Dickinson
Originally Posted By: Lady Joey's Mom
RESPA Plain English HUD PowerPoint
I just found this on Hud's website. It is the slides from yesterday's first Plain English Webcast.
I just found this on Hud's website. It is the slides from yesterday's first Plain English Webcast.
Thanks. Maybe I'm just dense, but I can't figure out how to sign up for their training. Here's a link to the announcement, but I don't see any instructions:
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2009/HUDNo.09-218
Ditto. If anyone figures out how to sign up will you please post.
Posted By: rlcarey
Re: RESPA "Plain English" Hud's PP - 12/06/09 01:30 PM
There is no sign up required.
Q. I heard a webcast has been scheduled but I don't see it listed on your website.
Answer:Notices of upcoming webcasts usually appear on the webcast schedule about one week before they air. Live links for the show appear about 30 minutes before the show starts.
Q. I heard a webcast has been scheduled but I don't see it listed on your website.
Answer:Notices of upcoming webcasts usually appear on the webcast schedule about one week before they air. Live links for the show appear about 30 minutes before the show starts.
Posted By: Sheldon Hendrix
Re: RESPA "Plain English" Hud's PP - 12/06/09 08:47 PM
This may have already been addressed in this forum, but its grown way to big for me to dig through. If we are not escrowing, does the the escrow section on the first page of the GFE still need to contain the amount of the monthly payment from the "Summary of your loan" section? The instructions and Q&As make it appear that we should, but aren't direct in answering this.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/07/09 12:29 AM
Originally Posted By: Truffle Royale
Upon request, I broke the new RESPA out into individual threads according to application dates. This thread has gotten as cumbersome as it's topic. But you only have to search one thread. Splitting it up would make it harder to follow each offshoot so I'm not going to facilitate it. Besides, there's only three weeks left. Let's just hang in there with this one.
Posted By: RR Joker
Re: RESPA "Plain English" Hud's PP - 12/07/09 01:36 PM
Originally Posted By: Compliance Rules
This may have already been addressed in this forum, but its grown way to big for me to dig through. If we are not escrowing, does the the escrow section on the first page of the GFE still need to contain the amount of the monthly payment from the "Summary of your loan" section? The instructions and Q&As make it appear that we should, but aren't direct in answering this.
yes, use the payment amount you listed in Blk 4 and check no.
Posted By: Mr. E.
Re: RESPA "Plain English" Hud's PP - 12/07/09 02:06 PM
The HUD "Plain English" description of how to handle YSP seems to contradicts HUD's own instructions in Appendix C. It also definitely contradicts Compliance Coach's Guide to getting it right as well as Ivy Jackson's RESPA Lawyer's blog that is a very clear example that the YSP is included in Box 1 and credited back in box 2. I've contacted our resource for clarification. Has anyone else in the wholesale business noticed this?
Posted By: RR Joker
Re: RESPA "Plain English" Hud's PP - 12/07/09 02:35 PM
If you plan on keeping any of the YSP, you will have to disclose THAT amount in block 1. Any piece of any credit back to the borrower will go in 2.
Posted By: Mr. E.
Re: RESPA "Plain English" Hud's PP - 12/07/09 02:42 PM
That's not how it's portrayed in The "Plain English" pricing examples, there is no YSP in box 1 (orignation charges), just a credit in box 2.
Posted By: RR Joker
Re: RESPA "Plain English" Hud's PP - 12/07/09 04:23 PM
That was my point in another thread on this same topic. It's natural HUD wouldn't show it in the origination fee as their original intent/acceptance of a YSP is for it to go to the borrower as a credit to offset costs.
Rate buydown = paying more
Rate buyup = paying less
It was never really intended for the broker/lender to profit.
Rate buydown = paying more
Rate buyup = paying less
It was never really intended for the broker/lender to profit.
Posted By: RebekahL CRCM
Re: RESPA "Plain English" Hud's PP - 12/07/09 05:31 PM
Originally Posted By: David Dickinson
Originally Posted By: Lady Joey's Mom
RESPA Plain English HUD PowerPoint
I just found this on Hud's website. It is the slides from yesterday's first Plain English Webcast.
I just found this on Hud's website. It is the slides from yesterday's first Plain English Webcast.
Thanks. Maybe I'm just dense, but I can't figure out how to sign up for their training. Here's a link to the announcement, but I don't see any instructions:
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2009/HUDNo.09-218
Also, isn't it nice how they announced the training on the same day as the first session. Like this was a surprise - last minute decision of theirs???? They also don't list this in the Webcast schedule and they don't have the training from Thursday in the archives yet.
This morning I tried calling HUD to find out what the heck is going on. I got passed around a lot, and nobody knew what I was talking about. I finally learned their formula for e-mail addresses, and proceeded to express my frustration in an e-mail to Brian Sullivan (the PR contact on the press release), Vicki Bott (the speaker), and just for giggles, Secretary Shaun Donovan.
I actually got a reply back from Brian Sullivan, which said:"There is limited capacity for each of our presentations requiring us to do invitations via RSVP. The Mortgage Bankers Association is assisting in getting the word out but perhaps you didn’t get word through your trade association. Having said that, the session for December 16th looks pretty good. If you’re interested, we can give you specific instructions as to how to access that presentation. Otherwise, we do intend to post one of our presentations online shortly."
So, it sounds like the mulitple presentations are just repeats of the same thing. I also received a telephone call back from a staffer in the Public Affairs office, offering to take my e-mail address and e-mail me an invite. Call the number on the press release 202-708-0685 if you'd like to try the same thing.
Man, what a pain!!
Posted By: #Just Jay
Re: RESPA "Plain English" Hud's PP - 12/07/09 06:09 PM
I feel like a dumas... have my timezones mixed up today, and logged in promptly at noon, as it was concluding after adding an hour to the start time vs. backing up an hour.
<--- idiot
after adding an hour to the start time vs. backing up an hour.<--- idiot
Posted By: Runreb
Re: RESPA changes 1-1-10 - 12/07/09 06:26 PM
1.Am I correct in stating that Block 1 (our origination charge) is considered an interest rate dependent charge?
2.If we disclose $1000 but it changes to $1500 within the 10-day window do we have to re-disclose on a new GFE assuming it is considered an interest rate dependent charge?
I'm reviewing 3500.7(c).
2.If we disclose $1000 but it changes to $1500 within the 10-day window do we have to re-disclose on a new GFE assuming it is considered an interest rate dependent charge?
I'm reviewing 3500.7(c).
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/07/09 06:28 PM
The only way you might be able to do that is at rate lock. See page 1 of your GFE important dates. It states that some origination charges, etc may change until you lock your rate.
Posted By: Sage
Re: RESPA changes 1-1-10 - 12/07/09 06:34 PM
if the customer purchases a rate lock at some point after you provide the GFE - is it mandatory to send out a revised GFE showing the locked interest rate? The BOL Q and A #28 makes it sounds like redisclose is only optional.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/07/09 07:16 PM
If it causes a change in fees and P&I, I definitely would.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/07/09 07:19 PM
Sage, they addressed this specifically in the HUD webcast today.
Quote:
At lock, an updated GFE must be issued with "Important Dates" sections updated. Line 4 may contain "N/A" at this point.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/07/09 07:19 PM
Originally Posted By: Sage
if the customer purchases a rate lock at some point after you provide the GFE - is it mandatory to send out a revised GFE showing the locked interest rate? The BOL Q and A #28 makes it sounds like redisclose is only optional.
As a follow up to Jokers reply, I thought it was required due to confirming the appropriate dates in the "Important Dates" section. I seem to recall reading in on of the many FAQ's or power points that it was redisclose was required at lock.
edited to add: Truff beat me to it!
Posted By: Truffle Royale
Re: RESPA "Plain English" Hud's PP - 12/07/09 07:23 PM
Originally Posted By: Just Jay
I feel like a dumas... have my timezones mixed up today, and logged in promptly at noon, as it was concluding after adding an hour to the start time vs. backing up an hour.
<--- idiot
after adding an hour to the start time vs. backing up an hour.<--- idiot
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/07/09 07:25 PM
It makes sense since the date info will definitely change.
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 12/07/09 10:22 PM
Do i have this right: Block 1 of the GFE would include both our origination charge and a doc fee (if the fee is being paid to us)? Basically, the way i understand this is...if the fee is being paid to the loan originator (us), it has to go in block 1. Please correct me if i'm wrong.
Posted By: QCL
Re: RESPA changes 1-1-10 - 12/07/09 10:39 PM
Originally Posted By: Truffle Royale
Originally Posted By: Just Jay
I feel like a dumas... have my timezones mixed up today, and logged in promptly at noon, as it was concluding after adding an hour to the start time vs. backing up an hour.
<--- idiot
after adding an hour to the start time vs. backing up an hour.<--- idiot
To get an invite I have to call the number posted above?
Posted By: Melissa Brown
Re: RESPA changes 1-1-10 - 12/08/09 12:22 AM
No, block 1 is not interest rate dependant and cannot change at the point of the rate lock.
Posted By: Melissa Brown
Re: RESPA changes 1-1-10 - 12/08/09 12:43 AM
We use a contract processor and she is paid through escrow directly. Can we put her fee in the Block 3?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/08/09 02:58 AM
Originally Posted By: QueenChop'dLiver
To get an invite I have to call the number posted above?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/08/09 12:51 PM
Originally Posted By: Melissa Brown
No, block 1 is not interest rate dependant and cannot change at the point of the rate lock.
Block one could change at rate lock if the borrower chooses to pay point(s) that was not previously discclosed, or if they lock at a no point rate that was previously disclosed with points.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/08/09 02:02 PM
Originally Posted By: rjenkins
Do i have this right: Block 1 of the GFE would include both our origination charge and a doc fee (if the fee is being paid to us)? Basically, the way i understand this is...if the fee is being paid to the loan originator (us), it has to go in block 1. Please correct me if i'm wrong.
Not necessarily. If your settlement agent is charging a fee to prepare documents for you, then that would go in there as well.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/08/09 02:14 PM
Originally Posted By: Sox in 07
Originally Posted By: Melissa Brown
No, block 1 is not interest rate dependant and cannot change at the point of the rate lock.
Block one could change at rate lock if the borrower chooses to pay point(s) that was not previously discclosed, or if they lock at a no point rate that was previously disclosed with points.
It's going to be interesting to see how, at rate lock, if locked at an above par rate in which a lender/broker intends to keep a portion or all of the YSP, how THAT's gonna look! But, to me Sox...the above you have mentioned should really just affect box 2, unless you intend to check box 1 of Block 2, And that can only be done if you fund the loan, so a broker or non-funding FI can't do that.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/08/09 02:42 PM
We don't have broker deals (Thankfully). I am planning to include points, if any, in box 1.
Posted By: RR Sarah
Re: RESPA changes 1-1-10 - 12/08/09 03:55 PM
This may be a dumb question and I apologize if it has already been addressed in this thread but...say we are in position where we need to reissue the GFE. I understand that we need to provide the new GFE within 3 days of discovering the changed circumstance. Would we need to restart the 10 days?
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 12/08/09 04:11 PM
If you need to reissue due to changed circumstances or borrower requested change, the answer is "yes."
12) Q: If a revised GFE is provided due to changed circumstances or a borrower requested change, is it necessary to complete Line 2 of the "Important Dates" section on the revised GFE if the shopping period has ended and the borrower has already expressed intent to continue with the application?
A: Yes, the loan originator must complete Line 2 in the "Important dates" section. The date entered must be at least 10 business days from the date the revised GFE is provided to the borrower.
12) Q: If a revised GFE is provided due to changed circumstances or a borrower requested change, is it necessary to complete Line 2 of the "Important Dates" section on the revised GFE if the shopping period has ended and the borrower has already expressed intent to continue with the application?
A: Yes, the loan originator must complete Line 2 in the "Important dates" section. The date entered must be at least 10 business days from the date the revised GFE is provided to the borrower.
Posted By: RR Sarah
Re: RESPA changes 1-1-10 - 12/08/09 04:33 PM
Thank you.
Posted By: Noogabanker
Re: RESPA changes 1-1-10 - 12/08/09 05:22 PM
During a recent telephone seminar on the new Respa changes the facilitator stated that it will be prohibited to ask for proof of income such as W-2's/paystubs at application. She said that we would have to wait until the customer receives the GFE either by mail or in person. Does anyone else know about this?
Thanks!
Thanks!
Posted By: RobinB
Re: RESPA changes 1-1-10 - 12/08/09 05:42 PM
Originally Posted By: mgail
During a recent telephone seminar on the new Respa changes the facilitator stated that it will be prohibited to ask for proof of income such as W-2's/paystubs at application. She said that we would have to wait until the customer receives the GFE either by mail or in person. Does anyone else know about this?
Thanks!
Thanks!
Yes, that's true. You can't request income or asset info until after they are delivered the GFE.
Posted By: RobinB
Re: RESPA changes 1-1-10 - 12/08/09 05:45 PM
Which, is really stupid, because you can get the credit report fee and obtain the report right away. Which means you can deny them on credit during the first 3 days, but not on income if you need to see the W-2s and paystubs to determine.
Also, this will cost borrowers more because many will have to go have copies made and mail or fax them to you instead of having you copy them at time of application.
Also, this will cost borrowers more because many will have to go have copies made and mail or fax them to you instead of having you copy them at time of application.
Posted By: Noogabanker
Re: RESPA changes 1-1-10 - 12/08/09 05:47 PM
I had searched HUD's website and couldn't find anything. This is a pretty important point. You would think they would want to make sure we know!
Thanks!
Thanks!
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/08/09 05:54 PM
I know you can't make issuing the GFE subject to the customer providing that info, but if they bring it in anyway, why is that not acceptable? I haven't seen a restriction on that-I'd love a reference if someone has one.
Posted By: RobinB
Re: RESPA changes 1-1-10 - 12/08/09 06:02 PM
Originally Posted By: Sox in 07
I know you can't make issuing the GFE subject to the customer providing that info, but if they bring it in anyway, why is that not acceptable? I haven't seen a restriction on that-I'd love a reference if someone has one.
Don't think I have a reference beyond what our compliance group presented. Would love to see it too.
Posted By: Bullseye
Re: RESPA changes 1-1-10 - 12/08/09 06:08 PM
Originally Posted By: Sox in 07
I know you can't make issuing the GFE subject to the customer providing that info, but if they bring it in anyway, why is that not acceptable? I haven't seen a restriction on that-I'd love a reference if someone has one.
My understanding was that if they brought it in to you, you could use it. You just may not "request" it.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/08/09 06:10 PM
Thanks Bullseye.
Posted By: Noogabanker
Re: RESPA changes 1-1-10 - 12/08/09 06:22 PM
I found another thread that may help...check it out:
Pre-Approvals under new RESPA Rule
Pre-Approvals under new RESPA Rule
Posted By: Ninky
Re: RESPA changes 1-1-10 - 12/08/09 06:48 PM
This thread is so long, I apologize if this is a repeat....
We do not require a formal appraisal on 80% of our Home Equity loans. If the borrower wants, they may request an appraisal to try for that higher value, and I understand that this additional appraisal fee would be a changed circumstance and we would re-disclose. What if the borrower brings us a current, acceptable appraisal? Do we then have to redisclose with the Appraisal Fee (which he paid prior to our loan) and list the fee on the GFE which would be carried as a p.o.c. on the HUD. Wouldn't that creat a discrepancy between the GFE and HUD, since there is no distinction for poc on the GFE, but the poc amount is not included in the total on the HUD? Granted, it would be not be an increase(higher) on the HUD, but rather an overdisclosure on the GFE. We are testing for these different scenarios.
We do not require a formal appraisal on 80% of our Home Equity loans. If the borrower wants, they may request an appraisal to try for that higher value, and I understand that this additional appraisal fee would be a changed circumstance and we would re-disclose. What if the borrower brings us a current, acceptable appraisal? Do we then have to redisclose with the Appraisal Fee (which he paid prior to our loan) and list the fee on the GFE which would be carried as a p.o.c. on the HUD. Wouldn't that creat a discrepancy between the GFE and HUD, since there is no distinction for poc on the GFE, but the poc amount is not included in the total on the HUD? Granted, it would be not be an increase(higher) on the HUD, but rather an overdisclosure on the GFE. We are testing for these different scenarios.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/08/09 07:38 PM
Originally Posted By: mgail
During a recent telephone seminar on the new Respa changes the facilitator stated that it will be prohibited to ask for proof of income such as W-2's/paystubs at application. She said that we would have to wait until the customer receives the GFE either by mail or in person. Does anyone else know about this?
Thanks!
Thanks!
Review the following thread.
previous discussion
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/08/09 08:04 PM
Originally Posted By: Sox in 07
I know you can't make issuing the GFE subject to the customer providing that info, but if they bring it in anyway, why is that not acceptable? I haven't seen a restriction on that-I'd love a reference if someone has one.
Agree...so, if they come in in person and receive the GFE, you can go on with things. As has been said before, just how many people do you really think will take advantage of the 10 day shopping "spree"? You simply can't condition GIVING a GFE on receiving that info.
Posted By: RR Sarah
Re: RESPA changes 1-1-10 - 12/08/09 08:55 PM
So dumb question #2 from me today. Back to the 10 days...we don't have to wait the full 10 days to close the loan, correct?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/08/09 08:59 PM
No Sarah-just make sure you close within the proper TIL parameters-
Posted By: RR Sarah
Re: RESPA changes 1-1-10 - 12/08/09 09:02 PM
That's what I thought. Thanks Sox
Posted By: Sheldon Hendrix
Re: RESPA changes 1-1-10 - 12/08/09 10:42 PM
Doea anyone know where a good summary of these rules is located. I'm pretty sure ABA published one, but haven't been able to locate.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/08/09 11:13 PM
The ABA did not publish a Toolworks on the Reg. X changes like they did for the TILA MDIA/HOEPA/HPML changes.
The OTS had a telephone seminar on 11/3 with HUD officials. The slides and transcript are available on the following web page.
http://www.ots.treas.gov/index.cfm?p=Events&Date=03-Nov-09
The OTS had a telephone seminar on 11/3 with HUD officials. The slides and transcript are available on the following web page.
http://www.ots.treas.gov/index.cfm?p=Events&Date=03-Nov-09
Posted By: Sheldon Hendrix
Re: RESPA changes 1-1-10 - 12/08/09 11:36 PM
Thanks! I attended that, but didn't think about referring back to use as a summary.
I really wish ABA would have put out a Works on this subject, but I'm not sure how possible that could have been given how many times the Q&As were updated.
I really wish ABA would have put out a Works on this subject, but I'm not sure how possible that could have been given how many times the Q&As were updated.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 12/09/09 05:22 PM
Originally Posted By: ForceFull1
DU and LP underwriting charges. Do they belong in block 1 as part of the origination charge or in block 3 as a required service?
I've read up on the earlier discussions on taxes, but am not sure that this scenario has been addressed: if a first loan payment will fall after a tax payment is due, and we plan to collect the tax payment at closing, should the tax payment be disclosed on the GFE? If so, in what section?
I've read up on the earlier discussions on taxes, but am not sure that this scenario has been addressed: if a first loan payment will fall after a tax payment is due, and we plan to collect the tax payment at closing, should the tax payment be disclosed on the GFE? If so, in what section?
Originally Posted By: pjs
David answered the LP or DU fees in the Q&A of his webinar.
Underwriting fees (LP or DU) should be disclosed in Block 1 of the GFE. A credit should be listed in Block 2 if the lender knows prior to issuance of the GFE that it will absorb the fee.
Underwriting fees (LP or DU) should be disclosed in Block 1 of the GFE. A credit should be listed in Block 2 if the lender knows prior to issuance of the GFE that it will absorb the fee.
For Clarification, DU = Desktop Underwriter?, what is LP? Our processors are wanting to put our Underwriting fee in Block 3, I feel it should be in Block 1. What can help support my opinion?
Thanks
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/09/09 05:29 PM
Originally Posted By: DD Regs
For Clarification, DU = Desktop Underwriter?, what is LP?
LP = Loan Prospector. Freddie Mac's automated underwriting system.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/09/09 05:33 PM
LP = Loan Prospector. It's Freddie's version of DU
The underwriting fee is an origination charge and must be shown in block 1.
From Federal Register / Vol. 73, No. 222 / Monday, November 17, 2008 / Rules and Regulations page 68253:
Block 1, ‘‘Our origination charge.’’—The
loan originator must state here all charges
that all loan originators involved in this
transaction will receive, except for any
charge for the specific interest rate chosen
(points). A loan originator may not separately
charge any additional fees for getting this
loan, including for application, processing, or
underwriting. The amount stated in Block 1
is subject to zero tolerance, i.e., the amount
may not increase at settlement.
The underwriting fee is an origination charge and must be shown in block 1.
From Federal Register / Vol. 73, No. 222 / Monday, November 17, 2008 / Rules and Regulations page 68253:
Block 1, ‘‘Our origination charge.’’—The
loan originator must state here all charges
that all loan originators involved in this
transaction will receive, except for any
charge for the specific interest rate chosen
(points). A loan originator may not separately
charge any additional fees for getting this
loan, including for application, processing, or
underwriting. The amount stated in Block 1
is subject to zero tolerance, i.e., the amount
may not increase at settlement.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/09/09 05:35 PM
Originally Posted By: DD Regs
Originally Posted By: ForceFull1
DU and LP underwriting charges. Do they belong in block 1 as part of the origination charge or in block 3 as a required service?
I've read up on the earlier discussions on taxes, but am not sure that this scenario has been addressed: if a first loan payment will fall after a tax payment is due, and we plan to collect the tax payment at closing, should the tax payment be disclosed on the GFE? If so, in what section?
I've read up on the earlier discussions on taxes, but am not sure that this scenario has been addressed: if a first loan payment will fall after a tax payment is due, and we plan to collect the tax payment at closing, should the tax payment be disclosed on the GFE? If so, in what section?
Originally Posted By: pjs
David answered the LP or DU fees in the Q&A of his webinar.
Underwriting fees (LP or DU) should be disclosed in Block 1 of the GFE. A credit should be listed in Block 2 if the lender knows prior to issuance of the GFE that it will absorb the fee.
Underwriting fees (LP or DU) should be disclosed in Block 1 of the GFE. A credit should be listed in Block 2 if the lender knows prior to issuance of the GFE that it will absorb the fee.
For Clarification, DU = Desktop Underwriter?, what is LP? Our processors are wanting to put our Underwriting fee in Block 3, I feel it should be in Block 1. What can help support my opinion?
Thanks
DD-underwriting fees belong in block 1-all of the FAQ's and various "how to" guides make it clear that type of fee goes in block one.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 12/09/09 06:13 PM
Thanks Sox and Dan.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 12/09/09 07:33 PM
Any Laser Pro users here? Just got my first look at the new forms (GFE and HUD) and wouldn't you know it, they did just the opposite of MORVission,. LP has made all the docs 8.5x11. I am trying to find in the FAQ, haven't scanned the reg yet, but can the HUD be smaller thatn the modile form?
Why can't these people just follow the samples given by HUD
Why can't these people just follow the samples given by HUD
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 12/09/09 07:47 PM
What exactly are transfer taxes? Is this something you will know at the time of the GFE? I'm assuming so since it's zero tolerance...i had a processor ask me about them and i'm really not sure what to tell them they are.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/09/09 07:53 PM
Around here in New England, some states charge tax stamps, or transfer taxes on purchases. One or both parties pay some or all of a particular charge which is usually based on the sales price.
Posted By: Bville
Re: RESPA changes 1-1-10 - 12/09/09 07:54 PM
We use Laser Pro. The GFE and HUD statements I've played with all print on legal size paper.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 12/09/09 08:13 PM
Found my answer on the HUD size, 3500.9(5) says:
(5) The following variations in layout
and format are within the discretion of
persons reproducing the HUD–1 and do
not require prior HUD approval: size of
pages; tint or color of pages; size and
style of type or print; vertical spacing
between lines or provision for additional
(5) The following variations in layout
and format are within the discretion of
persons reproducing the HUD–1 and do
not require prior HUD approval: size of
pages; tint or color of pages; size and
style of type or print; vertical spacing
between lines or provision for additional
Posted By: Bville
Re: RESPA changes 1-1-10 - 12/09/09 08:31 PM
I keep reading and hearing contradictory information about title insurance.
Is the bank allowed to require that title insurance is purchased from a particular provider?
Just found Section 9 of RESPA that says no seller may require directly or indirectly as a condition to selling the property that title insurance be purchased by the buyer from any particular title company.
So it would seem that the bank could require a particular title company.
If the seller designates a title company in the Buy/Sell, can the bank require the use of that title company. My understanding is that if the buyer and seller use different title companies for Owner's and Lender's title insurance, costs go way up. I would hate for something like that to put us out of tolerance.
Is the bank allowed to require that title insurance is purchased from a particular provider?
Just found Section 9 of RESPA that says no seller may require directly or indirectly as a condition to selling the property that title insurance be purchased by the buyer from any particular title company.
So it would seem that the bank could require a particular title company.
If the seller designates a title company in the Buy/Sell, can the bank require the use of that title company. My understanding is that if the buyer and seller use different title companies for Owner's and Lender's title insurance, costs go way up. I would hate for something like that to put us out of tolerance.
Posted By: Jerod Moyer
Re: RESPA changes 1-1-10 - 12/09/09 08:52 PM
You can select the provider for them. Please note Appendix C of the regulation:
There is a 10 percent tolerance applied to the sum of the prices of each service listed in Block 3, Block 4, Block 5, Block 6, and Block 7, where the loan originator requires the use of a particular provider or the borrower uses a provider selected or identified by the loan originator. Any services in Block 4, Block 5, or Block 6 for which the borrower selects a provider other than one identified by the loan originator are not subject to any tolerance and, at settlement, would not be included in the sum of the charges on which the 10 percent tolerance is based. Where a loan originator permits a borrower to shop for third party settlement services, the loan originator must provide the borrower with a written list of settlement services providers at the time of the GFE, on a separate sheet of paper.
There is a 10 percent tolerance applied to the sum of the prices of each service listed in Block 3, Block 4, Block 5, Block 6, and Block 7, where the loan originator requires the use of a particular provider or the borrower uses a provider selected or identified by the loan originator. Any services in Block 4, Block 5, or Block 6 for which the borrower selects a provider other than one identified by the loan originator are not subject to any tolerance and, at settlement, would not be included in the sum of the charges on which the 10 percent tolerance is based. Where a loan originator permits a borrower to shop for third party settlement services, the loan originator must provide the borrower with a written list of settlement services providers at the time of the GFE, on a separate sheet of paper.
Posted By: Kash
Re: RESPA changes 1-1-10 - 12/09/09 08:54 PM
I have a question on the "Summary of your loan" section of the Good Faith Estimate.
How do I complete the boxes "Can your interest rate rise" & "Even if you make payments on time, can your monthly amount owed for principal, interest and any mortgage insurance rise" for a premium rate ARM?
I know most of the connections to Regulation Z have been severed with the new GFE but the only way I know to complete those two boxes for an ARM is to use the Regulation Z fully indexed rate based payment streams. That works fine for a discounted ARM where the payment amount & rate would rise for at least one payment stream.
It will not work for a premium ARM since the payment is already at its max from the first payment if you rely on the Early TIL.
I can't imagine they want us to some how show the payment going down in one box but a rising rate in the other.
How do I complete the boxes "Can your interest rate rise" & "Even if you make payments on time, can your monthly amount owed for principal, interest and any mortgage insurance rise" for a premium rate ARM?
I know most of the connections to Regulation Z have been severed with the new GFE but the only way I know to complete those two boxes for an ARM is to use the Regulation Z fully indexed rate based payment streams. That works fine for a discounted ARM where the payment amount & rate would rise for at least one payment stream.
It will not work for a premium ARM since the payment is already at its max from the first payment if you rely on the Early TIL.
I can't imagine they want us to some how show the payment going down in one box but a rising rate in the other.
Posted By: bstritecky
Re: RESPA changes 1-1-10 - 12/09/09 09:06 PM
This shouldn't be rocket science - but how does a bank participate in the HUD Outreach Campaign. I was not able to find any instructions in the press release on how to participate. Can anyone help?
Posted By: Frank
Re: RESPA changes 1-1-10 - 12/09/09 10:06 PM
Originally Posted By: Becky S.
This shouldn't be rocket science - but how does a bank participate in the HUD Outreach Campaign. I was not able to find any instructions in the press release on how to participate. Can anyone help?
I'd like to reach out to HUD........and get them around the neck.
Posted By: Jan94
Re: RESPA changes 1-1-10 - 12/09/09 11:06 PM
Originally Posted By: Bville
I keep reading and hearing contradictory information about title insurance.
Is the bank allowed to require that title insurance is purchased from a particular provider?
Just found Section 9 of RESPA that says no seller may require directly or indirectly as a condition to selling the property that title insurance be purchased by the buyer from any particular title company.
So it would seem that the bank could require a particular title company.
If the seller designates a title company in the Buy/Sell, can the bank require the use of that title company. My understanding is that if the buyer and seller use different title companies for Owner's and Lender's title insurance, costs go way up. I would hate for something like that to put us out of tolerance.
Is the bank allowed to require that title insurance is purchased from a particular provider?
Just found Section 9 of RESPA that says no seller may require directly or indirectly as a condition to selling the property that title insurance be purchased by the buyer from any particular title company.
So it would seem that the bank could require a particular title company.
If the seller designates a title company in the Buy/Sell, can the bank require the use of that title company. My understanding is that if the buyer and seller use different title companies for Owner's and Lender's title insurance, costs go way up. I would hate for something like that to put us out of tolerance.
How does this work for ORE properties where the bank is the seller? If the bank only has one title company available in their area, what do they do?
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/10/09 12:09 AM
Originally Posted By: Becky S.
This shouldn't be rocket science - but how does a bank participate in the HUD Outreach Campaign. I was not able to find any instructions in the press release on how to participate. Can anyone help?
See this thread . You must get an invite from HUD. Truffle Royale provided an e-mail address for the person at HUD that is handling the registration process.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 12/10/09 03:27 AM
"How does this work for ORE properties where the bank is the seller? If the bank only has one title company available in their area, what do they do?"
You have to let them choose and hope they choose the local company.
You have to let them choose and hope they choose the local company.
Posted By: country girl
Re: RESPA changes 1-1-10 - 12/10/09 03:37 AM
In reference to the bank selecting the title insurance provider so a list is not required----- The question I am trying to answer is, are there any problems if the selected title insurance provider has an affiliated business arrangement? Any thoughts?
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 12/10/09 03:54 AM
If they are an affiliated business, the only ones you can require the use of is an attorney, credit reporting agency, or real estate appraiser. That limitation has not changed (3500.15(b)(2). All others can just be a referral and it is up the borrower.
Posted By: country girl
Re: RESPA changes 1-1-10 - 12/10/09 04:40 AM
Thanks for the reply. Sorry, but I should have asked this in the original post, what if the bank is paying the fee (a no cost loan)? From what I read, I don't think it makes any difference, but, I would appreciate a confirmation.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 12/10/09 04:50 AM
They are still a settlement service provider for the loan, regardless of who is paying for them.
Posted By: country girl
Re: RESPA changes 1-1-10 - 12/10/09 04:56 AM
Thank you for your help!
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/10/09 01:50 PM
Originally Posted By: Bullseye
Originally Posted By: Sox in 07
I know you can't make issuing the GFE subject to the customer providing that info, but if they bring it in anyway, why is that not acceptable? I haven't seen a restriction on that-I'd love a reference if someone has one.
My understanding was that if they brought it in to you, you could use it. You just may not "request" it.
That's the respond we received from our compliance consultant- you can't demand it from them. Same case where someone comes to apply for a loan and brings in their information-we can accept it.
We have them complete a loan application so which would have their income on it- if that information from the application was not right per say income after receiving their W-2 or tax returns then I would believe we would have a changed circumstance.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/10/09 02:12 PM
Sorry to keep beating a dead horse:
So I quote OTI (which I have no idea how we will be able to give an accurate quote) and Transfer Deed Fee, knowing my borrower will not pay these per custom, not law, hence why I have to list them.
Per the FAQ's, I will need to show these as seller's credit on the front of my HUD to offset the fact the seller is paying for these items, as they always do.
Won't these new 'seller's credits' really begin to muck up true seller's credits vs. seller concessions as we prepare this loan for the secondary market, since now $1000-2500 extra will be added to that credit figure, which is generally limited by the secondary market to no more than 3%, or you have to reduce the loan/sales price?
So I quote OTI (which I have no idea how we will be able to give an accurate quote) and Transfer Deed Fee, knowing my borrower will not pay these per custom, not law, hence why I have to list them.
Per the FAQ's, I will need to show these as seller's credit on the front of my HUD to offset the fact the seller is paying for these items, as they always do.
Won't these new 'seller's credits' really begin to muck up true seller's credits vs. seller concessions as we prepare this loan for the secondary market, since now $1000-2500 extra will be added to that credit figure, which is generally limited by the secondary market to no more than 3%, or you have to reduce the loan/sales price?
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 12/10/09 03:39 PM
Regarding transfer taxes, my state is one state that is required by law that transfer taxes are paid by the seller. Since it is state law, do we put 0 or NA in block 8?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/10/09 03:40 PM
If required by law, then yes, you may.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 12/10/09 03:42 PM
we can put NA?
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 12/10/09 05:04 PM
"if that information from the application was not right per say income after receiving their W-2 or tax returns then I would believe we would have a changed circumstance."
Validation of applicant income would not result in a change of circumstances for RESPA purposes.
Validation of applicant income would not result in a change of circumstances for RESPA purposes.
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 12/10/09 05:25 PM
Randy, I'm not sure I follow....i see "changed circumstances" do NOT include the 6 pieces of information necessary to have a RESPA application UNLESS "the information changes or is found to be inaccurate after the GFE has been provided". Wouldn't this mean that if an applicant puts $75,000 down on their application as their income, but the subsequent tax returns that they provide to us only show an income of $50,000, we would have a "changed circumstance"?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/10/09 05:38 PM
Randy-I disagree-in the example rjenkins gives, if information (in this case income) given by the applicant is later found to be inaccurate, that would be a changed circumstance. One of the definitions of Change of Circumstance from the RESPA in Plain English:
"Changed situation or inaccurate information provided by the borrower after issuance of the GFE"
"Changed situation or inaccurate information provided by the borrower after issuance of the GFE"
Posted By: kristin09
Re: RESPA changes 1-1-10 - 12/10/09 06:50 PM
If you issue a GFE and the interest rate is floating and then you reissue the GFE due to the setting of the rate by the lender (for example, 45 days later)but the borrower has already indicated intent to proceed, does Line 2 in Important Dates change from the initial GFE? Is it 10 bus days from the date the revised GFE is provided to the borrower?
Posted By: HGICO
Re: RESPA changes 1-1-10 - 12/10/09 06:51 PM
You can get 100 free booklets per location from HUD per year. Vendors forget to mention that. I called HUD 12/7 and they said still not available and don't order until they are. They suggested "call back after Christmas".
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 12/10/09 07:19 PM
OK, I agree on the income, but the question is how does that really change the circumstances that are going to impact settlement costs and fees - unless you plan on denying the loan and making a counter-offer?
Posted By: ahou
Re: RESPA changes 1-1-10 - 12/10/09 07:26 PM
Mgmt asked this question "After closing, if we realize the charge was more and we will still be within the 10%, can we revise the HUD-1 and increase that charge and COLLECT the money from the borrower?" I told them no. Do you agree?
Posted By: waldensouth
Re: RESPA changes 1-1-10 - 12/10/09 07:49 PM
Originally Posted By: rlcarey
OK, I agree on the income, but the question is how does that really change the circumstances that are going to impact settlement costs and fees - unless you plan on denying the loan and making a counter-offer?
I know we can't deny the loan if everything the applicant provides us up front is accurate. However, I've instructed my folks that we can deny it if during underwriting is becomes evident that the facts are not the same and we would be unwilling to underwrite the loan based on the changed facts. For Example - ever know of a seller who overvalues their home? If they try to sell it for $500,000 and that is what the applicant applies for, but the appraisal comes in at $200,000 - would you really be willing to loan the customer $400,000? We may make a counteroffer or deny.
It is disturbing to me that none of the examples provided by HUD provide for this occurrence. I thought the "no-doc" loan was one of the reasons we had the mortgage crisis.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 12/10/09 07:52 PM
"I know we can't deny the loan if everything the applicant provides us up front is accurate."
Sure you can.
Sure you can.
Posted By: waldensouth
Re: RESPA changes 1-1-10 - 12/10/09 07:55 PM
Question - if they provide accurate information, we've pulled a CBR and its great - everything is good in underwriting - why would we deny the loan? Other than failure to provide flood insurance or failure to verify identity - what reasons would there be at this point?
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 12/10/09 07:58 PM
Kinda my thought....to me the issue is ...can we claim "changed circumstances" and re-issue a GFE? in the case that walden cites, you could re-issue the GFE based on the fact that the appraisal comes in with a drastically different value than what the applicant had listed.....kinda gets me thinking.....if you revise your GFE based on this, would that kind of get you out of the counteroffer part? I mean, you could look at your new GFE almost as being a counteroffer.
Posted By: beegee
Re: RESPA changes 1-1-10 - 12/10/09 08:22 PM
Does anyone have any direction on this:
If the borrower (by his own choosing) brings in at application, but prior to the GFE being delivered, bank statements, pay stubs etc - we can copy and use them?
If the borrower (by his own choosing) brings in at application, but prior to the GFE being delivered, bank statements, pay stubs etc - we can copy and use them?
Posted By: Mortimer
Re: RESPA changes 1-1-10 - 12/10/09 08:51 PM
Currently, a portion of our "application fee" covers the cost of the credit report, a fee that could vary between applications. Regardless of the cost of the credit report, our app fee remains the same. We are trying to figure out if and how we disclose it separately since technically, this is a third party charge. We will not collect the credit report fee up front. We will collect the entire application fee at the time allowed. Should we:
1) list the entire app fee in block 1, a credit in block 2 for the credit report, then re-post the fee in Block 3
or
2) list the credit report fee in Block 3 and the difference in Block 1
Part of my argument against option 1, would be the obstacle of not being able to check the "charge" box if the customer had to pay points. One of the solutions given to me was to offset the charge amount by the cost of the credit report. Can we do this?
I'm sorry if this was clarified earlier. I tried to go through the 44 pages of this thread for the answer, but can't seem to find anyone else with the same inquiry.
1) list the entire app fee in block 1, a credit in block 2 for the credit report, then re-post the fee in Block 3
or
2) list the credit report fee in Block 3 and the difference in Block 1
Part of my argument against option 1, would be the obstacle of not being able to check the "charge" box if the customer had to pay points. One of the solutions given to me was to offset the charge amount by the cost of the credit report. Can we do this?
I'm sorry if this was clarified earlier. I tried to go through the 44 pages of this thread for the answer, but can't seem to find anyone else with the same inquiry.
Posted By: jsw9880
Re: RESPA changes 1-1-10 - 12/10/09 10:00 PM
See the following HUD FAQ:
12) Q: If a revised GFE is provided due to changed circumstances or a borrower requested change, is it necessary to complete Line 2 of the ―Important Dates‖ section on the revised GFE if the shopping period has ended and the borrower has already expressed intent to continue with the application?
A: Yes, the loan originator must complete Line 2 in the ―Important dates‖ section. The date entered must be at least 10 business days from the date the revised GFE is provided to the borrower.
12) Q: If a revised GFE is provided due to changed circumstances or a borrower requested change, is it necessary to complete Line 2 of the ―Important Dates‖ section on the revised GFE if the shopping period has ended and the borrower has already expressed intent to continue with the application?
A: Yes, the loan originator must complete Line 2 in the ―Important dates‖ section. The date entered must be at least 10 business days from the date the revised GFE is provided to the borrower.
Posted By: jsw9880
Re: RESPA changes 1-1-10 - 12/10/09 10:02 PM
New Question - about capturing the applicant’s intent to proceed with the loan covered not by the initial GFE, but by a revised GFE, in order to charge fees other than for a credit report after that revised GFE is issued. The rule and FAQs don’t seem clear on this. I don’t see any postings on point.
In the event a revised GFE is issued due to an allowable changed circumstance, is there a requirement to capture the applicant’s intent to proceed for the loan that is represented by the revised GFE in order to charge fees? Or is the intent that was captured for the initial GFE sufficient to charge fees after a revised GFE is issued?
We don’t collect fees until closing, except for loans that withdraw, so we’re concerned that, if we issue a revised GFE, we have to capture intent before we could collect the fees in the event of a withdrawal after that point. What are the thoughts out there? Any gurus that can provide guidance based on anything HUD reps have indicated?
In the event a revised GFE is issued due to an allowable changed circumstance, is there a requirement to capture the applicant’s intent to proceed for the loan that is represented by the revised GFE in order to charge fees? Or is the intent that was captured for the initial GFE sufficient to charge fees after a revised GFE is issued?
We don’t collect fees until closing, except for loans that withdraw, so we’re concerned that, if we issue a revised GFE, we have to capture intent before we could collect the fees in the event of a withdrawal after that point. What are the thoughts out there? Any gurus that can provide guidance based on anything HUD reps have indicated?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/10/09 10:23 PM
jsw-That is a good question. I don't recall reading specifically about obtaining intent based on a redisclsoure.
David had noted earlier intent can be as simple as verbally confirming with the borrower they intend to proceed. I came up with a checklist which will require one of the staff to document how intent was noted. Verbal confirmation is probably the easiest route.
David had noted earlier intent can be as simple as verbally confirming with the borrower they intend to proceed. I came up with a checklist which will require one of the staff to document how intent was noted. Verbal confirmation is probably the easiest route.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/10/09 10:48 PM
If a bank has a closed-end credit home equity loan where the only fee charged to the consumer is the fee to record the mortgage, would it be safe to say that the very last figure on page 2 of the GFE which is the sum of A + B should equal the amount of the recording fee paid by the consumer plus the estimated insurance amount in block 11?
Odd day's interest is not collected on home equity loans. There is no escrow. The cost of the outside fee appraisal, credit report fee, the flood certification, the property search, the fee to file a notice of settlement(NOS), and a judgment search will all be paid for by the bank. These fees would be listed in blocks 3, 4, and 6 as appropriate and then a credit for the sum of such fees would be in block 2 box 2. The sum of the fee for the filing of the NOS and the mortgage recording fee would be shown in block 7. Block 1 would be zero.
If the appraisal is done by one of our in-house appraiser's, I would put the amount of the appraisal fee in box 1 and then make sure that the amount of the appraisal is included in the credit for box 2 and I would not list the appraisal in block 3.
Is this right?
Odd day's interest is not collected on home equity loans. There is no escrow. The cost of the outside fee appraisal, credit report fee, the flood certification, the property search, the fee to file a notice of settlement(NOS), and a judgment search will all be paid for by the bank. These fees would be listed in blocks 3, 4, and 6 as appropriate and then a credit for the sum of such fees would be in block 2 box 2. The sum of the fee for the filing of the NOS and the mortgage recording fee would be shown in block 7. Block 1 would be zero.
If the appraisal is done by one of our in-house appraiser's, I would put the amount of the appraisal fee in box 1 and then make sure that the amount of the appraisal is included in the credit for box 2 and I would not list the appraisal in block 3.
Is this right?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/10/09 11:06 PM
I agree.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/10/09 11:11 PM
Thanks David. My bank viewed your 11/10 BOL webinar on completing the new GFE and HUD-1/HUD-1A forms and I wanted to make sure I got this right. I really learned alot from the webinar. You and Jerod did a great job!!
Posted By: Princess Romeo
Re: RESPA changes 1-1-10 - 12/10/09 11:19 PM
BTW - I heard that a major forms vendor is selling the "revised" HUD booklet to financial institutions. I am trying to get a copy of one to see what the heck they are selling.
Has anyone been contacted by a forms vendor aggressively pushing you to buy the "revised" HUD booklet now?
Has anyone been contacted by a forms vendor aggressively pushing you to buy the "revised" HUD booklet now?
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/10/09 11:23 PM
There is a vendor out there encouraging you to pre-order the booklets from them since they will fill order requests on a first come first serve basis once HUD releases the new booklet.
Posted By: Princess Romeo
Re: RESPA changes 1-1-10 - 12/10/09 11:46 PM
Well a client says they just RECEIVED the "revised" booklets and so they threw out all of the "outdated" 1997 booklets!
Posted By: ahou
Re: RESPA changes 1-1-10 - 12/10/09 11:48 PM
The loan officer misquoted (understated) the processing fee on the GFE - quoted $200, should be $250. Do we show $100 on the comparison chart in both the GFE column and the HUD-1 column because it is a zero tolerance charge?
Posted By: ahou
Re: RESPA changes 1-1-10 - 12/11/09 01:31 PM
The loan officer misquoted (understated) the processing fee on the GFE - quoted $200, should be $250. Do we show $200 on the comparison chart in both the GFE column and the HUD-1 column because it is a zero tolerance charge?
Posted By: travelgirl
Re: RESPA changes 1-1-10 - 12/11/09 02:54 PM
you can download a copy of the old booklet from the HUD website to use until new ones are available...if you need some in the interim...just go print some out.
Posted By: QCL
Re: RESPA changes 1-1-10 - 12/11/09 03:05 PM
Originally Posted By: Jerod Moyer
You can select the provider for them. Please note Appendix C of the regulation:
There is a 10 percent tolerance applied to the sum of the prices of each service listed in Block 3, Block 4, Block 5, Block 6, and Block 7, where the loan originator requires the use of a particular provider or the borrower uses a provider selected or identified by the loan originator. Any services in Block 4, Block 5, or Block 6 for which the borrower selects a provider other than one identified by the loan originator are not subject to any tolerance and, at settlement, would not be included in the sum of the charges on which the 10 percent tolerance is based. Where a loan originator permits a borrower to shop for third party settlement services, the loan originator must provide the borrower with a written list of settlement services providers at the time of the GFE, on a separate sheet of paper.
There is a 10 percent tolerance applied to the sum of the prices of each service listed in Block 3, Block 4, Block 5, Block 6, and Block 7, where the loan originator requires the use of a particular provider or the borrower uses a provider selected or identified by the loan originator. Any services in Block 4, Block 5, or Block 6 for which the borrower selects a provider other than one identified by the loan originator are not subject to any tolerance and, at settlement, would not be included in the sum of the charges on which the 10 percent tolerance is based. Where a loan originator permits a borrower to shop for third party settlement services, the loan originator must provide the borrower with a written list of settlement services providers at the time of the GFE, on a separate sheet of paper.
I have what I think is an odd twist to this:
Loan officer just asked if we list the total for title services in box 4, must we also list this in box 6, since it would be a required service that the borrower can shop for?
{I guess we're going to let the borrower shop for it. That's a whole 'nother question...}
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/11/09 03:10 PM
No. You don't double list fees. If they go in Block 4 and you allow the borrower to shop, you give them a list of Recommended Providers. If you don't let them shop, just pick a provider.
Posted By: ahou
Re: RESPA changes 1-1-10 - 12/11/09 03:35 PM
If the bank understates a fee that is part of the origination fee on the GFE - $100, should be $50. Do we show $100 on the comparison chart in both the GFE column and the HUD-1 column because it is a zero tolerance charge or do we have to show $100 in the GFE column and the $50 in the HUD-1 column with a $50 lender credit (POC) on line 808?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/11/09 03:39 PM
Whatever was listed on the GFE is listed in the GFE column of the Comparison Chart. Since this is a 0% tolerance, you can't charge the borrower more. Therefore, the underestimated amount is listed in the HUD-1/1A column of the tolerance table. Then you'll list the lender eating it (POC) in the 800s.
Posted By: ahou
Re: RESPA changes 1-1-10 - 12/11/09 03:52 PM
Sometimes when we do the HUD, we haven't rec'd a billing for the abstract & clerk of court. After closing, when we receive these bills and the fee is more than indicated on the HUD, but within the 10% tolerance, do we have to send a revised HUD? Since the difference in the fees is within the tolerance, can we collect the difference from the customer?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/11/09 04:05 PM
The HUD is supposed to be exact. If you don't know what the exact $ is, you can use an average charge.
Let's assume you know at the time of closing the fee: If the fee is more, but within the tolerance, you charge the borrower the actual fee.
Let's assume you know at the time of closing the fee: If the fee is more, but within the tolerance, you charge the borrower the actual fee.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/11/09 04:37 PM
For my daily Owners Title Insurance rant/question:
If the borrower comes to you with a sales contract, and said contract contains the provision that the seller is selecting and paying for the OTI, then would you still be required to list ot on the GFE since it is clearly outlined in the sales contratc the the custoemr will not be responsible for it?
If the borrower comes to you with a sales contract, and said contract contains the provision that the seller is selecting and paying for the OTI, then would you still be required to list ot on the GFE since it is clearly outlined in the sales contratc the the custoemr will not be responsible for it?
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 12/11/09 04:45 PM
I'm getting questions about abstracts here....since the abstract fee is based on how many pages the abstract company adds (or so i hear) how is this going to be known at time of application? i assume this fee would go in either block 3 or 6 depending on whether we let them shop for it? and since the range of prices can vary greatly it sounds like from case to case, do we just shoot really high on the GFE? sorry, i'm pretty new at all this and i don't understand this one...
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/11/09 04:50 PM
JJ-Unfortunately, HUD could care less about any seller paids spelled out in the contract. As I read it, they must be disclosed on the GFE.
Posted By: Jerod Moyer
Re: RESPA changes 1-1-10 - 12/11/09 05:20 PM
From the 11/19 FAQ, GFE Seller Paid #2:
RESPA requires that only the borrower receive a GFE. The GFE is defined as an estimate of settlement charges a borrower is likely to incur in connection with the settlement. Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—do not have to be included on the GFE. However;
If the borrower typically would incur charges for title services and lender’s and owner’s title insurance, the GFE instructions make it clear that those charges are required to be listed regardless of whether, for example, the contract (AKA Purchase Agreement) requires the seller to pay for the service. [further illustrated by RESPA FAQ – GFE Block 5 #2]
RESPA requires that only the borrower receive a GFE. The GFE is defined as an estimate of settlement charges a borrower is likely to incur in connection with the settlement. Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—do not have to be included on the GFE. However;
If the borrower typically would incur charges for title services and lender’s and owner’s title insurance, the GFE instructions make it clear that those charges are required to be listed regardless of whether, for example, the contract (AKA Purchase Agreement) requires the seller to pay for the service. [further illustrated by RESPA FAQ – GFE Block 5 #2]
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/11/09 06:00 PM
ugh.. I even have that part highlighted.... thanks Captain Buzzkill...
They have something against the title compnaies here, don't they?
They have something against the title compnaies here, don't they?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/11/09 06:06 PM
pats JJ on the head and slips a sedative into his water... There there, Jay, the rest of us Wisconsinites are just grinning and bearing it. It's time to let go of this one.... come on, you can do it!
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/11/09 06:09 PM
These rules havemade me the single most hated person in the bank... I am being shunned worse than the arts and crafts department!
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/11/09 06:13 PM
Ah but read this thread. If I'm reading it correctly, that's going to give us a big break in the 10% tolerance box. (Someone please correct me if I'm wrong.) They may like you better than glue real soon.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/11/09 06:17 PM
I have my first "official" training today. Processing and Underwriting sat in on a webinar the other day, but I am doing one today for Closing and my Initial Disclosure people at 2,then my first group of LO's Monday morning.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/11/09 06:25 PM
My formal recommendations for compliance:
Discontinue all consumer purpose lending, and focus on owner-occupied commercial lending only.
Yeah!! Now onto Reg E!
Discontinue all consumer purpose lending, and focus on owner-occupied commercial lending only.
Yeah!! Now onto Reg E!
Posted By: FABCompliance
Re: RESPA changes 1-1-10 - 12/11/09 08:48 PM
Quick question- whats everyone doing to comply with completing Page 3 of the settlement statement for the comparison of GFE and HUD charges. The instructions indicate the loan terms section must be completed in accordance with the information and instructions provided by the lender. The lender must provide this information in a format that permits the settlement agent to simply enter the necessary information in the appropriate spaces, without the settlement agent having to refer to the loan documents themselves.... so what's everyone providing to the title companies to complete this?
Posted By: ForceFull1
Re: RESPA changes 1-1-10 - 12/11/09 08:49 PM
Word of warning to both Laser Pro and Encompass users:
Both systems have Block 4 (title services) falling into the 10% tolerance group REGARDLESS OF WHETHER OR NOT THE CUSTOMER SELECTS A PROVIDER NOT ON THE LENDER'S PROVIDER LIST. I can't get a straight answer out of either company as to why they did this as it's pretty black and white in the reg and especially on page 3 of the GFE that these fees have no tolerance assigned if the provider chosen is not on the lender's list.
Harland tells me Laser Pro has a request for an "enhancement" to the system to correct this flaw, but it isn't considered "critical" so it might be awhile. I haven't heard anything back from Ellie Mae yet.
::sigh::
Both systems have Block 4 (title services) falling into the 10% tolerance group REGARDLESS OF WHETHER OR NOT THE CUSTOMER SELECTS A PROVIDER NOT ON THE LENDER'S PROVIDER LIST. I can't get a straight answer out of either company as to why they did this as it's pretty black and white in the reg and especially on page 3 of the GFE that these fees have no tolerance assigned if the provider chosen is not on the lender's list.
Harland tells me Laser Pro has a request for an "enhancement" to the system to correct this flaw, but it isn't considered "critical" so it might be awhile. I haven't heard anything back from Ellie Mae yet.
::sigh::
Posted By: MyKidsMom
Re: RESPA changes 1-1-10 - 12/11/09 09:04 PM
Originally Posted By: QueenChop'dLiver
Originally Posted By: Jerod Moyer
You can select the provider for them. Please note Appendix C of the regulation:
There is a 10 percent tolerance applied to the sum of the prices of each service listed in Block 3, Block 4, Block 5, Block 6, and Block 7, where the loan originator requires the use of a particular provider or the borrower uses a provider selected or identified by the loan originator. Any services in Block 4, Block 5, or Block 6 for which the borrower selects a provider other than one identified by the loan originator are not subject to any tolerance and, at settlement, would not be included in the sum of the charges on which the 10 percent tolerance is based. Where a loan originator permits a borrower to shop for third party settlement services, the loan originator must provide the borrower with a written list of settlement services providers at the time of the GFE, on a separate sheet of paper.
There is a 10 percent tolerance applied to the sum of the prices of each service listed in Block 3, Block 4, Block 5, Block 6, and Block 7, where the loan originator requires the use of a particular provider or the borrower uses a provider selected or identified by the loan originator. Any services in Block 4, Block 5, or Block 6 for which the borrower selects a provider other than one identified by the loan originator are not subject to any tolerance and, at settlement, would not be included in the sum of the charges on which the 10 percent tolerance is based. Where a loan originator permits a borrower to shop for third party settlement services, the loan originator must provide the borrower with a written list of settlement services providers at the time of the GFE, on a separate sheet of paper.
I have what I think is an odd twist to this:
Loan officer just asked if we list the total for title services in box 4, must we also list this in box 6, since it would be a required service that the borrower can shop for?
{I guess we're going to let the borrower shop for it. That's a whole 'nother question...}
I was wondering about this too, Queen.. We don't care which title company they use but I didn't see where that block disclosd that they could shop for it. If we provide a list, then its 10% tolerance if they pick someone on the list, if they don't, the unlimited tolerance???
I'm sure this has been clarified but is the tolerance for each block #, line item or 4,5,6 in aggregate??
Posted By: Ninky
Re: RESPA changes 1-1-10 - 12/11/09 09:11 PM
Our vendor has a system glitch that will not allow our fees to flow to a HUD1A for our home equity loans. Normally the disbursements to their various creditors goes in section M.Disbursements to others. We are being forced to use the full HUD1 until our vendor resolves the problem. Where will these disbursements be itemized on a HUD1? Do they go on lines 204 - 209? I know you can add lines, but some of these loans have 10 - 15 creditors listed with amounts. Can we add a second sheet as an addendum and what do we call it? Addendum to amounts paid in behalf of borrower?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/11/09 09:18 PM
Yes - in aggregate for the 10% items. This would include Block #3 too.
Posted By: BFaith
Re: RESPA changes 1-1-10 - 12/11/09 09:35 PM
Originally Posted By: ForceFull1
Word of warning to both Laser Pro and Encompass users:
Both systems have Block 4 (title services) falling into the 10% tolerance group REGARDLESS OF WHETHER OR NOT THE CUSTOMER SELECTS A PROVIDER NOT ON THE LENDER'S PROVIDER LIST. I can't get a straight answer out of either company as to why they did this as it's pretty black and white in the reg and especially on page 3 of the GFE that these fees have no tolerance assigned if the provider chosen is not on the lender's list.
Harland tells me Laser Pro has a request for an "enhancement" to the system to correct this flaw, but it isn't considered "critical" so it might be awhile. I haven't heard anything back from Ellie Mae yet.
::sigh::
Both systems have Block 4 (title services) falling into the 10% tolerance group REGARDLESS OF WHETHER OR NOT THE CUSTOMER SELECTS A PROVIDER NOT ON THE LENDER'S PROVIDER LIST. I can't get a straight answer out of either company as to why they did this as it's pretty black and white in the reg and especially on page 3 of the GFE that these fees have no tolerance assigned if the provider chosen is not on the lender's list.
Harland tells me Laser Pro has a request for an "enhancement" to the system to correct this flaw, but it isn't considered "critical" so it might be awhile. I haven't heard anything back from Ellie Mae yet.
::sigh::
Hmm, I just attended an Encompass training and they specifically said if you check the box in the "B" column next to the title fees, it will take it out of the 10% tolerance bucket. That's what the "B" column is there for. However, we aren't upgraded to 360 yet so I haven't been able to check for myself if this works or not
Posted By: ForceFull1
Re: RESPA changes 1-1-10 - 12/11/09 09:42 PM
Originally Posted By: BFaith
Hmm, I just attended an Encompass training and they specifically said if you check the box in the "B" column next to the title fees, it will take it out of the 10% tolerance bucket. That's what the "B" column is there for. However, we aren't upgraded to 360 yet so I haven't been able to check for myself if this works or not
That option is not available for Block 4, at least according to page 22 of their self-study guide. Very weird that they said it was available. I am also in the same boat with not being upgraded. I'll cross my fingers that it is available next week when we've upgraded.
Posted By: complyshy
Re: RESPA changes 1-1-10 - 12/11/09 09:58 PM
Summary of your loan section includes the question "Even if you make payments on time, can you monthly amount owed for principal, interest, and any MI rise?
I understand that this is directed at negative amortization however the payment of an ARM will rise even if you make payement on time. How are we to calculate the "maximum it can ever rise to"? Use the life time cap rate and the initial amount of the loan? Project the balance assuming the maximum per change increase until the life time cap is reached?
FAQ's offer no help and of course the Instructions are silent in regards to ARM. Any insights are GREATLY appreciated!
I understand that this is directed at negative amortization however the payment of an ARM will rise even if you make payement on time. How are we to calculate the "maximum it can ever rise to"? Use the life time cap rate and the initial amount of the loan? Project the balance assuming the maximum per change increase until the life time cap is reached?
FAQ's offer no help and of course the Instructions are silent in regards to ARM. Any insights are GREATLY appreciated!
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/11/09 10:07 PM
Great... our LOS upgrades which were released this week are all fubared... just recieved word they hope to have things, such as basic addition, corrected mosy likely by the 22nd... at the earliest.
anyone else considering completing GFE's by hand on January 2nd?
anyone else considering completing GFE's by hand on January 2nd?
Posted By: QCL
Re: RESPA changes 1-1-10 - 12/11/09 11:21 PM
Us too.
We're switching LOS, but conversion won't be done until Feb.
All we can do is pray that is is all perfect on the 22nd. I have a Loan officer that is on the verge of a breakdown from this.
We're switching LOS, but conversion won't be done until Feb.
All we can do is pray that is is all perfect on the 22nd. I have a Loan officer that is on the verge of a breakdown from this.
Posted By: QCL
Re: RESPA changes 1-1-10 - 12/11/09 11:26 PM
Originally Posted By: Just Jay
For my daily Owners Title Insurance rant/question:
If the borrower comes to you with a sales contract, and said contract contains the provision that the seller is selecting and paying for the OTI, then would you still be required to list ot on the GFE since it is clearly outlined in the sales contratc the the custoemr will not be responsible for it?
If the borrower comes to you with a sales contract, and said contract contains the provision that the seller is selecting and paying for the OTI, then would you still be required to list ot on the GFE since it is clearly outlined in the sales contratc the the custoemr will not be responsible for it?
I got an email from HUD. Want me to forward it to you?
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/12/09 04:02 PM
Originally Posted By: FABCompliance
Quick question- whats everyone doing to comply with completing Page 3 of the settlement statement for the comparison of GFE and HUD charges. The instructions indicate the loan terms section must be completed in accordance with the information and instructions provided by the lender. The lender must provide this information in a format that permits the settlement agent to simply enter the necessary information in the appropriate spaces, without the settlement agent having to refer to the loan documents themselves.... so what's everyone providing to the title companies to complete this?
We are going to complete a settlement statement and send with the docs. We are also for a time being going to review all settlement statements before the loan closes to make sure they are correct.
Anybody else know what they are sending to the closing agents to complete the settlement statement?
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/12/09 04:10 PM
Originally Posted By: Just Jay
These rules havemade me the single most hated person in the bank... I am being shunned worse than the arts and crafts department!
I hardly believe that one JJ.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 12/12/09 07:45 PM
Originally Posted By: pjs
Originally Posted By: FABCompliance
Quick question- whats everyone doing to comply with completing Page 3 of the settlement statement for the comparison of GFE and HUD charges. The instructions indicate the loan terms section must be completed in accordance with the information and instructions provided by the lender. The lender must provide this information in a format that permits the settlement agent to simply enter the necessary information in the appropriate spaces, without the settlement agent having to refer to the loan documents themselves.... so what's everyone providing to the title companies to complete this?
We are going to complete a settlement statement and send with the docs. We are also for a time being going to review all settlement statements before the loan closes to make sure they are correct.
Anybody else know what they are sending to the closing agents to complete the settlement statement?
We are thinking of doing the same thing but just page three (minus the HUD fees). We always approve the HUD prior to closing so that part won't be a change for us.
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 12/14/09 12:17 PM
Originally Posted By: Just Jay
Great... our LOS upgrades which were released this week are all fubared... just recieved word they hope to have things, such as basic addition, corrected mosy likely by the 22nd... at the earliest.
anyone else considering completing GFE's by hand on January 2nd?
anyone else considering completing GFE's by hand on January 2nd?
Hey! You have your upgrade to test! We won't have anything until Friday night - MAYBE! So right now, we're planning on doing them by hand.
I'm working on an excel format to reduce the pain
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/14/09 01:36 PM
respa queen, my IT people are working on the double back-up with our (your & my) provider. I'm on vacation this week but we met on Friday to make sure things keep going while I'm gone so we can install and test next Monday.
That excel program would make a fabulous Christmas present for the rest of us...if you don't mind sharing.
That excel program would make a fabulous Christmas present for the rest of us...if you don't mind sharing.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/14/09 02:50 PM
Originally Posted By: respa queen
Originally Posted By: Just Jay
Great... our LOS upgrades which were released this week are all fubared... just recieved word they hope to have things, such as basic addition, corrected mosy likely by the 22nd... at the earliest.
anyone else considering completing GFE's by hand on January 2nd?
anyone else considering completing GFE's by hand on January 2nd?
Hey! You have your upgrade to test! We won't have anything until Friday night - MAYBE! So right now, we're planning on doing them by hand.
I'm working on an excel format to reduce the pain
Testing is pointless right now... screens are still in 'draft' mode, and the forms cannot even handle basic addition... not mapping issues, but literally are not summing correctly
Posted By: BFaith
Re: RESPA changes 1-1-10 - 12/14/09 02:53 PM
Originally Posted By: ForceFull1
Originally Posted By: BFaith
Hmm, I just attended an Encompass training and they specifically said if you check the box in the "B" column next to the title fees, it will take it out of the 10% tolerance bucket. That's what the "B" column is there for. However, we aren't upgraded to 360 yet so I haven't been able to check for myself if this works or not
That option is not available for Block 4, at least according to page 22 of their self-study guide. Very weird that they said it was available. I am also in the same boat with not being upgraded. I'll cross my fingers that it is available next week when we've upgraded.
We just got upgraded this weekend and that option is available. Now, whether it actually works or not I have yet to find out
Posted By: QCL
Re: RESPA changes 1-1-10 - 12/14/09 03:07 PM
No upgrade of any sort for us until the 22nd. Off to find the blank GFE and HUDs. Bah humbug.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/14/09 03:19 PM
Originally Posted By: QueenChop'dLiver
Originally Posted By: Just Jay
For my daily Owners Title Insurance rant/question:
If the borrower comes to you with a sales contract, and said contract contains the provision that the seller is selecting and paying for the OTI, then would you still be required to list ot on the GFE since it is clearly outlined in the sales contratc the the custoemr will not be responsible for it?
If the borrower comes to you with a sales contract, and said contract contains the provision that the seller is selecting and paying for the OTI, then would you still be required to list ot on the GFE since it is clearly outlined in the sales contratc the the custoemr will not be responsible for it?
I got an email from HUD. Want me to forward it to you?
sure, although I am guessing what it says already... tough nuggies.
Posted By: swiggles
Re: RESPA changes 1-1-10 - 12/14/09 04:03 PM
I apologize if this has already been asked. I have new surprising revelations daily. If we never ever charge anyone for a credit report, do we have to disclose the fee we pay and then provide a credit on the settlement statement?
And if so, does that mean that our days of using the HUD1-A are over because the A has no credit lines to use?
And if so, does that mean that our days of using the HUD1-A are over because the A has no credit lines to use?
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 12/14/09 04:12 PM
Originally Posted By: Truffle Royale
respa queen, my IT people are working on the double back-up with our (your & my) provider. I'm on vacation this week but we met on Friday to make sure things keep going while I'm gone so we can install and test next Monday.
That excel program would make a fabulous Christmas present for the rest of us...if you don't mind sharing.
That excel program would make a fabulous Christmas present for the rest of us...if you don't mind sharing.
Still working on it...I'm struggling with the MI part now and getting the monthly premium correct (excel automatically calculates the premium based on the loan parameters)
I haven't decided if I want it to calculate the property tax escrows or not because of the number of counties and tax cycles we have.
Posted By: Princess Romeo
Re: RESPA changes 1-1-10 - 12/14/09 06:22 PM
How about everyone complete the GFE and HUD-1 by hand - in crayon. Be sure to send a copy to HUD
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/14/09 07:30 PM
We have our new release for RESPA and HUD but do not know when they will decide to update it.
Posted By: swiggles
Re: RESPA changes 1-1-10 - 12/14/09 08:22 PM
Originally Posted By: swiggles
I apologize if this has already been asked. I have new surprising revelations daily. If we never ever charge anyone for a credit report, do we have to disclose the fee we pay and then provide a credit on the settlement statement?
And if so, does that mean that our days of using the HUD1-A are over because the A has no credit lines to use?
And if so, does that mean that our days of using the HUD1-A are over because the A has no credit lines to use?
Am I correct in my assessment above?
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/14/09 08:41 PM
The credit report fee would be disclosed on line 805 of the HUD. You can, on the HUD show it as POC/Lender.
Posted By: Sheldon Hendrix
Re: RESPA changes 1-1-10 - 12/14/09 09:41 PM
Seen this in my ABA Mortgage Bulletin today:
ALTA RELEASES “UNIFORM HUD-1 INSTRUCTIONS”
The American Land Title Association (ALTA) released a form entitled “Uniform Supplemental HUD-1/1A Instructions,” meant to standardize communications between lenders and settlement closing professionals under the new RESPA regulatory regime. These instructions are intended to be provided by the lender to the closing attorney, to facilitate the completion of applicable portions of the HUD-1/1A Settlement Statement.
The form released by ALTA was prepared by settlement professionals, and is meant as an optional form that banks can choose to use to ensure proper and uniform coordination across all jurisdictions. This optional form can serve as a valuable tool to ensure the conciliation required between the new GFE and the closing table figures under RESPA’s new cost tolerance rules.
The ALTA form may be accessed here: http://www.aba.com/aba/documents/news/ALTAUniform2010.pdf
Looks like a pretty decent form for communicating with the title companies, but seems like it would be a lot of work for our staff to fill out.
ALTA RELEASES “UNIFORM HUD-1 INSTRUCTIONS”
The American Land Title Association (ALTA) released a form entitled “Uniform Supplemental HUD-1/1A Instructions,” meant to standardize communications between lenders and settlement closing professionals under the new RESPA regulatory regime. These instructions are intended to be provided by the lender to the closing attorney, to facilitate the completion of applicable portions of the HUD-1/1A Settlement Statement.
The form released by ALTA was prepared by settlement professionals, and is meant as an optional form that banks can choose to use to ensure proper and uniform coordination across all jurisdictions. This optional form can serve as a valuable tool to ensure the conciliation required between the new GFE and the closing table figures under RESPA’s new cost tolerance rules.
The ALTA form may be accessed here: http://www.aba.com/aba/documents/news/ALTAUniform2010.pdf
Looks like a pretty decent form for communicating with the title companies, but seems like it would be a lot of work for our staff to fill out.
Posted By: bigdog
Re: RESPA changes 1-1-10 - 12/14/09 10:05 PM
The Chicago FDIC issued their version of an FIl in 2005. This stated that taxes must be disclosed on the GFE and HUD and either paid or shown as POC. This interpretation was noted by the FDIC in CHIRO-14-2005. Once upon a time they were uasing this as they were examining banks.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/14/09 10:09 PM
Originally Posted By: bigdog
The Chicago FDIC issued their version of an FIl in 2005. This stated that taxes must be disclosed on the GFE and HUD and either paid or shown as POC. This interpretation was noted by the FDIC in CHIRO-14-2005. Once upon a time they were uasing this as they were examining banks.
That was before the RESPA revisions. Taxes are no longer required to be on either the GFE or Settlement Statement.
Posted By: river girl
Re: RESPA changes 1-1-10 - 12/14/09 10:13 PM
I read through the postings and didn't see this answered so...
FOr our purchase loans, the seller chooses the title inssurance and escrow closer.
On the GFE, do I list a fee in block 4: Title Services and l;ener's title insurance or do I put these fees in block 6: required services that you can shop for and then provide a list of providers?
Neither the lender nor the borrower are selecting so I'm not sure which area to list the fees in. If it is block 6, do I separate the fees out into title insurance and settlement agent fee? They are always the same place and would be combined if listed in block 4.
FOr our purchase loans, the seller chooses the title inssurance and escrow closer.
On the GFE, do I list a fee in block 4: Title Services and l;ener's title insurance or do I put these fees in block 6: required services that you can shop for and then provide a list of providers?
Neither the lender nor the borrower are selecting so I'm not sure which area to list the fees in. If it is block 6, do I separate the fees out into title insurance and settlement agent fee? They are always the same place and would be combined if listed in block 4.
Posted By: Princess Romeo
Re: RESPA changes 1-1-10 - 12/14/09 10:25 PM
In "theory" your borrower is allowed to shop for title and settlement services even though he or she is being strong-armed into letting the seller choose it. You would list the title and settlement fees in Block 4 and provide a list of at least one title provider and one settlement provider.
I don't know why HUD had to muddy the water and not add the verbiage "that you can shop for" for the Block 4 services.
Block 6 is for settlement services OTHER than Title, settlement, homeowners insurance, and those service providers you require such as credit report, appraisal, tax service, and flood hazard. So really, what is left for Block 6 - Pest Inspection?
Seriously.....
I don't know why HUD had to muddy the water and not add the verbiage "that you can shop for" for the Block 4 services.
Block 6 is for settlement services OTHER than Title, settlement, homeowners insurance, and those service providers you require such as credit report, appraisal, tax service, and flood hazard. So really, what is left for Block 6 - Pest Inspection?
Seriously.....
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/15/09 12:39 PM
Originally Posted By: Compliance Rules
Seen this in my ABA Mortgage Bulletin today:
ALTA RELEASES “UNIFORM HUD-1 INSTRUCTIONS”
The American Land Title Association (ALTA) released a form entitled “Uniform Supplemental HUD-1/1A Instructions,” meant to standardize communications between lenders and settlement closing professionals under the new RESPA regulatory regime. These instructions are intended to be provided by the lender to the closing attorney, to facilitate the completion of applicable portions of the HUD-1/1A Settlement Statement.
The form released by ALTA was prepared by settlement professionals, and is meant as an optional form that banks can choose to use to ensure proper and uniform coordination across all jurisdictions. This optional form can serve as a valuable tool to ensure the conciliation required between the new GFE and the closing table figures under RESPA’s new cost tolerance rules.
The ALTA form may be accessed here: http://www.aba.com/aba/documents/news/ALTAUniform2010.pdf
Looks like a pretty decent form for communicating with the title companies, but seems like it would be a lot of work for our staff to fill out.
ALTA RELEASES “UNIFORM HUD-1 INSTRUCTIONS”
The American Land Title Association (ALTA) released a form entitled “Uniform Supplemental HUD-1/1A Instructions,” meant to standardize communications between lenders and settlement closing professionals under the new RESPA regulatory regime. These instructions are intended to be provided by the lender to the closing attorney, to facilitate the completion of applicable portions of the HUD-1/1A Settlement Statement.
The form released by ALTA was prepared by settlement professionals, and is meant as an optional form that banks can choose to use to ensure proper and uniform coordination across all jurisdictions. This optional form can serve as a valuable tool to ensure the conciliation required between the new GFE and the closing table figures under RESPA’s new cost tolerance rules.
The ALTA form may be accessed here: http://www.aba.com/aba/documents/news/ALTAUniform2010.pdf
Looks like a pretty decent form for communicating with the title companies, but seems like it would be a lot of work for our staff to fill out.
Wouldn't filling out a HUD-1 be simpler? Just asking.
Posted By: bigdog
Re: RESPA changes 1-1-10 - 12/15/09 03:39 PM
Wasn't that the whole point RESPA never required them to be on hud or GFE but FDIC in Chicago interperted HUD's regulation for them and decided they should be? Clear as mud as always. Have a good day and a Merry Christmas
Posted By: questioning
Re: RESPA changes 1-1-10 - 12/15/09 03:52 PM
Under the current RESPA rules, our bank provides the customer a Controlled Business Arrangement Disclosure when we require lender's title insurance because the bank has an affliate relationship with a title company.
Under the new RESPA rules, there is a requirement to disclose Owners Title Insurance for any purchases. In those cases, should we also give the Controlled Business Arr. Disclosure to let the customer know that the owner's quote is based on the costs from our affliate company? Or because it's only owner's title insurance and not lender's, is this exempt from that disclosure?
Under the new RESPA rules, there is a requirement to disclose Owners Title Insurance for any purchases. In those cases, should we also give the Controlled Business Arr. Disclosure to let the customer know that the owner's quote is based on the costs from our affliate company? Or because it's only owner's title insurance and not lender's, is this exempt from that disclosure?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/15/09 03:59 PM
The CBA Disclosure was eliminated years ago. If you're recommending an affiliate, you must provide an Affiliate Business Arrangement Disclosure. It is not exempt.
Posted By: Dani York, CRCM
Re: RESPA changes 1-1-10 - 12/15/09 04:31 PM
Forgive me if this has been asked already or if it is elementary, but I haven't found it in any searches and am having a time figuring it out...
On the new GFE, under "Summary of your loan", the question "Even if you make payments on time, can your monthly amount owed for principal, interest, and any mortgage insurance rise?", how would you disclose an interest only payment that is tied to a variable rate (WSJ Prime) that can change daily? I've figured out the maximum amount (use the ceiling rate), but how would I figure a dollar amount on the first increase? Use the same ceiling rate? And would I disclose it as able to change in 1 day? (This is for our construction loans where title is transferring to the first user.)
Thanks so much for your help....just got back into the compliance game this month.
On the new GFE, under "Summary of your loan", the question "Even if you make payments on time, can your monthly amount owed for principal, interest, and any mortgage insurance rise?", how would you disclose an interest only payment that is tied to a variable rate (WSJ Prime) that can change daily? I've figured out the maximum amount (use the ceiling rate), but how would I figure a dollar amount on the first increase? Use the same ceiling rate? And would I disclose it as able to change in 1 day? (This is for our construction loans where title is transferring to the first user.)
Thanks so much for your help....just got back into the compliance game this month.
Posted By: questioning
Re: RESPA changes 1-1-10 - 12/15/09 06:00 PM
Do we then have to provide a Recommended Provider list of title companies from which they can shop? We are choosing all other providers so we do not have a Provider list for any other services.
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 12/15/09 06:06 PM
In a training today, heard from a big local title company owner that realtors are VERY concerned about making sure they get on the new provider lists that we have to give with the GFE. Okay - just to make sure I haven't missed a requirement - we are NOT supposed to put realtors on that recommended provider list, correct?!
Okay - just to make sure I haven't missed a requirement - we are NOT supposed to put realtors on that recommended provider list, correct?!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/15/09 06:29 PM
Originally Posted By: FlamingoGal
In a training today, heard from a big local title company owner that realtors are VERY concerned about making sure they get on the new provider lists that we have to give with the GFE. Okay - just to make sure I haven't missed a requirement - we are NOT supposed to put realtors on that recommended provider list, correct?!
Okay - just to make sure I haven't missed a requirement - we are NOT supposed to put realtors on that recommended provider list, correct?! Correct. Only service providers from Block 4-6 of the GFE.
Posted By: Dani York, CRCM
Re: RESPA changes 1-1-10 - 12/15/09 07:36 PM
Originally Posted By: Dani York
Forgive me if this has been asked already or if it is elementary, but I haven't found it in any searches and am having a time figuring it out...
On the new GFE, under "Summary of your loan", the question "Even if you make payments on time, can your monthly amount owed for principal, interest, and any mortgage insurance rise?", how would you disclose an interest only payment that is tied to a variable rate (WSJ Prime) that can change daily? I've figured out the maximum amount (use the ceiling rate), but how would I figure a dollar amount on the first increase? Use the same ceiling rate? And would I disclose it as able to change in 1 day? (This is for our construction loans where title is transferring to the first user.)
Thanks so much for your help....just got back into the compliance game this month.
On the new GFE, under "Summary of your loan", the question "Even if you make payments on time, can your monthly amount owed for principal, interest, and any mortgage insurance rise?", how would you disclose an interest only payment that is tied to a variable rate (WSJ Prime) that can change daily? I've figured out the maximum amount (use the ceiling rate), but how would I figure a dollar amount on the first increase? Use the same ceiling rate? And would I disclose it as able to change in 1 day? (This is for our construction loans where title is transferring to the first user.)
Thanks so much for your help....just got back into the compliance game this month.
bump
Posted By: BNKO
Re: RESPA changes 1-1-10 - 12/15/09 08:10 PM
Has the settlement cost booklet been updated yet? Where would I find this on the HUD website? I've searched and searched and can't even find the old one!
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/15/09 08:36 PM
During a 12/7 HUD webcast about RESPA, HUD stated that they thought that the new booklet might be released today (12/15). I've checked their website a few times today and don't see it.
The last page of the 11/19 RESPA FAQs states that the revised booklet would be posted on HUD's website and a notice would also be published in the Federal Register.
The current version (6/1997) of the booklet can be accessed from the following web page. http://www.hud.gov/offices/hsg/ramh/res/sfhrestc.cfm
The last page of the 11/19 RESPA FAQs states that the revised booklet would be posted on HUD's website and a notice would also be published in the Federal Register.
The current version (6/1997) of the booklet can be accessed from the following web page. http://www.hud.gov/offices/hsg/ramh/res/sfhrestc.cfm
Posted By: ForceFull1
Re: RESPA changes 1-1-10 - 12/15/09 09:23 PM
Originally Posted By: David Dickinson
Originally Posted By: bigdog
The Chicago FDIC issued their version of an FIl in 2005. This stated that taxes must be disclosed on the GFE and HUD and either paid or shown as POC. This interpretation was noted by the FDIC in CHIRO-14-2005. Once upon a time they were uasing this as they were examining banks.
That was before the RESPA revisions. Taxes are no longer required to be on either the GFE or Settlement Statement.
For what it's worth:
My local FDIC field office (Kansas City region) stated, per a contact they have at HUD, that there should be some congruence between the GFE and the HUD-1 regarding property taxes. If we expect to collect a property tax payment on the HUD-1, it should be listed on the GFE. Conversely, if we don’t anticipate collecting the property taxes, they should not be listed on the GFE. (They should, however, be included as applicable in the escrow section.) So, consequently, going forward, an annual real estate tax amount will not be listed on the GFE. Shifting an anticipated closing date from one month to the next that would necessitate collecting the taxes, where previously they weren’t disclosed, would be a changed circumstance.
So, until we hear otherwise from something more official, it sounds like my offices at least needs to follow the above. (And ask me if I don't think this is going to somehow change in the next few weeks or month.)
Posted By: Oursisnottoreasonwhy
Re: RESPA changes 1-1-10 - 12/15/09 09:24 PM
What kind of "estimates" are we going to be seeing in block 11 - Homeowners Insurance?
Posted By: Dani York, CRCM
Re: RESPA changes 1-1-10 - 12/15/09 09:39 PM
I just spoke with my regulator and he indicated that there may be something coming down theline in March where basically if you require taxes to be paid, you will be required to escrow for the borrower.....
Looks like I get to do some hefty reading up on escrows since we have never done them in the past......
Looks like I get to do some hefty reading up on escrows since we have never done them in the past......
Posted By: Compliance Lover
Re: RESPA changes 1-1-10 - 12/15/09 10:10 PM
I've been searching too for the new (or old even) special information booklet on HUD's website (and I tried the link below too). I still don't see it. Is it in sections? I read where we might be able to order the booklets from the gov't for free too, but haven't found how/where.
Posted By: misha
Re: RESPA changes 1-1-10 - 12/15/09 11:14 PM
Have searched this thread & can't find the answer - for our loans sold in the secondary market, if a borrower doesn't want to escrow, he has to pay an "escrow waiver fee" - guessing this would go in the Origination Charge?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/15/09 11:25 PM
Yep.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/16/09 12:17 AM
Originally Posted By: Compliance Lover
I've been searching too for the new (or old even) special information booklet on HUD's website (and I tried the link below too). I still don't see it. Is it in sections? I read where we might be able to order the booklets from the gov't for free too, but haven't found how/where.
See my post above.
Here's a link to the PDF version of the booklet from 6/1997. http://www.hud.gov/offices/hsg/ramh/res/stcosts.pdf
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/16/09 04:09 PM
Originally Posted By: Just Jay
For my daily Owners Title Insurance rant/question:
If the borrower comes to you with a sales contract, and said contract contains the provision that the seller is selecting and paying for the OTI, then would you still be required to list ot on the GFE since it is clearly outlined in the sales contratc the the custoemr will not be responsible for it?
If the borrower comes to you with a sales contract, and said contract contains the provision that the seller is selecting and paying for the OTI, then would you still be required to list ot on the GFE since it is clearly outlined in the sales contratc the the custoemr will not be responsible for it?
I've been on vacation and am trying to get up to speed on this thread. JJ, since this was directed to me more-or-less, I'll risk it hasn't been answered and let you know...YES...unfortutely sales contract terms carry NO VALUE with HUD. Forget what you contract says the seller will do. OTI has to be quoted regardless of what is customary, what the contract says and who is going to pay it (for a purchase anyway)
Posted By: QCL
Re: RESPA changes 1-1-10 - 12/16/09 04:14 PM
For those that don't venture outside of this thread...I posted this in another thread, but I could use some help.
You may even get a free audit tool out of the deal
We have drafted a fee spreadsheet in excel, to detail different fee types and where they will fall on the GFE, the HUD and if the fee will impact the APR. But I could use a second set of eyes to review the thing.
Anyone interested?
Send me a PM if you would like it. By the way this is QCL.
You may even get a free audit tool out of the deal
We have drafted a fee spreadsheet in excel, to detail different fee types and where they will fall on the GFE, the HUD and if the fee will impact the APR. But I could use a second set of eyes to review the thing.
Anyone interested?
Send me a PM if you would like it. By the way this is QCL.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/16/09 04:22 PM
Originally Posted By: Dani York
Forgive me if this has been asked already or if it is elementary, but I haven't found it in any searches and am having a time figuring it out...
On the new GFE, under "Summary of your loan", the question "Even if you make payments on time, can your monthly amount owed for principal, interest, and any mortgage insurance rise?", how would you disclose an interest only payment that is tied to a variable rate (WSJ Prime) that can change daily? I've figured out the maximum amount (use the ceiling rate), but how would I figure a dollar amount on the first increase? Use the same ceiling rate? And would I disclose it as able to change in 1 day? (This is for our construction loans where title is transferring to the first user.)
Thanks so much for your help....just got back into the compliance game this month.
On the new GFE, under "Summary of your loan", the question "Even if you make payments on time, can your monthly amount owed for principal, interest, and any mortgage insurance rise?", how would you disclose an interest only payment that is tied to a variable rate (WSJ Prime) that can change daily? I've figured out the maximum amount (use the ceiling rate), but how would I figure a dollar amount on the first increase? Use the same ceiling rate? And would I disclose it as able to change in 1 day? (This is for our construction loans where title is transferring to the first user.)
Thanks so much for your help....just got back into the compliance game this month.
We had the same delima. Our decision was to nix VRL on consumer construction that fell under RESPA.
Which was the only category this would have applied to for us.
Posted By: Dani York, CRCM
Re: RESPA changes 1-1-10 - 12/16/09 04:28 PM
Thanks for the help. However, I don't know that management will nix VRL on these loans. If your bank had not nixed the VRL for these, how would you have handled the GFE issues in the summary section?
Thanks!
Thanks!
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/16/09 04:31 PM
Originally Posted By: swiggles
I apologize if this has already been asked. I have new surprising revelations daily. If we never ever charge anyone for a credit report, do we have to disclose the fee we pay and then provide a credit on the settlement statement?
And if so, does that mean that our days of using the HUD1-A are over because the A has no credit lines to use?
And if so, does that mean that our days of using the HUD1-A are over because the A has no credit lines to use?
Swiggles, I didn't see this ever answered. So here goes:
You will have to disclose it (nothing new here) We didn't in the past, but with the new average charges, we feel we won't get away with that any longer. I think our average came out to a whopping $2.07 or something. Anyway, you can't list it as POC, you will have to disclose it in your orig charges on the GFE, then describe it on the HUD, and yes...it will be a credit if you don't intend them to pay it and since you can't show it POC, you won't be able to use a 1A.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/16/09 04:33 PM
Originally Posted By: Dan Persfull
The credit report fee would be disclosed on line 805 of the HUD. You can, on the HUD show it as POC/Lender.
Dan, I have to disagree. You can't show this as POC, you will have to show it and then issue a credit on page one.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/16/09 04:47 PM
Originally Posted By: RR joker
Originally Posted By: Just Jay
For my daily Owners Title Insurance rant/question:
If the borrower comes to you with a sales contract, and said contract contains the provision that the seller is selecting and paying for the OTI, then would you still be required to list ot on the GFE since it is clearly outlined in the sales contratc the the custoemr will not be responsible for it?
If the borrower comes to you with a sales contract, and said contract contains the provision that the seller is selecting and paying for the OTI, then would you still be required to list ot on the GFE since it is clearly outlined in the sales contratc the the custoemr will not be responsible for it?
I've been on vacation and am trying to get up to speed on this thread. JJ, since this was directed to me more-or-less, I'll risk it hasn't been answered and let you know...YES...unfortutely sales contract terms carry NO VALUE with HUD. Forget what you contract says the seller will do. OTI has to be quoted regardless of what is customary, what the contract says and who is going to pay it (for a purchase anyway)
Oh, I am already over that point and moving on, but thanks for answering
But new question/thought:
Many have mentioned on here doing a GFE "summary" if you will, to more accurately reflect the true closing costs (i.e. OTI, taxes, money to close, etc), separate from and in addition to the GFE.
How might this be percived by the examiners, and what can of worms might we be opening if we go down this route?
Posted By: ktac MITCH
Re: RESPA changes 1-1-10 - 12/16/09 04:50 PM
Originally Posted By: RR joker
Originally Posted By: Just Jay
For my daily Owners Title Insurance rant/question:
If the borrower comes to you with a sales contract, and said contract contains the provision that the seller is selecting and paying for the OTI, then would you still be required to list ot on the GFE since it is clearly outlined in the sales contratc the the custoemr will not be responsible for it?
If the borrower comes to you with a sales contract, and said contract contains the provision that the seller is selecting and paying for the OTI, then would you still be required to list ot on the GFE since it is clearly outlined in the sales contratc the the custoemr will not be responsible for it?
Yes you put it there - here is direct quotes from the instructions
“ …charges for third party settlement service providers for all closing services, regardless of whether the providers are selected or paid for by the borrower, seller, or loan originator. ”
“ … include any (lender’s title insurance premiums) / (owner’s title insurance and related endorsements) , when required, regardless of whether the provider is selected or paid for by the borrower, seller, or loan originator. ”
I've been on vacation and am trying to get up to speed on this thread. JJ, since this was directed to me more-or-less, I'll risk it hasn't been answered and let you know...YES...unfortutely sales contract terms carry NO VALUE with HUD. Forget what you contract says the seller will do. OTI has to be quoted regardless of what is customary, what the contract says and who is going to pay it (for a purchase anyway)
Posted By: QCL
Re: RESPA changes 1-1-10 - 12/16/09 04:50 PM
Originally Posted By: Just Jay
Originally Posted By: RR joker
Originally Posted By: Just Jay
For my daily Owners Title Insurance rant/question:
If the borrower comes to you with a sales contract, and said contract contains the provision that the seller is selecting and paying for the OTI, then would you still be required to list ot on the GFE since it is clearly outlined in the sales contratc the the custoemr will not be responsible for it?
If the borrower comes to you with a sales contract, and said contract contains the provision that the seller is selecting and paying for the OTI, then would you still be required to list ot on the GFE since it is clearly outlined in the sales contratc the the custoemr will not be responsible for it?
I've been on vacation and am trying to get up to speed on this thread. JJ, since this was directed to me more-or-less, I'll risk it hasn't been answered and let you know...YES...unfortutely sales contract terms carry NO VALUE with HUD. Forget what you contract says the seller will do. OTI has to be quoted regardless of what is customary, what the contract says and who is going to pay it (for a purchase anyway)
Oh, I am already over that point and moving on, but thanks for answering
But new question/thought:
Many have mentioned on here doing a GFE "summary" if you will, to more accurately reflect the true closing costs (i.e. OTI, taxes, money to close, etc), separate from and in addition to the GFE.
How might this be percived by the examiners, and what can of worms might we be opening if we go down this route?
I'll ask them next month, if they ever get here. (We were postponed until January) We just developed this sort of thing and I think are planning on using it.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/16/09 04:56 PM
We discussed doing so today... more as of an LO tool, but for the customer's benefit as well.
Posted By: nghcompliance
Re: RESPA changes 1-1-10 - 12/16/09 05:16 PM
Can someone tell me which line credit life should be disclosed on the new HUD form?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/16/09 06:15 PM
Quote:
But new question/thought:
Many have mentioned on here doing a GFE "summary" if you will, to more accurately reflect the true closing costs (i.e. OTI, taxes, money to close, etc), separate from and in addition to the GFE.
How might this be percived by the examiners, and what can of worms might we be opening if we go down this route?
Many have mentioned on here doing a GFE "summary" if you will, to more accurately reflect the true closing costs (i.e. OTI, taxes, money to close, etc), separate from and in addition to the GFE.
How might this be percived by the examiners, and what can of worms might we be opening if we go down this route?
fwiw, My examiner (FRB) already suggested completing the itemization of amount financed may be of some use in showing the borrower a more correct summary. We, too, have been inclined to have a "this is this, and here is the real story". I do not see examiner's having an issue with it, so long as the RESPA portion is done as required.
Posted By: Bullseye
Re: RESPA changes 1-1-10 - 12/16/09 08:57 PM
Originally Posted By: misha
Have searched this thread & can't find the answer - for our loans sold in the secondary market, if a borrower doesn't want to escrow, he has to pay an "escrow waiver fee" - guessing this would go in the Origination Charge?
So it goes in Block One. What if they decide later that they do not want to escrow and we haven't disclosed the fee? HUD's powerpoint states that Block One cannot change, even with a changed circumstance. Because this is a BORROWER REQUESTED change, would we be okay to add this fee in and redisclose?
Posted By: CrookedVulture
Re: RESPA changes 1-1-10 - 12/16/09 09:07 PM
We're having the same issue and I can't find a response to your question.
If we include fees (credit report and automated underwriting fee) as part of our $299 application fee, and we disclose the $299 application fee in the origination charges section of the GFE, do we still have to list the individual charges for the credit report and automated underwriting?
Any help would be much appreciated.
If we include fees (credit report and automated underwriting fee) as part of our $299 application fee, and we disclose the $299 application fee in the origination charges section of the GFE, do we still have to list the individual charges for the credit report and automated underwriting?
Any help would be much appreciated.
Posted By: RolTyde
Re: RESPA changes 1-1-10 - 12/16/09 09:17 PM
Just Jay- I listned to HUD's RESPA Plain English webinar today and Vicki Bott, Deputy Asst. Sec of Single Family, said that lenders can give a "fee sheet" but that it can't look like a good faith or be indicated to the borrower as a good faith. This was in response to the problem of giving good faiths and being held to them even on a pre-qualification.
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/17/09 01:03 PM
Anybody hear this and would you know where they got it from:
An Attorney told us yesterday that in his training he was told that an attorney had to do the HUD settlement statement on a refinance. Thanks
An Attorney told us yesterday that in his training he was told that an attorney had to do the HUD settlement statement on a refinance. Thanks
Posted By: Skittles
Re: RESPA changes 1-1-10 - 12/17/09 01:12 PM
I have attended two separate training sessions and this wasn't mentioned. I think he got some bad information.
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/17/09 01:31 PM
Thanks- so do I. I can't find any reference to it in the final rule etc. I'd say he would need to prove it to us.
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 12/17/09 01:51 PM
This might also be a state issue. In New Jersey, for example, by statute, borrowers are permitted to have a title company conduct a closing. An attorney is not required.
Posted By: Bville
Re: RESPA changes 1-1-10 - 12/17/09 02:00 PM
Question 3 in the Block 1 section of HUD's FAQs (page 22 of the 11/19/09 edition)states that "Block 1,'Our origination charge' cannot increase unless there is a 'changed circumstance'...."
Slide 13 states, " Block 1 fees CANNOT change, even with a changed circumstance" (Exception is for an origination charge based on the loan amount and loan amount changes.)
These statements seem to contradict each other. I certainly hope that a changed loan amount is not the only "changed circumstance" that could change the number. Bullseye's example of the borrower deciding not to escrow should allow the addition of the escrow waiver fee. What if the bank finds complications and needs an attorney to help prepare the mortgage? It seems that should be a changed circumstance,too. I'm sure there are many many more examples.
Slide 13 states, " Block 1 fees CANNOT change, even with a changed circumstance" (Exception is for an origination charge based on the loan amount and loan amount changes.)
These statements seem to contradict each other. I certainly hope that a changed loan amount is not the only "changed circumstance" that could change the number. Bullseye's example of the borrower deciding not to escrow should allow the addition of the escrow waiver fee. What if the bank finds complications and needs an attorney to help prepare the mortgage? It seems that should be a changed circumstance,too. I'm sure there are many many more examples.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 12/17/09 02:03 PM
Originally Posted By: pjs
Anybody hear this and would you know where they got it from:
An Attorney told us yesterday that in his training he was told that an attorney had to do the HUD settlement statement on a refinance. Thanks
An Attorney told us yesterday that in his training he was told that an attorney had to do the HUD settlement statement on a refinance. Thanks
PJS,
I would ask him to quote chapter and verse. Especially since we are both in Ohio and I haven't heard this.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/17/09 02:08 PM
Originally Posted By: DD Regs
Originally Posted By: pjs
Anybody hear this and would you know where they got it from:
An Attorney told us yesterday that in his training he was told that an attorney had to do the HUD settlement statement on a refinance. Thanks
An Attorney told us yesterday that in his training he was told that an attorney had to do the HUD settlement statement on a refinance. Thanks
PJS,
I would ask him to quote chapter and verse. Especially since we are both in Ohio and I haven't heard this.
Sounds like a little industry self-churning to me. Ditto DD.
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/17/09 02:15 PM
Originally Posted By: Reads Regs
Originally Posted By: Compliance Lover
I've been searching too for the new (or old even) special information booklet on HUD's website (and I tried the link below too). I still don't see it. Is it in sections? I read where we might be able to order the booklets from the gov't for free too, but haven't found how/where.
See my post above.
Here's a link to the PDF version of the booklet from 6/1997. http://www.hud.gov/offices/hsg/ramh/res/stcosts.pdf
Here is the phone number where you can order the new booklets for free and check to see if they are ready. 1-800-767-7468.
The lady told me to check the first of the new year to see if they are ready. Good luck!
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/17/09 02:17 PM
Originally Posted By: Just Jay
Originally Posted By: DD Regs
Originally Posted By: pjs
Anybody hear this and would you know where they got it from:
An Attorney told us yesterday that in his training he was told that an attorney had to do the HUD settlement statement on a refinance. Thanks
An Attorney told us yesterday that in his training he was told that an attorney had to do the HUD settlement statement on a refinance. Thanks
PJS,
I would ask him to quote chapter and verse. Especially since we are both in Ohio and I haven't heard this.
Sounds like a little industry self-churning to me. Ditto DD.
Thanks DD- I will. I've been busting around reading and I do not find anything. I say let him prove it to me. Thanks
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 12/17/09 02:56 PM
Originally Posted By: pjs
Originally Posted By: Reads Regs
Originally Posted By: Compliance Lover
I've been searching too for the new (or old even) special information booklet on HUD's website (and I tried the link below too). I still don't see it. Is it in sections? I read where we might be able to order the booklets from the gov't for free too, but haven't found how/where.
See my post above.
Here's a link to the PDF version of the booklet from 6/1997. http://www.hud.gov/offices/hsg/ramh/res/stcosts.pdf
Here is the phone number where you can order the new booklets for free and check to see if they are ready. 1-800-767-7468.
The lady told me to check the first of the new year to see if they are ready. Good luck!
IF these books are not available come Jan 1, should we continue to hand out the old ones until they are or should we print off some from the PDF on line to hand out?
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 12/17/09 03:11 PM
The new Settlement Booklet has been posted by HUD.
Posted By: MyKidsMom
Re: RESPA changes 1-1-10 - 12/17/09 03:11 PM
JohnE,
That's how I understand it..
That's how I understand it..
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/17/09 03:24 PM
Originally Posted By: rlcarey
The new Settlement Booklet has been posted by HUD.
Hooray, but I can't find it.
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/17/09 03:27 PM
It's under Shopping for your home loan- The HUD settlement booklet.
The lady from HUD said it is on line and you can print it off. Right now the HUD office does not have the booklets in print as of yet but should be done by the 1st of January 2010.
The lady from HUD said it is on line and you can print it off. Right now the HUD office does not have the booklets in print as of yet but should be done by the 1st of January 2010.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 12/17/09 03:28 PM
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/17/09 03:37 PM
Originally Posted By: Bville
Question 3 in the Block 1 section of HUD's FAQs (page 22 of the 11/19/09 edition)states that "Block 1,'Our origination charge' cannot increase unless there is a 'changed circumstance'...."
Slide 13 states, " Block 1 fees CANNOT change, even with a changed circumstance" (Exception is for an origination charge based on the loan amount and loan amount changes.)
These statements seem to contradict each other. I certainly hope that a changed loan amount is not the only "changed circumstance" that could change the number. Bullseye's example of the borrower deciding not to escrow should allow the addition of the escrow waiver fee. What if the bank finds complications and needs an attorney to help prepare the mortgage? It seems that should be a changed circumstance,too. I'm sure there are many many more examples.
Slide 13 states, " Block 1 fees CANNOT change, even with a changed circumstance" (Exception is for an origination charge based on the loan amount and loan amount changes.)
These statements seem to contradict each other. I certainly hope that a changed loan amount is not the only "changed circumstance" that could change the number. Bullseye's example of the borrower deciding not to escrow should allow the addition of the escrow waiver fee. What if the bank finds complications and needs an attorney to help prepare the mortgage? It seems that should be a changed circumstance,too. I'm sure there are many many more examples.
I agree with you. In fact, the HUD training seemed to contradict several things already published in the regulation and FAQs. For instance, the FAQs say to only list things the borrower is likely/typically to pay. Yet the HUD training said you had to list transfer taxes. I've never seen a borrower pay transfer taxes. I have emailed HUD on this, but it bounced back with a message that their in box was full. I'll keep trying.
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/17/09 03:38 PM
Originally Posted By: rlcarey
Thank you! It's pretty.
Posted By: Rosemarie
Re: RESPA changes 1-1-10 - 12/17/09 03:41 PM
We actually have some cities within our State like Chicago where the Borrower is actually responsible for the Transfer Tax Stamps. We have to be careful because it's not always paid by the Seller.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/17/09 03:45 PM
Then in your case, you should list transfer taxes, but I've never seen it in my area. Why should we list it here?
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 12/17/09 04:19 PM
Originally Posted By: DD Regs
Originally Posted By: pjs
Originally Posted By: Reads Regs
Originally Posted By: Compliance Lover
I've been searching too for the new (or old even) special information booklet on HUD's website (and I tried the link below too). I still don't see it. Is it in sections? I read where we might be able to order the booklets from the gov't for free too, but haven't found how/where.
See my post above.
Here's a link to the PDF version of the booklet from 6/1997. http://www.hud.gov/offices/hsg/ramh/res/stcosts.pdf
Here is the phone number where you can order the new booklets for free and check to see if they are ready. 1-800-767-7468.
The lady told me to check the first of the new year to see if they are ready. Good luck!
IF these books are not available come Jan 1, should we continue to hand out the old ones until they are or should we print off some from the PDF on line to hand out?
I guess I should be more clear, I understand the "new books" are available on line (I have seen the gazillions post in the lending thread announcing it
). What I am asking is since HUD is saying the Hard Copies that you can order are not available until after Jan 1, should we print out the PDF that is on line to hand out to customers. Sorry if my original question wasn't clear enough.
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 12/17/09 04:33 PM
i spoke to a lady from HUD this morning and her statement was that HUD no longer supplied the Hard Copies. I assume we can order them from somebody else or do we just hand customers xeroxed copies of the new form?
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 12/17/09 04:35 PM
I'm guessing that we are free to find anyone who will print them for us. And, since HUD did not give a list of publishers, there will be no 10% tolerance on the cost to print.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 12/17/09 04:42 PM
(I like that Franky)
I just spoke with HUD, and the person told me there would be books later on that could be ordered, but for now we should print out what is available on line.
I just spoke with HUD, and the person told me there would be books later on that could be ordered, but for now we should print out what is available on line.
Posted By: Rosemarie
Re: RESPA changes 1-1-10 - 12/17/09 04:45 PM
We have a source we order booklets from if anyone is interested in just purchasing them from a vendor. My contacts name is Leah and can be reached at 1-866-500-4785 x207973 - this is a compliance forms company.
Posted By: Kash
Re: RESPA changes 1-1-10 - 12/17/09 04:51 PM
I hate to ask this question again but I haven't seen a reply and several people have asked in different ways. In the "Summary of your loan" section on the GFE & the "Loan Terms" section of the HUD there is a box to complete for increasing payment amounts (monthly amount owed) over the course of the loan for ARM type transactions.
The question I can't find any guidance for is whether the payment increases (periodic/lifetime) we list on the GFE & HUD are the same
1. as on the TIL (fully indexed rate)
2. or is the payment amount we insert the amount represented by say a 2% first change and a 6% lifetime. This would be a true worst case scenario, which the TIL is not.
It makes a huge difference in the payment amounts that we put in these boxes. Especially if it is a premium rate which the TIL actually shows a decrease in the payment amount for the second payment stream.
Our vendor decided that they would not populate those boxes so it is manual on our part.
Thanks.
The question I can't find any guidance for is whether the payment increases (periodic/lifetime) we list on the GFE & HUD are the same
1. as on the TIL (fully indexed rate)
2. or is the payment amount we insert the amount represented by say a 2% first change and a 6% lifetime. This would be a true worst case scenario, which the TIL is not.
It makes a huge difference in the payment amounts that we put in these boxes. Especially if it is a premium rate which the TIL actually shows a decrease in the payment amount for the second payment stream.
Our vendor decided that they would not populate those boxes so it is manual on our part.
Thanks.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 12/17/09 05:03 PM
Originally Posted By: Sinatra Fan
I'm guessing that we are free to find anyone who will print them for us. And, since HUD did not give a list of publishers, there will be no 10% tolerance on the cost to print.
Actually, would this have to be disclosed as POC on the HUD-1???
Posted By: jsw9880
Re: RESPA changes 1-1-10 - 12/17/09 05:23 PM
I think HUD has been pretty clear that the charge for paying an outstanding property tax bill, or a bill due in the near future which we require to be paid by/at closing, does not need to be shown on the GFE. However, if we do require it to be paid and show the charge on the HUD-1, on what line do we put it so that it doesn't end up subject to a tolerance limit, which it will always exceed, because we didn't show any estimate on the GFE? Or, am I understanding from Dave's post above that this wouldn't even be shown on the HUD-1??
Posted By: Dani York, CRCM
Re: RESPA changes 1-1-10 - 12/17/09 05:40 PM
Appendix A has eliminated the language regarding property taxes unless you escrow. I really don't think it is required anymore if you don't escrow.
Posted By: Rosemarie
Re: RESPA changes 1-1-10 - 12/17/09 05:44 PM
But even if you don't escrow you'd still want an outstanding bill to be paid at closing. I'm assuming the title company will list it on the HUD if it's paid at closing so I'm still confused with jsw9880 - if it wasn't on your GFE wouldn't it be off on the HUD?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/17/09 05:50 PM
David, I had already sent a question awhile back questioning if it was true that the transfer tax was to be treated the same as OTI, as it seemed folks were understanding this to be the case. They responded back that it was not...here's a copy:
Suzy:
I don’t think they are treated the same.
Q: If it is required by state or local law for a seller to pay a portion of the total charge for transfer taxes, on what line should the seller’s charge be listed on the HUD-1?
A: If it is required by state law for a seller to pay a portion of the total charge for transfer taxes and therefore not on the GFE, the seller’s charge should be listed as a charge in the seller's column in Lines 1204 and 1205 on the HUD-1, and the total charges for transfer taxes should be itemized to the left of those columns, as indicated in the following example:
(sorry, the example (which is in the FAQ) doesn't carry over.)
Suzy:
I don’t think they are treated the same.
Q: If it is required by state or local law for a seller to pay a portion of the total charge for transfer taxes, on what line should the seller’s charge be listed on the HUD-1?
A: If it is required by state law for a seller to pay a portion of the total charge for transfer taxes and therefore not on the GFE, the seller’s charge should be listed as a charge in the seller's column in Lines 1204 and 1205 on the HUD-1, and the total charges for transfer taxes should be itemized to the left of those columns, as indicated in the following example:
(sorry, the example (which is in the FAQ) doesn't carry over.)
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/17/09 05:51 PM
Originally Posted By: rjenkins
i spoke to a lady from HUD this morning and her statement was that HUD no longer supplied the Hard Copies. I assume we can order them from somebody else or do we just hand customers xeroxed copies of the new form?
That's interesting because I talked to the order supply lady this morning and she said they didn't have the bound booklets yet but should have them by the 1st of January. Interesting! This is frustrating at times- you get different answers to the same question.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/17/09 05:52 PM
As far as Block one allowing no change, even for changed circumstances...folks who generally keep any part or all of the ysp could really be bitten by that one!
Posted By: Rosemarie
Re: RESPA changes 1-1-10 - 12/17/09 06:01 PM
OK, I have a really BIG question. How are we suppose to quote a rate or fee that could be based on the customers loan to value. i.e. Freddie Charges a credit score fee but the fee is determined on the LTV - if you don't have the actual appraisal, how are you suppose to quote the fee that you can't change later when you know the real LTV?
Posted By: Bullseye
Re: RESPA changes 1-1-10 - 12/17/09 06:08 PM
Originally Posted By: RR joker
As far as Block one allowing no change, even for changed circumstances...folks who generally keep any part or all of the ysp could really be bitten by that one!
This is causing us the biggest concern right now. Not so much the YSP part but just not being able to add anything. If something shows up on the title and we need the attorney to prepare a document, the doc prep fee would supposedly go in there but can't change it, VOE fees that arise would go in there, but can't change it, escrow waiver fees go in there, but can't change it....I could go on & on. Am I missing something here??
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/17/09 06:14 PM
Good question...quote the highest possible within reason? No doubt, this is a mess.
Posted By: Bullseye
Re: RESPA changes 1-1-10 - 12/17/09 06:41 PM
Originally Posted By: RR joker
Good question...quote the highest possible within reason? No doubt, this is a mess.
And for that, I am thankful my family spikes the holiday punch!
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 12/17/09 06:49 PM
Originally Posted By: Rosemarie
OK, I have a really BIG question. How are we suppose to quote a rate or fee that could be based on the customers loan to value. i.e. Freddie Charges a credit score fee but the fee is determined on the LTV - if you don't have the actual appraisal, how are you suppose to quote the fee that you can't change later when you know the real LTV?
Wouldn't you base your quote on the stated value provided by the customer at application. Then if this changes due to actual appraised value, you have a changed icrumstance.
Posted By: Rosemarie
Re: RESPA changes 1-1-10 - 12/17/09 06:53 PM
Does anyone know - if the value the borrower quotes differs from the appraisal is this eligible for a "Changed Circumstance"? Where specifically do I find what is eligible?
Posted By: ForceFull1
Re: RESPA changes 1-1-10 - 12/17/09 07:16 PM
Originally Posted By: jsw9880
I think HUD has been pretty clear that the charge for paying an outstanding property tax bill, or a bill due in the near future which we require to be paid by/at closing, does not need to be shown on the GFE. However, if we do require it to be paid and show the charge on the HUD-1, on what line do we put it so that it doesn't end up subject to a tolerance limit, which it will always exceed, because we didn't show any estimate on the GFE? Or, am I understanding from Dave's post above that this wouldn't even be shown on the HUD-1??
Per my conversation with our local FDIC office, the taxes belong in Block 3 and would be subject to 10% tolerance, if we expect to collect a tax payment at closing. They would be eligible for changed circumstances if the actual payment wasn't available (from the taxing authority) when the GFE was prepared, or if a payment date change causes the need for the taxes to be collected.
I know this answer contradicts David's view, and I spent a good deal of time arguing the point with my examiner. Yes, it makes no sense. But then the above must be correct, because none of these changes makes sense!
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/17/09 07:21 PM
Originally Posted By: Rosemarie
Does anyone know - if the value the borrower quotes differs from the appraisal is this eligible for a "Changed Circumstance"? Where specifically do I find what is eligible?
My understanding is the actual value could end up to be a bona fide changed circumstance as it could change the loan amount which is a stated changed circumstance. Unfortunately, HUD has only opined on a few situations that can or can NOT be changed circumstances. If you find a specific list, please share...but I won't hold my breath!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/17/09 07:26 PM
I just got the following email from one of our clients:
"They won't fill orders for new booklets under sometime after 1/1; they actually told me to call back after 1/1 to avoid confusion between sending me a copy of the old booklets and the new ones--you're right DUH."
"They won't fill orders for new booklets under sometime after 1/1; they actually told me to call back after 1/1 to avoid confusion between sending me a copy of the old booklets and the new ones--you're right DUH."
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 12/17/09 07:31 PM
Originally Posted By: Kash
I hate to ask this question again but I haven't seen a reply and several people have asked in different ways. In the "Summary of your loan" section on the GFE & the "Loan Terms" section of the HUD there is a box to complete for increasing payment amounts (monthly amount owed) over the course of the loan for ARM type transactions.
The question I can't find any guidance for is whether the payment increases (periodic/lifetime) we list on the GFE & HUD are the same
1. as on the TIL (fully indexed rate)
2. or is the payment amount we insert the amount represented by say a 2% first change and a 6% lifetime. This would be a true worst case scenario, which the TIL is not.
Our vendor decided that they would not populate those boxes so it is manual on our part.
Thanks.
The question I can't find any guidance for is whether the payment increases (periodic/lifetime) we list on the GFE & HUD are the same
1. as on the TIL (fully indexed rate)
2. or is the payment amount we insert the amount represented by say a 2% first change and a 6% lifetime. This would be a true worst case scenario, which the TIL is not.
Our vendor decided that they would not populate those boxes so it is manual on our part.
Thanks.
Option 2 above is correct.
Posted By: Carolina Blue
Re: RESPA changes 1-1-10 - 12/17/09 07:38 PM
Okay, our mortgage department pays a third party an underwriting fee. I've been telling them that it must be included in Block 1, Our Origination Charge, but now that I'm thinking about it why couldn't we itemize it out in Block 3? Any thoughts?
Posted By: kristin09
Re: RESPA changes 1-1-10 - 12/17/09 07:38 PM
Originally Posted By: RR joker
Originally Posted By: Rosemarie
Does anyone know - if the value the borrower quotes differs from the appraisal is this eligible for a "Changed Circumstance"? Where specifically do I find what is eligible?
My understanding is the actual value could end up to be a bona fide changed circumstance as it could change the loan amount which is a stated changed circumstance. Unfortunately, HUD has only opined on a few situations that can or can NOT be changed circumstances. If you find a specific list, please share...but I won't hold my breath!
You cannot change the origination charge in Block 1 even for most changed circustances. HUD clarified that on their recent conference calls. We originally thought a Fannie Mae/Freddie Mac LLPA would go in Block 1 with the first box in block 2 checked. BUT since the origination charge cannot change (even if appraisal came back differently), we are putting the LLPA charge in Block 2, Box 3 (although it doesn't quite make sense!). But we can go back and change that number and the adjusted origination charges for a different appraisal that affects the LLPA and that is why we think it should go there! (Until further guidance)..
Posted By: ForceFull1
Re: RESPA changes 1-1-10 - 12/17/09 07:44 PM
Originally Posted By: kristin09
You cannot change the origination charge in Block 1 even for most changed circustances. HUD clarified that on their recent conference calls. We originally thought a Fannie Mae/Freddie Mac LLPA would go in Block 1 with the first box in block 2 checked. BUT since the origination charge cannot change (even if appraisal came back differently), we are putting the LLPA charge in Block 2, Box 3 (although it doesn't quite make sense!). But we can go back and change that number and the adjusted origination charges for a different appraisal that affects the LLPA and that is why we think it should go there! (Until further guidance)..
That's my interpretation too, Kristin. We are putting LLPAs and escrow waivers (0.25%) in block 2. In a way, it does make sense though. Those fees can also go against the interest rate if the customer prefers, so in a way it very much does belong in block 2 and not 1.
Posted By: jsw9880
Re: RESPA changes 1-1-10 - 12/17/09 07:46 PM
Thanks, ForceFull1. That's where we had arrived - exactly as you describe the direction given by your FDIC office - but had cause to re-evaluate based on the HUD webinar yesterday, which was pretty clear. Clear...but inoperable.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/17/09 07:54 PM
Originally Posted By: ForceFull1
Originally Posted By: kristin09
You cannot change the origination charge in Block 1 even for most changed circustances. HUD clarified that on their recent conference calls. We originally thought a Fannie Mae/Freddie Mac LLPA would go in Block 1 with the first box in block 2 checked. BUT since the origination charge cannot change (even if appraisal came back differently), we are putting the LLPA charge in Block 2, Box 3 (although it doesn't quite make sense!). But we can go back and change that number and the adjusted origination charges for a different appraisal that affects the LLPA and that is why we think it should go there! (Until further guidance)..
That's my interpretation too, Kristin. We are putting LLPAs and escrow waivers (0.25%) in block 2. In a way, it does make sense though. Those fees can also go against the interest rate if the customer prefers, so in a way it very much does belong in block 2 and not 1.
So, if you have a credit and a charge, you are netting all of that out and showing it either in box 2 or box 3?
I have thought all along that Box 3 (because it uses the term "points") has been refering only to discount points...ugh.
Posted By: Amos
Re: RESPA changes 1-1-10 - 12/17/09 08:43 PM
If you require PMI on a loan and you select the PMI company, but you are not collecting any PMI premium at closing, do you need to disclose private mortgage insurance in Block 3 of the GFE?
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/17/09 08:44 PM
Originally Posted By: David Dickinson
Originally Posted By: pjs
I have a question- secondary market loans require a survey- the title company chooses the survey company- the bank does not- would we include an estimate of the survey in with the title fee on the GFE? How would we disclose on the HUD-1 because we get a bill for the survey from the survey company and not the title company. Thanks.
This is specifically addressed in the RESPA FAQs (HUD-1 General section). It depends on who requires the fee.
9) Q: Where should the survey fee be disclosed on the HUD-1?
A: The location of the survey fee on the HUD-1 is determined as follows:
(a) if the loan originator required a survey as a condition of the loan and selected the settlement service provider, the charge for the survey must be listed on a blank line in the 800 series in the borrower's column;
(b) if the loan originator required a survey as a condition of the loan and the borrower selected the settlement service provider, the charge for the survey must be listed as part of the total in Line 1301 of the HUD-1 and itemized as applicable;
(c) if a survey was required to issue a lender‘s or owner‘s title insurance policy, the charge for the survey is part of the charge in Line 1101 and must be further itemized if performed by a third party;
(d) if the borrower elected to obtain a survey that was neither required by the loan originator nor required to issue a lender‘s or owner‘s title insurance policy, then the charge is listed in the borrower‘s column on a blank line in the 1300 series.
Although this Q&A discusses the HUD-1, we can use the "logic" to determine the corresponding GFE Block from the answer.
David! or anyone - I guess I can't apply logic where the survey charge would be shown on the HUD when Letter C would apply to us. I thought it would go under 1303 but a title company said they thought it would be itemized in the 1100 series. Thanks so much.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/17/09 09:30 PM
iT SHOULD be itemized in 1100, just as it states.
Posted By: Princess Romeo
Re: RESPA changes 1-1-10 - 12/17/09 09:32 PM
Another quick scenario - something you typically see for 2nd Mortgage loans:
Lender has a flat "Processing Fee" usually a couple hundred dollars give or take, and this fee covers documentation, flood hazard verification, tax service, credit report, property valuation, recording and an abbreviated title report.
So on the GFE, that Processing Fee would be shown on Block A, Line 1. POC is no longer shown on the GFE so everything else will be blank.
Then on the HUD-1, all of those above fees would be scattered across the HUD-1 in their respective sections but the amount would be to the left of the column with an indication of POC.
Homeowner's Insurance would still be shown on the GFE in Section B, Line 11 and then on the HUD-1 as POC.
Do I have that right?
BTW - why didn't HUD just created a darn column for POC items instead of making us squeeze or scrawl in the margins? (Rhetorical question...)
Lender has a flat "Processing Fee" usually a couple hundred dollars give or take, and this fee covers documentation, flood hazard verification, tax service, credit report, property valuation, recording and an abbreviated title report.
So on the GFE, that Processing Fee would be shown on Block A, Line 1. POC is no longer shown on the GFE so everything else will be blank.
Then on the HUD-1, all of those above fees would be scattered across the HUD-1 in their respective sections but the amount would be to the left of the column with an indication of POC.
Homeowner's Insurance would still be shown on the GFE in Section B, Line 11 and then on the HUD-1 as POC.
Do I have that right?
BTW - why didn't HUD just created a darn column for POC items instead of making us squeeze or scrawl in the margins? (Rhetorical question...)
Posted By: Bville
Re: RESPA changes 1-1-10 - 12/17/09 10:10 PM
I thought if we had a flat processing fee that covered several other charges, we entered the processing fee in Block 1 (line 801) and a credit in Block 2 (line 802) for all the fees the processing fee covered. Then we entered flood, credit report, etc. (everything the processing fee covered) as though the borrower was paying them.) Everything nets and comes out correctly at the bottom of the page.
Posted By: ktac MITCH
Re: RESPA changes 1-1-10 - 12/17/09 10:20 PM
Bville - I agree with you. It is kinda like a "No Cost" loan.
The fees are disclosed as usual in items 4-8 & then a Negative for the fees the lender is "eating" goes in item 2, with "box B" in item 2 filled in.
The fees are disclosed as usual in items 4-8 & then a Negative for the fees the lender is "eating" goes in item 2, with "box B" in item 2 filled in.
Posted By: swiggles
Re: RESPA changes 1-1-10 - 12/17/09 10:43 PM
...just a quick note about the Settlement Cost Booklet....we've always used the .pdf version. It's loaded in our software where our application forms are stored, so that when a lender prints the ap, out comes the settlement costs booklet with the ap. We don't have to depend upon the lender to remember to give the booklet. Well NOW, the booklet is 60 pages!!! We may have to go back to ordering booklets!!
Posted By: Princess Romeo
Re: RESPA changes 1-1-10 - 12/17/09 10:52 PM
Originally Posted By: Bville
I thought if we had a flat processing fee that covered several other charges, we entered the processing fee in Block 1 (line 801) and a credit in Block 2 (line 802) for all the fees the processing fee covered. Then we entered flood, credit report, etc. (everything the processing fee covered) as though the borrower was paying them.) Everything nets and comes out correctly at the bottom of the page.
I've heard it described both ways. The fee that is really sticking with me is the darn credit report fee - especially on a 2nd TD where typically the regular ol' Experian is run. Typically Experian (or Trans Union or Equifax - take your pick) has tiered pricing based on volume for the institution which pulls credit reports for consumer loans, credit cards, commercial guarantors, etc. Joint reports can have one tier price, individual reports another. you won't know the exact fee for at least 45 days later when the bill comes.
I looked at the requirement for "Average cost" and that's a royal pain too. No wonder a number of smaller banks are just saying "NO" to closed-end consumer real estate loans.
Posted By: Angel Eyes
Re: RESPA changes 1-1-10 - 12/17/09 10:56 PM
I am worried about the insurance risk when we send frail people out of the bank with the settlement book and everything else...it's going to be a heavy load!
Posted By: Princess Romeo
Re: RESPA changes 1-1-10 - 12/18/09 12:29 AM
Wait until you have to translate all of it onto braille.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 12/18/09 02:08 AM
Originally Posted By: RR joker
Originally Posted By: ForceFull1
Originally Posted By: kristin09
You cannot change the origination charge in Block 1 even for most changed circustances. HUD clarified that on their recent conference calls. We originally thought a Fannie Mae/Freddie Mac LLPA would go in Block 1 with the first box in block 2 checked. BUT since the origination charge cannot change (even if appraisal came back differently), we are putting the LLPA charge in Block 2, Box 3 (although it doesn't quite make sense!). But we can go back and change that number and the adjusted origination charges for a different appraisal that affects the LLPA and that is why we think it should go there! (Until further guidance)..
That's my interpretation too, Kristin. We are putting LLPAs and escrow waivers (0.25%) in block 2. In a way, it does make sense though. Those fees can also go against the interest rate if the customer prefers, so in a way it very much does belong in block 2 and not 1.
So, if you have a credit and a charge, you are netting all of that out and showing it either in box 2 or box 3?
I have thought all along that Box 3 (because it uses the term "points") has been refering only to discount points...ugh.
I must be missing something. Where does it say the Block 1 can not change (period)?
Page 3 of the GFE states that the fees can not increase once the rate is locked.
Page 13 of the FAQ explains the changed circumstances. Item (2) Information particular to the borrower or transaction that was relied on in providing the GFE and that changes or is found to be inaccurate after the GFE has been provided, which information may include information about the credit quality of the borrower, the amount of the loan, the estimated value of the property, or any other information that was used in providing the GFE.
Page 22 - question of the FAQ states that the fees can not increase unless there is a changed circumstance.
We are going to quote all applicable delivery fees in Block 1 with the first box in block 2 checked based on the information have at the time of the GFE. It is easier to tell a customer that the GFE provided is a worse case scenario. It clearly states in (2) if information changes or is found to be inaccurate than we have a changed circumstance. We do not lock a rate until we have all the items necessary to approve the loan. We do not approve a loan until we have the appraisal. The delivery fees, which are part of our origination charges, are dependant upon the credit score and LTV. We know the credit score at the time of the GFE because we can obtain a credit report prior to giving the GFE. If the appraisal comes back lower, than that changes the LTV, therefore we have a changed circumstance. If the appraisal comes back the same, the fees we quoted will be correct. If the appraisal comes back higher, the LTV will be lower and the fees will either be the same as quoted or decrease.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 12/18/09 04:23 AM
Originally Posted By: Carolina Blue
Okay, our mortgage department pays a third party an underwriting fee. I've been telling them that it must be included in Block 1, Our Origination Charge, but now that I'm thinking about it why couldn't we itemize it out in Block 3? Any thoughts?
Because the instructions won't allow it. A third party underwriting fee is treated no different then a bank charge.
"Block 1, ‘‘Our origination charge.’’— The loan originator must state here all charges that all loan originators involved in this transaction will receive,.."
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 12/18/09 12:56 PM
We are considering charging a flat fee of say $750 for Line 1 "Our Origination Charge" which will cover all of the typical administarive and origination expenses associated with a loan. These include all services which HUD has identifed as block 1 items shown below. We will not itemize these fees on the GFE nor HUD-1 and some loans may or may not have all fees.
• internal processing fees
• internal underwriting fees
• DU/Investor underwriting fees
• Doc Prep fees (internal and external)
• Admin fees & wire transfer fees
• Courier fees
• 4506T fees
• Employment verification fees
• Condo questionnaire fees (HOA)
• Condo insurance verification fees
• HO Insurance verification fees
• Anti-fraud check fees
• 3rd party subordination fees
None of our fees listed are scheduled to appear in any other section of the GFE, thus we do not anticipate any lender credit on the GFE or HUD-1, nor do we anticipate reconciling the actual cost of these fees to our origination fee of line 1. If one loan does not have a subordination fee nor a condo insurance fee, we will not adjust our origination as we can document our actual origination fees to be at least the amount shown.
This seems in line with the intent of RESPA to move away from itemization and more to a simplified fee structure (though the end result is not cheaper from the borrower).
How are others handling?
Regard and Happy Holidays!
• internal processing fees
• internal underwriting fees
• DU/Investor underwriting fees
• Doc Prep fees (internal and external)
• Admin fees & wire transfer fees
• Courier fees
• 4506T fees
• Employment verification fees
• Condo questionnaire fees (HOA)
• Condo insurance verification fees
• HO Insurance verification fees
• Anti-fraud check fees
• 3rd party subordination fees
None of our fees listed are scheduled to appear in any other section of the GFE, thus we do not anticipate any lender credit on the GFE or HUD-1, nor do we anticipate reconciling the actual cost of these fees to our origination fee of line 1. If one loan does not have a subordination fee nor a condo insurance fee, we will not adjust our origination as we can document our actual origination fees to be at least the amount shown.
This seems in line with the intent of RESPA to move away from itemization and more to a simplified fee structure (though the end result is not cheaper from the borrower).
How are others handling?
Regard and Happy Holidays!
Posted By: shea930
Re: RESPA changes 1-1-10 - 12/18/09 01:36 PM
Just wanted to let everyone know I was able to order the 2010 settlement cost booklets this morning with HUD. Call this number 1-800-767-7468
Posted By: Skittles
Re: RESPA changes 1-1-10 - 12/18/09 01:48 PM
OK - I called them yesterday and they said they hadn't received them.
Thanks for posting this. I'll try again later today.
Just called and ordered. Again - thanks.
Thanks for posting this. I'll try again later today.
Just called and ordered. Again - thanks.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/18/09 02:01 PM
I'm really on the fence with these unknown fees that some of you are saying should go in block 2 (charges). We know the origination fee charged will have to be broken out for IRS purposes (a portion of block 1) on the HUD. If you lump other charges into block 3, you would additionally have to do the same for any discount points paid.
Maybe I'm misunderstanding what an "LLPA" actually is. It does sound like the escrow waiver could be something affected by the interest rate, so is it disclosable to the IRS as points? Perhaps this is where I'm confused since I'm not too familiar with those fees.
Maybe I'm misunderstanding what an "LLPA" actually is. It does sound like the escrow waiver could be something affected by the interest rate, so is it disclosable to the IRS as points? Perhaps this is where I'm confused since I'm not too familiar with those fees.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/18/09 02:09 PM
This may be a dumb question asked six times already, but block 11 on the GFE, homeowners insurance, do we have to carry the cost over and include it into the charges, even though we always require the borrower to pay the premium prior to closing, and never out of the closing proceeds?
My gut says yes, but...
My gut says yes, but...
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/18/09 02:30 PM
And Jay..the same is true often of the credit report and appraisal fee that is required to be paid up front...you have to disclose it and carry it over and show it on the comparison...are we going to have 1/2 a dozen credits for those things POC? ARGH.
Posted By: shea930
Re: RESPA changes 1-1-10 - 12/18/09 03:10 PM
We have our attorney do title exam, prepare HUD, and prepare mortgage for us. Would the fee for them to prepare the mortgage go in Block 1 or Block 4? HUD's Q & A if you look under Block 1 question (6)and HUD-1 - 1100 series question (3) they totally contradict each other.
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 12/18/09 03:13 PM
Originally Posted By: Princess Rooney
Wait until you have to translate all of it onto braille.
and Spanish, French, German, Russian, Portguese, Flemish, Norwegian...
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 12/18/09 03:15 PM
Originally Posted By: shea930
Just wanted to let everyone know I was able to order the 2010 settlement cost booklets this morning with HUD. Call this number 1-800-767-7468
Grrrr... I called yesterday and they told me to call back in about 3 weeks.
I just called and sure enough they took my order but said this set would be in black and white.
Posted By: Carolina Blue
Re: RESPA changes 1-1-10 - 12/18/09 03:51 PM
Quote:
Because the instructions won't allow it. A third party underwriting fee is treated no different then a bank charge.
"Block 1, ‘‘Our origination charge.’’— The loan originator must state here all charges that all loan originators involved in this transaction will receive,.."
Thanks Randy. I know the Mortgage Manager's going to ask, so what is the difference between paying a third party to underwrite a loan and paying a third party to perform a flood determination or appraisal? RESPA defines underwriting as as settlement service so why does the underwriting 3rd party fee have to go in Block 1 but all other third party settlement services go in Block 3?
Edited: to add Randy's reply
Posted By: Sage
Re: RESPA changes 1-1-10 - 12/18/09 04:05 PM
If the cost of title insurance for the lender or the owner is tied to the loan amount, and the loan amount changes- is that a changed circumstance that allows you to issue a new GFE to restate Box 4 (Title Services) and Box 5 (Owner's TItle) ?
Posted By: Oursisnottoreasonwhy
Re: RESPA changes 1-1-10 - 12/18/09 04:34 PM
Does the new Hud Settlement Cost booklet get handed out with all GFE's or only purchase money as in the past?
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 12/18/09 04:38 PM
Originally Posted By: Oursisnottoreasonwhy
Does the new Hud Settlement Cost booklet get handed out with all GFE's or only purchase money as in the past?
I believe it's still on purchases only.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 12/18/09 04:48 PM
"Thanks Randy. I know the Mortgage Manager's going to ask, so what is the difference between paying a third party to underwrite a loan and paying a third party to perform a flood determination or appraisal? RESPA defines underwriting as as settlement service so why does the underwriting 3rd party fee have to go in Block 1 but all other third party settlement services go in Block 3?"
Ours is not to explain why HUD has set the rules the way they have, just that we interpret them correctly. Show the Mortgage Manager this FAQ:
2) Q: Where does the loan originator put the lender‘s processing fee on the GFE?
A: All loan originator charges—including processing, application, administration fees, underwriting, document preparation, wire, lender inspection, mortgage broker, loan handling, and other miscellaneous fees—are contained in Block 1, ―Our origination charge‖.
Ours is not to explain why HUD has set the rules the way they have, just that we interpret them correctly. Show the Mortgage Manager this FAQ:
2) Q: Where does the loan originator put the lender‘s processing fee on the GFE?
A: All loan originator charges—including processing, application, administration fees, underwriting, document preparation, wire, lender inspection, mortgage broker, loan handling, and other miscellaneous fees—are contained in Block 1, ―Our origination charge‖.
Posted By: Buccs
Re: RESPA changes 1-1-10 - 12/18/09 06:06 PM
Question regarding section 2 of important dates (This estimate for all other settlement charges is available through:):
We're trying to hard code as much information into our system as we can and we'd like to put this in the section:
"30 Days from Date of GFE"
Can we do this or do we need a particular date? I thought it may work because the date of GFE is listed on the same form.
We're trying to hard code as much information into our system as we can and we'd like to put this in the section:
"30 Days from Date of GFE"
Can we do this or do we need a particular date? I thought it may work because the date of GFE is listed on the same form.
Posted By: rockchalk02
Re: RESPA changes 1-1-10 - 12/18/09 06:14 PM
Section 3500.7(f)(6): What is a "new home purchase" Does this mean that if we have a new home purchase, if disclosed on the GFE, we can issue a revised GFE anytime up until 60 calendar days before closing for any reason??
Posted By: rockchalk02
Re: RESPA changes 1-1-10 - 12/18/09 06:20 PM
Further reading--page 68221 of final rule 1st column--construction loans.
Posted By: Pounder
Re: RESPA changes 1-1-10 - 12/18/09 06:39 PM
If a financial institution is willing to absorb the 10% tolerance, they can select service providers and not allow the borrower to shop GFE blocks 3-6?
The F/I would not have to supply provider list right?
The F/I would not have to supply provider list right?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/18/09 06:41 PM
***Dead Horse Beating Alert***
We currently do preapprovals (with documented income) without a property address. I am trying to determine what could so drasticaly change on my GFE by simply naming the property after the fact. My figures for appraisal, CR, flood, tax service, orig, DU, etc, pretty much don't change.
What as I missing here, that people are afraid to continue to issue a GFE w/o and addy and do preapprovals??
We currently do preapprovals (with documented income) without a property address. I am trying to determine what could so drasticaly change on my GFE by simply naming the property after the fact. My figures for appraisal, CR, flood, tax service, orig, DU, etc, pretty much don't change.
What as I missing here, that people are afraid to continue to issue a GFE w/o and addy and do preapprovals??
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/18/09 06:57 PM
Quote:
We're trying to hard code as much information into our system as we can and we'd like to put this in the section:
"30 Days from Date of GFE"
"30 Days from Date of GFE"
Not IMO. It's my understanding (from the instuctions to "state" the date) #1 and #2 of the important dates section must have specific dates.
Appendix C reads as foolows:
In Line 2 the loan originator must state the date until whe the estimate of all other settlement charges for the GFE is availiable.
Posted By: kristin09
Re: RESPA changes 1-1-10 - 12/18/09 07:08 PM
Originally Posted By: jlroberts
Originally Posted By: RR joker
Originally Posted By: ForceFull1
Originally Posted By: kristin09
You cannot change the origination charge in Block 1 even for most changed circustances. HUD clarified that on their recent conference calls. We originally thought a Fannie Mae/Freddie Mac LLPA would go in Block 1 with the first box in block 2 checked. BUT since the origination charge cannot change (even if appraisal came back differently), we are putting the LLPA charge in Block 2, Box 3 (although it doesn't quite make sense!). But we can go back and change that number and the adjusted origination charges for a different appraisal that affects the LLPA and that is why we think it should go there! (Until further guidance)..
That's my interpretation too, Kristin. We are putting LLPAs and escrow waivers (0.25%) in block 2. In a way, it does make sense though. Those fees can also go against the interest rate if the customer prefers, so in a way it very much does belong in block 2 and not 1.
So, if you have a credit and a charge, you are netting all of that out and showing it either in box 2 or box 3?
I have thought all along that Box 3 (because it uses the term "points") has been refering only to discount points...ugh.
I must be missing something. Where does it say the Block 1 can not change (period)?
Page 3 of the GFE states that the fees can not increase once the rate is locked.
Page 13 of the FAQ explains the changed circumstances. Item (2) Information particular to the borrower or transaction that was relied on in providing the GFE and that changes or is found to be inaccurate after the GFE has been provided, which information may include information about the credit quality of the borrower, the amount of the loan, the estimated value of the property, or any other information that was used in providing the GFE.
Page 22 - question of the FAQ states that the fees can not increase unless there is a changed circumstance.
We are going to quote all applicable delivery fees in Block 1 with the first box in block 2 checked based on the information have at the time of the GFE. It is easier to tell a customer that the GFE provided is a worse case scenario. It clearly states in (2) if information changes or is found to be inaccurate than we have a changed circumstance. We do not lock a rate until we have all the items necessary to approve the loan. We do not approve a loan until we have the appraisal. The delivery fees, which are part of our origination charges, are dependant upon the credit score and LTV. We know the credit score at the time of the GFE because we can obtain a credit report prior to giving the GFE. If the appraisal comes back lower, than that changes the LTV, therefore we have a changed circumstance. If the appraisal comes back the same, the fees we quoted will be correct. If the appraisal comes back higher, the LTV will be lower and the fees will either be the same as quoted or decrease.
On the HUD conference calls held the past couple of weeks, the HUD attorney went over this. If you go to her slides (posted on the HUD webiste), it states on p. 13 that "Block 1 fees cannot change, even with a changed circumstance". The only exception being if the loan amount changes and a portion of the origination charge is a % of the loan or the overall laon program changes.
The LLPA item was addressed in the 11/19/09 version of the FAQs. The question was presented generally and HUD responded to it talking about mortgage broker LLPAs but we feel since you cannot change Block 1, we must put the Fannie Mae/Freddie Mac LLPA in Block 2, Box 3. The verbiage says points but this is where we think it should go because of the fact it is a risk based pricing adjustment that will probably change based on appraisal, which in turn affects LTV.
Any other opinions on this?
Posted By: Carolina Blue
Re: RESPA changes 1-1-10 - 12/18/09 07:29 PM
Thanks yet again Randy.
I wasn't trying to get you to explain the impossible. It just gets frustrating trying to teach these changes to others when there appears to be very little logic involved in the changes.
I wasn't trying to get you to explain the impossible.
It just gets frustrating trying to teach these changes to others when there appears to be very little logic involved in the changes.
Posted By: Buccs
Re: RESPA changes 1-1-10 - 12/18/09 08:42 PM
Thanks for your input Dan. I had my doubts but I was hoping otherwise...
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 12/18/09 09:06 PM
Thanks for the information on that slide. It looks like that presentation was for FHA loans. Unless there is a new FAQ that has not been posted on the website I think we are going to stick with the FAQ page 22,
3) Q: Can the charge shown on the GFE, Block 1, "Our origination charge", increase after the GFE has been issued?
A: No. Block 1, "Our origination charge" cannot increase unless there is a "changed circumstance" as defined in 24 CFR § 3500.2.
3) Q: Can the charge shown on the GFE, Block 1, "Our origination charge", increase after the GFE has been issued?
A: No. Block 1, "Our origination charge" cannot increase unless there is a "changed circumstance" as defined in 24 CFR § 3500.2.
Posted By: Tigg
Re: RESPA changes 1-1-10 - 12/18/09 09:23 PM
Hello Happy People!
Do I remember reading in here "somewhere" that if a bank does in-house appraisals and charges for them - the charge would have to be included in the origination charges in Block #1 because of retaining the fee?
I could be halucinating...just sayin'
Do I remember reading in here "somewhere" that if a bank does in-house appraisals and charges for them - the charge would have to be included in the origination charges in Block #1 because of retaining the fee?
I could be halucinating...just sayin'
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 12/18/09 09:29 PM
Tigg, I believe so if I am reading the FAQ, page 40 correctly.
8) Q: If the loan originator performs loan origination services typically performed by a third-party for the appraisal, credit report and/or flood certificate, are the charges for these services listed in Lines 804 thru 807 or are the charges included in the loan originator‘s charge in Line 801 on the HUD-1?
A: Charges for the appraisal, credit report and/or flood certificate performed by the loan originator in a transaction must be included in the loan originator‘s charge listed in Line 801 on the HUD-1.
8) Q: If the loan originator performs loan origination services typically performed by a third-party for the appraisal, credit report and/or flood certificate, are the charges for these services listed in Lines 804 thru 807 or are the charges included in the loan originator‘s charge in Line 801 on the HUD-1?
A: Charges for the appraisal, credit report and/or flood certificate performed by the loan originator in a transaction must be included in the loan originator‘s charge listed in Line 801 on the HUD-1.
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 12/18/09 09:49 PM
If our flood determination fee is technically not charged to the borrower (it is absorbed as part of our doc. fee), does that mean we just don't put anything on our GFE about flood? On the old GFE, we didn't have it as an itemized stand-alone estimated cost, we just had Federal Flood listed as a required provider. With no required provider page anymore, i'm confused as to what to do. Never had to think as much about RESPA stuff as i am now. Any help is appreciated.
Posted By: qualitycontrol1
Re: RESPA changes 1-1-10 - 12/18/09 10:12 PM
Does anyone out there have a form they are using for the providers list that they'd like to share???
Posted By: MyKidsMom
Re: RESPA changes 1-1-10 - 12/18/09 10:12 PM
rjenkins,
I think you have to show that like a no-cost loan. Show it as a credit. Since they can't shop for a flood provider, no list needs to be given.
I think you have to show that like a no-cost loan. Show it as a credit. Since they can't shop for a flood provider, no list needs to be given.
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 12/18/09 11:05 PM
but isn't it already there since the doc fee is in the origination charge already (block 1)?
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 12/18/09 11:06 PM
if i show a credit, don't i don't i double report it?
Posted By: ktac MITCH
Re: RESPA changes 1-1-10 - 12/18/09 11:20 PM
Originally Posted By: rjenkins
If our flood determination fee is technically not charged to the borrower (it is absorbed as part of our doc. fee), does that mean we just don't put anything on our GFE about flood? On the old GFE, we didn't have it as an itemized stand-alone estimated cost, we just had Federal Flood listed as a required provider. With no required provider page anymore, i'm confused as to what to do. Never had to think as much about RESPA stuff as i am now. Any help is appreciated.
You require the Flood Determination to do the loan {you could look at the map and fill out the SFHD yourself }. Therefore - You are requiring a 3rd Party Service and choosing the Provider, SO this has to go in block 3 as a fee. Because you absorb it out of the total fees to you in Block 1 - - - You should also mark the second Box in Block 2 and indicate the <Negative Amount> = it washes with Block 3
Posted By: Snowgirl
Re: RESPA changes 1-1-10 - 12/18/09 11:38 PM
Originally Posted By: qualitycontrol1
Does anyone out there have a form they are using for the providers list that they'd like to share???
I would be very interested in a copy of the form for the providers as well. Also does anyone have an acceptance form they are using to document the customer's intent to go ahead with the loan? How about a form to document changed circumstances?
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/19/09 12:41 PM
Originally Posted By: RR joker
iT SHOULD be itemized in 1100, just as it states.
thanks RR ~ once you step away from it and come back to it with your answer it reads better.
Posted By: Runreb
Re: RESPA changes 1-1-10 - 12/19/09 10:39 PM
Regarding prequalifications where you have five pieces of info, but not the property address, are you continuing to mail the individual the same prequal. letter as you did prior to the new RESPA changes? What disclosures (notice to home loan app., credit score discl., right to receive copy of appraisal, servicing discl., affiliated business,etc.) do you send with the prequal. letter? Also, do you phrase it something to the effect of: You are pre-qualified for a loan in the amount of $xxxxxxxx. This is based on a 30 year fixed rate at the current rate of 6.00%. The estimated principal and interest payments would be$xxx. The following documents are required to process the file after we receive your intent to proceed... then list all of the enclosed disclosures plus note income and asset verifications, etc. will be needed following intent.
Thanks!
Thanks!
Posted By: kristin09
Re: RESPA changes 1-1-10 - 12/21/09 02:53 PM
Originally Posted By: jlroberts
Thanks for the information on that slide. It looks like that presentation was for FHA loans. Unless there is a new FAQ that has not been posted on the website I think we are going to stick with the FAQ page 22,
3) Q: Can the charge shown on the GFE, Block 1, "Our origination charge", increase after the GFE has been issued?
A: No. Block 1, "Our origination charge" cannot increase unless there is a "changed circumstance" as defined in 24 CFR § 3500.2.
3) Q: Can the charge shown on the GFE, Block 1, "Our origination charge", increase after the GFE has been issued?
A: No. Block 1, "Our origination charge" cannot increase unless there is a "changed circumstance" as defined in 24 CFR § 3500.2.
That presentation was not for FHA loans. That is just one of HUD's logos at the top of the screen. It was the "RESPA Plain English" webinar. It is still posted on their site if you want to check it out. I understand if you don't feel comfortable with relying on a slide but Vicki Bott definitely stressed this point of not changing the origination charge, only changing the adjusted origination charge for a changed circumstance. Hopefully more FAQs come out soon....
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 12/21/09 03:39 PM
Originally Posted By: Runreb
Regarding prequalifications where you have five pieces of info, but not the property address, are you continuing to mail the individual the same prequal. letter as you did prior to the new RESPA changes? What disclosures (notice to home loan app., credit score discl., right to receive copy of appraisal, servicing discl., affiliated business,etc.) do you send with the prequal. letter? Also, do you phrase it something to the effect of: You are pre-qualified for a loan in the amount of $xxxxxxxx. This is based on a 30 year fixed rate at the current rate of 6.00%. The estimated principal and interest payments would be$xxx. The following documents are required to process the file after we receive your intent to proceed... then list all of the enclosed disclosures plus note income and asset verifications, etc. will be needed following intent.
We don't send the score notice separately. We have the credit bureau send it out.
Thanks!
We don't send the score notice separately. We have the credit bureau send it out.
Thanks!
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/21/09 06:21 PM
Originally Posted By: qualitycontrol1
Does anyone out there have a form they are using for the providers list that they'd like to share???
The Regulatory Screwed Over Bank regularly uses the following Service Providers to provide their specific services for real estate related loans. The Regulatory Screwed Over Bank does not specifically endorse these providers and the list is being provided to you in accordance with RESPA 3500.7 and the instructions in Appendix C of HUD’s Regulation X RESPA.
You are under no obligation to choose the providers shown and are free to choose your own provider as long as they are properly licensed and they regularly perform the required service.
This list is controlled and maintained by the manager of The Regulatory Screwed Over Bank's mortgage loan department. This list is current as of January 2, 2010.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/21/09 06:39 PM
DAN NOW CUT THAT OUT!!!!!!!! I start cackling like a hen and then trying to cya saying 'but it's my banking website and I'm reading about RESPA changes...honestly I am!' Regulatory Screwed Over Bank 
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/21/09 07:13 PM
Ain't that just the TRUTH! Thanks for the laugh, Dan! :-)
Posted By: Tigg
Re: RESPA changes 1-1-10 - 12/21/09 07:16 PM
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 12/21/09 07:52 PM
I nominate Dan's post as "Post of the Day."
Posted By: Mr. E.
Re: RESPA changes 1-1-10 - 12/21/09 07:57 PM
We are into full blown testing of our system. I'm looking at a purchase GFE. In box 6 we are listing Life & disability rollover, subordination fee (charge from other institution) and condo certification. I'm struggling with the subordination fee and the L & D rollover. They don't seem to fit box 6. Can I get an opinion on these 2 charges and where they should be disclosed? Thanks!
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/21/09 08:30 PM
First, thanks everyone. Glad I was able to bring a smile to your faces in spite of all these changes we are faced with.
Yaz:
I'm not sure what a life and disability rollover is. So no comment on that fee.
If the subordination fee is the fee being charged by the financial institution agreeing to the subordination then I would think that would most likely go in in Block 1 as part of the origination charges. If it is the filing fee for the subordination agreement then I would put in Block 7.
Yaz:
I'm not sure what a life and disability rollover is. So no comment on that fee.
If the subordination fee is the fee being charged by the financial institution agreeing to the subordination then I would think that would most likely go in in Block 1 as part of the origination charges. If it is the filing fee for the subordination agreement then I would put in Block 7.
Posted By: Mr. E.
Re: RESPA changes 1-1-10 - 12/21/09 08:43 PM
Thanks Dan. If a Borrower has a life and disablility policy on another mortgage and they wish to continue that insurance on a refinance with us, (sorry, I said purchase earlier)we would charge the first month upfront. This fee is paid to a third party. Not sure were this would go.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/21/09 09:04 PM
Generally, voluntary life and disability charges are not considered settlement charges. I would think this would be shown in Block 9 as part of your escrow deposit.
Posted By: Runreb
Re: RESPA changes 1-1-10 - 12/21/09 09:14 PM
Any thoughts here or how you are handling prequals>>>>>>>>>>
Originally Posted By: Runreb
Regarding prequalifications where you have five pieces of info, but not the property address, are you continuing to mail the individual the same prequal. letter as you did prior to the new RESPA changes? What disclosures (notice to home loan app., credit score discl., right to receive copy of appraisal, servicing discl., affiliated business,etc.) do you send with the prequal. letter? Also, do you phrase it something to the effect of: You are pre-qualified for a loan in the amount of $xxxxxxxx. This is based on a 30 year fixed rate at the current rate of 6.00%. The estimated principal and interest payments would be$xxx. The following documents are required to process the file after we receive your intent to proceed... then list all of the enclosed disclosures plus note income and asset verifications, etc. will be needed following intent.
Thanks!
Thanks!
Posted By: nelender
Re: RESPA changes 1-1-10 - 12/21/09 09:32 PM
If the original GFE was issued with Box 1 of Block 2 marked, and the rate is later relocked, on a revised GFE, couldn't we again choose to mark Box 1 of Block 2, resulting in a changed Block 1 (assuming that there was increase or decrease in origination points due to the relock)?
Do ALL applicants have to receive the GFE, AND all applicants provide notice of intent to proceed before we can collect fees beyond the credit report?
Do ALL applicants have to receive the GFE, AND all applicants provide notice of intent to proceed before we can collect fees beyond the credit report?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/21/09 09:33 PM
My group is still insisting on deoing preapprovals with the hope no one finds a house they like within 10 business days of the GFE
This point is a real bugger to me since so many of these lately are not discovered wuntil title comes in... I am afraid of how many of these subordination fees charged by the bank, we will have to eat, since we cannot change Block 1.
Originally Posted By: dan
If the subordination fee is the fee being charged by the financial institution agreeing to the subordination then I would think that would most likely go in in Block 1 as part of the origination charges.
This point is a real bugger to me since so many of these lately are not discovered wuntil title comes in... I am afraid of how many of these subordination fees charged by the bank, we will have to eat, since we cannot change Block 1.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/21/09 09:49 PM
I didn't listen to any of the HUD presentations. From what I'm hearing I'm glad I didn't.
From page 22 of the 11/19/09 FAQs:
3) Q: Can the charge shown on the GFE, Block 1, ―Our origination charge‖, increase after the GFE has been issued?
A: No. Block 1, ―Our origination charge‖ cannot increase unless there is a ―changed circumstance‖ as defined in 24 CFR § 3500.2.
To me this plainly states that Block 1 can change in relation to a qualified changed circumstance, however keep in mind that only the charges shown in Block 1 that are affected by the changed circumstance can change.
What I'm most concerned about is page 23 Q&A #4. If we have stated a credit in bullet #2 in block 2 does that asinine answer apply unless the rate and credit are reduced together? We don't have "no cost" loans but I'm concerned they will try to apply that answer to any credit shown in Block 2.
As a lender, we are considering just using the first bullet point in Block 2 for all our loans (even the ones that pay points to buy down the rate) with the exception of our FHA and VA loans because we are a correspondent and fall under the broker definition for those loans.
From page 22 of the 11/19/09 FAQs:
3) Q: Can the charge shown on the GFE, Block 1, ―Our origination charge‖, increase after the GFE has been issued?
A: No. Block 1, ―Our origination charge‖ cannot increase unless there is a ―changed circumstance‖ as defined in 24 CFR § 3500.2.
To me this plainly states that Block 1 can change in relation to a qualified changed circumstance, however keep in mind that only the charges shown in Block 1 that are affected by the changed circumstance can change.
What I'm most concerned about is page 23 Q&A #4. If we have stated a credit in bullet #2 in block 2 does that asinine answer apply unless the rate and credit are reduced together? We don't have "no cost" loans but I'm concerned they will try to apply that answer to any credit shown in Block 2.
As a lender, we are considering just using the first bullet point in Block 2 for all our loans (even the ones that pay points to buy down the rate) with the exception of our FHA and VA loans because we are a correspondent and fall under the broker definition for those loans.
Posted By: nelender
Re: RESPA changes 1-1-10 - 12/21/09 09:50 PM
It seems to me that a subordination fee paid to the originating lender would be an origination charge and something you would know about when you took the app, but a subordination fee paid to a third party lender would be a title-related charge and belong in Block 4. Additionally, I would think that the discovery of a secondary lien on the title commitment that wasn't revealed by the borrower on the original applcation would be a "changed circumstance".
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/21/09 10:01 PM
Quote:
I am afraid of how many of these subordination fees charged by the bank, we will have to eat, since we cannot change Block 1.
I'm not sure how a subordination agreement would come into play on a purchase transaction unless a current residence was also being used. And if you give pre-approvals on refinancings then you would have an identified property that you based the GFE on.
If it was found you would need a subordination for the current residence after receiving the title work I would think that would be a qualified changed circumstance allowing you to redisclose. Although I think I read somewhere today that one of the posters got a contradictory opinion from HUD.
I now hold my regard for HUD well below my regard for HMDA Help.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/21/09 10:09 PM
Quote:
but a subordination fee paid to a third party lender would be a title-related charge and belong in Block 4
The subordination agreement is required by the originating lender in order to be placed in the desired lien position. Why would it be a title charge vs an origination charge? The lender can proceed with the loan without the subordination agreement, they just won't be in the desired lien position.
Posted By: nelender
Re: RESPA changes 1-1-10 - 12/21/09 10:15 PM
Dan, I agree this would almost never come up on a purchase. Usually it happens where Lender A refinances a property currently financed by Lender B and there is either a favorable HELOC or forgiveable equity loan outstanding that the borrower wants to hang on to. Many times, subordinations aren't allowed due to underwriting considerations.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/21/09 10:22 PM
Or lenders have attached a mortgage to an auto loan... I am not so worried about the recording fees as I am about the 200-250 charge the lender is charging us to review it.
Per HUD's 'plain english' garbage: Block 1 fees CANNOT change, even with a changed circumstance. The exception being: if the loan amount changes and a portion of the origination charge is a percentage of the loan amount or the overall loan program changes.
This leads me to believe that when the title comes back on that refi and we need to the other bank to review and subordinate, where can I put that fee?
Per HUD's 'plain english' garbage: Block 1 fees CANNOT change, even with a changed circumstance. The exception being: if the loan amount changes and a portion of the origination charge is a percentage of the loan amount or the overall loan program changes.
This leads me to believe that when the title comes back on that refi and we need to the other bank to review and subordinate, where can I put that fee?
Posted By: nelender
Re: RESPA changes 1-1-10 - 12/21/09 10:24 PM
Dan, just saw your question. I guess I would consider the subordination fee a title charge because title work is all about establishing the desired lien position. If we are considering a first mortgage loan, which is most of our business, we would not proceed if there were an intervening lien unless it were subordinated or paid off. Same would be true of an equity loan where we expected to be in second position and there was an existing lien that would put us in third without a subordination.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/21/09 11:11 PM
Originally Posted By: Dan Persfull
Originally Posted By: qualitycontrol1
Does anyone out there have a form they are using for the providers list that they'd like to share???
The Regulatory Screwed Over Bank regularly uses the following Service Providers to provide their specific services for real estate related loans. The Regulatory Screwed Over Bank does not specifically endorse these providers and the list is being provided to you in accordance with RESPA 3500.7 and the instructions in Appendix C of HUD’s Regulation X RESPA.
You are under no obligation to choose the providers shown and are free to choose your own provider as long as they are properly licensed and they regularly perform the required service.
This list is controlled and maintained by the manager of The Regulatory Screwed Over Bank's mortgage loan department. This list is current as of January 2, 2010.
Dan this is too funny!!!
On a serious note, the written provider list under new Reg. X is for companies/persons that provide settlement services that we will allow the customers to shop for. The "required use" disclosure goes away with new rule. You are not required to give a list for settlement services that the creditor requires but does not permit the consumer to shop for. I'm wondering about your saying "regularly uses the following Service Providers." I'm also wondering whether you need to say anything about the list being controlled and maintained by the manager of the mortgage dept.
I made some changes to the sample wording you posted. Any comments or suggestions?
"The ABC Bank allows you to shop for certain settlement services. The attached list contains the names of service providers that you may choose to use. The ABC Bank does not specifically endorse these providers and the list is being provided to you in accordance with section 3500.7 of HUD’s Regulation X (RESPA) and the instructions in Appendix C of the regulation.
You are under no obligation to choose the providers shown and are free to choose your own provider. This list is current as of January 2, 2010."
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 12/22/09 09:23 AM
Originally Posted By: nelender
Dan, just saw your question. I guess I would consider the subordination fee a title charge because title work is all about establishing the desired lien position. If we are considering a first mortgage loan, which is most of our business, we would not proceed if there were an intervening lien unless it were subordinated or paid off. Same would be true of an equity loan where we expected to be in second position and there was an existing lien that would put us in third without a subordination.
I agree with Dan, this would be an orgination charge as it is a specific requirement of the lender to ensure the lenders position. It does not fall within the defiition of a title service.
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/22/09 12:46 PM
Originally Posted By: Runreb
Any thoughts here or how you are handling prequals>>>>>>>>>>
Originally Posted By: Runreb
Regarding prequalifications where you have five pieces of info, but not the property address, are you continuing to mail the individual the same prequal. letter as you did prior to the new RESPA changes? What disclosures (notice to home loan app., credit score discl., right to receive copy of appraisal, servicing discl., affiliated business,etc.) do you send with the prequal. letter? Also, do you phrase it something to the effect of: You are pre-qualified for a loan in the amount of $xxxxxxxx. This is based on a 30 year fixed rate at the current rate of 6.00%. The estimated principal and interest payments would be$xxx. The following documents are required to process the file after we receive your intent to proceed... then list all of the enclosed disclosures plus note income and asset verifications, etc. will be needed following intent.
Thanks!
Thanks!
Why don't you just put what they qualify (the amount) on a piece of paper. Don't do a GFE until they have a property address.
Thanks Dan for the laugh. This is all crazy.
Posted By: ComplianceAsst
Re: RESPA changes 1-1-10 - 12/22/09 01:54 PM
Does anyone know what block real estate taxes that are due go on the new GFE?
Posted By: Mr. E.
Re: RESPA changes 1-1-10 - 12/22/09 02:18 PM
I'm stuck on the issue of how to list paying the borrowers third party fees. If I want to pay for their Credit Bureau, I know I have to list the fee in box 3 as a charge. However, box 2 doesn't seem to be an appropriate place to credit this. Box 2 deals with points and YSP. Box 2 doesn't have a place for fees. Shouldn't the credit for a 3rd party fee be documented on the HUD and not the GFE?
Posted By: SherylB
Re: RESPA changes 1-1-10 - 12/22/09 02:19 PM
Do I include the first lienholder's fees (purchase money) on my good faith estimate when preparing my good faith for a second lien purchase money (borrower's equity contribution)? Both loans will be reflected on one HUD-1. An appraisal is not required on our second lien, however, one is needed on the first lien, of which we will get a copy to back-up our in-house evaluation. The appraisal fee is on the HUD-1. Should I reflect this as "POC", since it is not required on our loan? I have the same issue with the survey. We are not requiring, but one was obtained for the first lien and we are getting a copy.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/22/09 02:26 PM
HUD is so helpful... you shoot them an email to further explain an a FAQ, or build on one, and they simply shoot back " as explained in the FAQ #22..." and just cut and paste the FAQ back to you... that is helpful.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 12/22/09 02:46 PM
You have to realize that the people answering the phones cannot intrepret the regulations. If it is not part of their script - that is the type of answer that you will probably get.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/22/09 03:21 PM
Originally Posted By: Dan Persfull
I didn't listen to any of the HUD presentations. From what I'm hearing I'm glad I didn't.
From page 22 of the 11/19/09 FAQs:
3) Q: Can the charge shown on the GFE, Block 1, ―Our origination charge‖, increase after the GFE has been issued?
A: No. Block 1, ―Our origination charge‖ cannot increase unless there is a ―changed circumstance‖ as defined in 24 CFR § 3500.2.
To me this plainly states that Block 1 can change in relation to a qualified changed circumstance, however keep in mind that only the charges shown in Block 1 that are affected by the changed circumstance can change.
What I'm most concerned about is page 23 Q&A #4. If we have stated a credit in bullet #2 in block 2 does that asinine answer apply unless the rate and credit are reduced together? We don't have "no cost" loans but I'm concerned they will try to apply that answer to any credit shown in Block 2.
As a lender, we are considering just using the first bullet point in Block 2 for all our loans (even the ones that pay points to buy down the rate) with the exception of our FHA and VA loans because we are a correspondent and fall under the broker definition for those loans.
From page 22 of the 11/19/09 FAQs:
3) Q: Can the charge shown on the GFE, Block 1, ―Our origination charge‖, increase after the GFE has been issued?
A: No. Block 1, ―Our origination charge‖ cannot increase unless there is a ―changed circumstance‖ as defined in 24 CFR § 3500.2.
To me this plainly states that Block 1 can change in relation to a qualified changed circumstance, however keep in mind that only the charges shown in Block 1 that are affected by the changed circumstance can change.
What I'm most concerned about is page 23 Q&A #4. If we have stated a credit in bullet #2 in block 2 does that asinine answer apply unless the rate and credit are reduced together? We don't have "no cost" loans but I'm concerned they will try to apply that answer to any credit shown in Block 2.
As a lender, we are considering just using the first bullet point in Block 2 for all our loans (even the ones that pay points to buy down the rate) with the exception of our FHA and VA loans because we are a correspondent and fall under the broker definition for those loans.
Dan, what concerns me about their prescribed usage of first bullet, block 2 is that they state it can only be checked by the lender
Quote:
if no additional charges or credits apply.
Posted By: Bville
Re: RESPA changes 1-1-10 - 12/22/09 03:43 PM
Spending the morning reading the new Settlement Cost Booklet. On page 25 it says "Line 1102 is the amount of the settlement or closing fee if performed by a company different from the one providing title insurance. This charge is part of the charge listed in Line 1101."
This is the first time I've read anything about separating out the closing fee only if two different companies are used. I thought we always itemized the amount of the closing fee.
This is the first time I've read anything about separating out the closing fee only if two different companies are used. I thought we always itemized the amount of the closing fee.
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 12/22/09 03:43 PM
SherylB - check out the FAQ of 11/19 - page 6 Q#11. Looks like you need a separate GFE AND a separate HUD-1. No longer will you combine both onto one.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/22/09 03:50 PM
Originally Posted By: Just Jay
Or lenders have attached a mortgage to an auto loan... I am not so worried about the recording fees as I am about the 200-250 charge the lender is charging us to review it.
Per HUD's 'plain english' garbage: Block 1 fees CANNOT change, even with a changed circumstance. The exception being: if the loan amount changes and a portion of the origination charge is a percentage of the loan amount or the overall loan program changes.
This leads me to believe that when the title comes back on that refi and we need to the other bank to review and subordinate, where can I put that fee?
Per HUD's 'plain english' garbage: Block 1 fees CANNOT change, even with a changed circumstance. The exception being: if the loan amount changes and a portion of the origination charge is a percentage of the loan amount or the overall loan program changes.
This leads me to believe that when the title comes back on that refi and we need to the other bank to review and subordinate, where can I put that fee?
bump
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 12/22/09 04:26 PM
As far as provider lists: if they are in blocks 4, 5, or 6 and we let them shop, we must provide them a list. Doesn't this mean that any service for which we provide a list will end up in block 6 as that is labelled "required services that you can shop for"?
Posted By: kristin09
Re: RESPA changes 1-1-10 - 12/22/09 05:19 PM
I am getting really caught up with the rate lock fee problem. We can't take a fee check until after the GFE is issued and there is intent to proceed so when we initially issue the GFE, we will have to do it without the rate lock fee in the origination charge. However, if the borrower gives us a fee check (including rate lock fee) within 10 bus. days, we are allowed to change the interest-related charges so can we change the origination charge to reflect the rate lock fee on the revised GFE? I am getting caught between HUD saying that you can't change origination charges and the Q and A saying that you can. Plus, a rate lock fee is an interest-related charge.
Any thoughts/suggestions?
Any thoughts/suggestions?
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/22/09 05:20 PM
Quote:
I made some changes to the sample wording you posted. Any comments or suggestions?
"The ABC Bank allows you to shop for certain settlement services. The attached list contains the names of service providers that you may choose to use. The ABC Bank does not specifically endorse these providers and the list is being provided to you in accordance with section 3500.7 of HUD’s Regulation X (RESPA) and the instructions in Appendix C of the regulation.
"The ABC Bank allows you to shop for certain settlement services. The attached list contains the names of service providers that you may choose to use. The ABC Bank does not specifically endorse these providers and the list is being provided to you in accordance with section 3500.7 of HUD’s Regulation X (RESPA) and the instructions in Appendix C of the regulation.
This looks fine to me. I just took our present form and changed a couple of things. Although you are not required to list your relationship any longer there is no prohibition from doing so that I'm aware of. I basically took the path of least resistance.
I would suggest however informing them the provider they choose must be licensed and regularly perform the service, otherwise they bring in Uncle Jed as their provider. But this is only a suggestion.
Posted By: Colleen
Re: RESPA changes 1-1-10 - 12/22/09 05:31 PM
Compliance Asst
Did you get a response to your question regarding where to put property taxes on the GFE?
Did you get a response to your question regarding where to put property taxes on the GFE?
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/22/09 05:37 PM
Quote:
Dan, what concerns me about their prescribed usage of first bullet, block 2 is that they state it can only be checked by the lender
With the exception of the few FHA and VA loans we process we are the lender. For FHA and VA we are a correspondent, for now anyway.
From Appendix C for Block 2:
For transactions without a mortgage broker, the lender may choose not to separately disclose in this block any credit or charge for the interest rate chosen on the loan; however, if this block does not include any positive or negative figure, the lender must check the first box to indicate that "The credit or charge for the interest rate you have chosen" is included in "Our origination charge" above (see Block 1 instructions above), must insert the interest rate, and must also insert "0" in Block 2. Only one of the boxes may be checked; a credit and charge cannot occur together in the same transaction.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/22/09 05:57 PM
Originally Posted By: Dan Persfull
This looks fine to me. I just took our present form and changed a couple of things. Although you are not required to list your relationship any longer there is no prohibition from doing so that I'm aware of. I basically took the path of least resistance.
I would suggest however informing them the provider they choose must be licensed and regularly perform the service, otherwise they bring in Uncle Jed as their provider. But this is only a suggestion.
I would suggest however informing them the provider they choose must be licensed and regularly perform the service, otherwise they bring in Uncle Jed as their provider. But this is only a suggestion.
Thanks Dan, I appreciate your input.
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 12/22/09 06:33 PM
HUD's Answers To Some Questions - I've posted these outside of this long thread:
1) RE: Can Block 1 Change - discrepancy between FAQ and Plain English Slides: http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1311522#Post1311522
2) Re: Escrow Waiver Fee: http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1309777#Post1309777
I hope this isn't considered double posting, but for search purposes, I thought it might be helpful to have those outside of this long thread to find.
1) RE: Can Block 1 Change - discrepancy between FAQ and Plain English Slides: http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1311522#Post1311522
2) Re: Escrow Waiver Fee: http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1309777#Post1309777
I hope this isn't considered double posting, but for search purposes, I thought it might be helpful to have those outside of this long thread to find.
Posted By: SherylB
Re: RESPA changes 1-1-10 - 12/22/09 08:05 PM
Found it!!
Thanks so much!
Sheryl
Thanks so much!
Sheryl
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/22/09 08:16 PM
Originally Posted By: ComplianceAsst
Does anyone know what block real estate taxes that are due go on the new GFE?
RE Taxes do not show up on the new GFE.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/22/09 08:26 PM
Originally Posted By: Dan Persfull
Quote:
Dan, what concerns me about their prescribed usage of first bullet, block 2 is that they state it can only be checked by the lender
With the exception of the few FHA and VA loans we process we are the lender. For FHA and VA we are a correspondent, for now anyway.
From Appendix C for Block 2:
For transactions without a mortgage broker, the lender may choose not to separately disclose in this block any credit or charge for the interest rate chosen on the loan; however, if this block does not include any positive or negative figure, the lender must check the first box to indicate that "The credit or charge for the interest rate you have chosen" is included in "Our origination charge" above (see Block 1 instructions above), must insert the interest rate, and must also insert "0" in Block 2. Only one of the boxes may be checked; a credit and charge cannot occur together in the same transaction.
Right, I understand, but if you charge discount points, what I don't get is when they say you can only check the first box IF no additional charges or credits apply.
If you have discount points, are you going to show that in the origination charge, rather than in box 3? Discount points aren't a charge designated AS an origination charge, so I'm skeptical on this.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/22/09 08:40 PM
We are putting it into the origination charge.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/22/09 09:18 PM
Quote:
what I don't get is when they say you can only check the first box IF no additional charges or credits apply
Where is this coming from? The FAQs or Appendix C?
Posted By: MarieR
Re: RESPA changes 1-1-10 - 12/22/09 09:26 PM
I am suffering from RESPA burnout so I apologize if this doesn't flow correctly.
Important Date Section question- I am trying to figure out what dates/numbers to put in this section for a secondary market loan that the rate has not been locked at the time the GFE is issued. I know that I have to put a number of days in line 3 (go to settlement within xx days of rate lock), but would I use the same number in line 4 (you must lock rate xx days before settlement)?
This is my logic- If you have to go to settlement within xx days of the rate lock then wouldn't you have to lock the rate within the same number of days before settlement?
Please set me straight if this is not correct- thanks for your help.
Important Date Section question- I am trying to figure out what dates/numbers to put in this section for a secondary market loan that the rate has not been locked at the time the GFE is issued. I know that I have to put a number of days in line 3 (go to settlement within xx days of rate lock), but would I use the same number in line 4 (you must lock rate xx days before settlement)?
This is my logic- If you have to go to settlement within xx days of the rate lock then wouldn't you have to lock the rate within the same number of days before settlement?
Please set me straight if this is not correct- thanks for your help.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/22/09 11:17 PM
Originally Posted By: FlamingoGal
HUD's Answers To Some Questions - I've posted these outside of this long thread:
1) RE: Can Block 1 Change - discrepancy between FAQ and Plain English Slides: http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1311522#Post1311522
2) Re: Escrow Waiver Fee: http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1309777#Post1309777
I hope this isn't considered double posting, but for search purposes, I thought it might be helpful to have those outside of this long thread to find.
1) RE: Can Block 1 Change - discrepancy between FAQ and Plain English Slides: http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1311522#Post1311522
2) Re: Escrow Waiver Fee: http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1309777#Post1309777
I hope this isn't considered double posting, but for search purposes, I thought it might be helpful to have those outside of this long thread to find.
FlamingoGal thanks for posting this here. Can I ask what e-mail address are you sending your questions to? I've sent some questions on different dates to hsg-respa@hud.gov and have only gotten one reply. They replied to me pointing out a problem with a link on the RESPA page. If you are using a different e-mail address and don't want to post it here, would you please send me a PM? Thank you.
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 12/22/09 11:22 PM
[quote]FlamingoGal thanks for posting this here. Can I ask what e-mail address are you sending your questions to? I've sent some questions on different dates to hsg-respa@hud.gov and have only gotten one reply. They replied to me pointing out a problem with a link on the RESPA page. If you are using a different e-mail address and don't want to post it here, would you please send me a PM? Thank you.[/quote]
That is the same email address I'm sending my questions to. I think I'm up to maybe 10-15 questions, and I've received 3 replies so far.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/22/09 11:25 PM
Okay, thanks.
Posted By: Runreb
Re: RESPA changes 1-1-10 - 12/23/09 12:41 AM
Provider List
If bank requires the closing of home purchase loans to be closed at an attorney's office (attorney prepares HUD form and closing of the loan) and we permit the borrower to choose the attorney, then, we MUST provide a Settlement Services Provider List [of attorneys] on purchases. Is my understanding correct?
Thanks
If bank requires the closing of home purchase loans to be closed at an attorney's office (attorney prepares HUD form and closing of the loan) and we permit the borrower to choose the attorney, then, we MUST provide a Settlement Services Provider List [of attorneys] on purchases. Is my understanding correct?
Thanks
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/23/09 03:14 AM
Correct...BUT, and this is a big but...the list does not have to be all inclusive or even have more than one name on it. If you are using a cost quote from a specific attorney, he's the only one that has to be on your list. Think about it. If the borrowers choose him, your GFE is correct. If you have three names on your list and they choose another attorney with a higher fee and it's out of the tolerance, you eat the difference. If they choose someone not on your 'list' there is no longer a tolerance that has to be met.
This has been discussed on this thread a few times before and was also a point addressed on the HUD presentation two weeks ago.
This has been discussed on this thread a few times before and was also a point addressed on the HUD presentation two weeks ago.
Posted By: shea930
Re: RESPA changes 1-1-10 - 12/23/09 12:59 PM
Originally Posted By: shea930
We have our attorney do title exam, prepare HUD, and prepare mortgage for us. Would the fee for them to prepare the mortgage go in Block 1 or Block 4? HUD's Q & A if you look under Block 1 question (6)and HUD-1 - 1100 series question (3) they totally contradict each other.
bump
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/23/09 01:09 PM
::fingers crossed::
LOS hotpatch going on the test server this morning...
LOS hotpatch going on the test server this morning...
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/23/09 01:29 PM
nix that... no hotpatch avaialable... LOS website mentioning Dec 24th, tentatively
::revising LO/processor training to complete forms by hand::
::revising LO/processor training to complete forms by hand::
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/23/09 02:47 PM
gotta love that. We'll be down to the 11th hour and no testing the way it's going.
Posted By: AuditorK
Re: RESPA changes 1-1-10 - 12/23/09 02:50 PM
One of our tellers is a notary public. We utilize her services for loan closings that do not require an attorney. Am I correct that these notary fees should be listed in Block 4 - Title Services and Lender's Title Insurance? We charge the borrowers a notary fee and the employee that does the notary work is paid 100% of the fee collected. This is over and above her normal salary.
Do we need to do anything as far as listing her on an Affiliated Business Arrangement disclosure?
Are there any Section 8 issues here?
Do we need to do anything as far as listing her on an Affiliated Business Arrangement disclosure?
Are there any Section 8 issues here?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/23/09 02:56 PM
Originally Posted By: David Dickinson
Originally Posted By: ComplianceAsst
Does anyone know what block real estate taxes that are due go on the new GFE?
RE Taxes do not show up on the new GFE.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/23/09 03:02 PM
yep...I think you got it! Merry Christmas and a very scary New Year this year, right?
Posted By: ComplianceAsst
Re: RESPA changes 1-1-10 - 12/23/09 03:45 PM
Thank you David.
Posted By: ComplianceAsst
Re: RESPA changes 1-1-10 - 12/23/09 03:47 PM
Originally Posted By: Colleen
Compliance Asst
Did you get a response to your question regarding where to put property taxes on the GFE?
Did you get a response to your question regarding where to put property taxes on the GFE?
Yes Colleen, RE Taxes do not show up on the new GFE.
Posted By: MarieR
Re: RESPA changes 1-1-10 - 12/23/09 03:53 PM
Originally Posted By: MarieR
I am suffering from RESPA burnout so I apologize if this doesn't flow correctly.
Important Date Section question- I am trying to figure out what dates/numbers to put in this section for a secondary market loan that the rate has not been locked at the time the GFE is issued. I know that I have to put a number of days in line 3 (go to settlement within xx days of rate lock), but would I use the same number in line 4 (you must lock rate xx days before settlement)?
This is my logic- If you have to go to settlement within xx days of the rate lock then wouldn't you have to lock the rate within the same number of days before settlement?
Please set me straight if this is not correct- thanks for your help.
Important Date Section question- I am trying to figure out what dates/numbers to put in this section for a secondary market loan that the rate has not been locked at the time the GFE is issued. I know that I have to put a number of days in line 3 (go to settlement within xx days of rate lock), but would I use the same number in line 4 (you must lock rate xx days before settlement)?
This is my logic- If you have to go to settlement within xx days of the rate lock then wouldn't you have to lock the rate within the same number of days before settlement?
Please set me straight if this is not correct- thanks for your help.
Any thoughts?
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/23/09 04:00 PM
Originally Posted By: MarieR
Originally Posted By: MarieR
I am suffering from RESPA burnout so I apologize if this doesn't flow correctly.
Important Date Section question- I am trying to figure out what dates/numbers to put in this section for a secondary market loan that the rate has not been locked at the time the GFE is issued. I know that I have to put a number of days in line 3 (go to settlement within xx days of rate lock), but would I use the same number in line 4 (you must lock rate xx days before settlement)?
This is my logic- If you have to go to settlement within xx days of the rate lock then wouldn't you have to lock the rate within the same number of days before settlement?
Please set me straight if this is not correct- thanks for your help.
Important Date Section question- I am trying to figure out what dates/numbers to put in this section for a secondary market loan that the rate has not been locked at the time the GFE is issued. I know that I have to put a number of days in line 3 (go to settlement within xx days of rate lock), but would I use the same number in line 4 (you must lock rate xx days before settlement)?
This is my logic- If you have to go to settlement within xx days of the rate lock then wouldn't you have to lock the rate within the same number of days before settlement?
Please set me straight if this is not correct- thanks for your help.
Any thoughts?
This is what we are doing:
#1. We are putting the next day date and 10:00 AM
2. We are putting the date that will be 10 business days out.
3. We are putting 45 days
4. On loans that are floating it will be 7 days; if the rate was locked we will leave that block blank.
THIS IS FOR OUR FREDDIE MAC LOANS.
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/23/09 04:19 PM
Originally Posted By: rlcarey
Originally Posted By: nelender
Dan, just saw your question. I guess I would consider the subordination fee a title charge because title work is all about establishing the desired lien position. If we are considering a first mortgage loan, which is most of our business, we would not proceed if there were an intervening lien unless it were subordinated or paid off. Same would be true of an equity loan where we expected to be in second position and there was an existing lien that would put us in third without a subordination.
I agree with Dan, this would be an orgination charge as it is a specific requirement of the lender to ensure the lenders position. It does not fall within the defiition of a title service.
It was hard to convince my people that this fee was an origination charge and not a title charge.
Dan mentions a changed circumstance but even if that came about through the title company - if it's part of the origination charge or should have been we couldn't change Block 1 anyhow.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/23/09 04:28 PM
Originally Posted By: Truffle Royale
Originally Posted By: David Dickinson
Originally Posted By: ComplianceAsst
Does anyone know what block real estate taxes that are due go on the new GFE?
RE Taxes do not show up on the new GFE.
Are you suggesting listing the real estate taxes as poc on the HUD still?
Posted By: NanciT
Re: RESPA changes 1-1-10 - 12/23/09 04:29 PM
I just submitted these questions to HUD and will let you know i I get a response, but am wondering what other lenders are doing in terms of re-accepting GFEs on a borrower where they previously rejected a GFE. Here are the questions I sent:
* If a lender does not accept a broker GFE, and then, after the GFE expires, receives a second GFE from the broker on the same borrower, may the lender accept the subsequent GFE? In this situation, does HUD have any expectation that the lender will attempt to determine whether the customer expressed an intent to continue on the first GFE within the original 10 business day period? For example:
Jan 4 - Customer application taken by broker
Jan 5 - GFE #1 given to customer by broker
Jan 6 - Lender rejects GFE (for example, because no transfer taxes are estimated)
Jan 21 - Lender receives GFE #2 on same borrower/property (which includes transfer taxes) - can lender accept GFE #2?
* If a broker issues a GFE to a customer who expresses an intent to move forward with the application before the GFE expires, but the broker is unable to find a lender who will accept the GFE, what does the broker need to do to comply with RESPA if it wants to help the customer obtain a loan? Can a broker deny the loan anticipated by the original GFE, and then issue a second GFE to the customer and submit it to a lender?
* If a lender does not accept a broker GFE, and then, after the GFE expires, receives a second GFE from the broker on the same borrower, may the lender accept the subsequent GFE? In this situation, does HUD have any expectation that the lender will attempt to determine whether the customer expressed an intent to continue on the first GFE within the original 10 business day period? For example:
Jan 4 - Customer application taken by broker
Jan 5 - GFE #1 given to customer by broker
Jan 6 - Lender rejects GFE (for example, because no transfer taxes are estimated)
Jan 21 - Lender receives GFE #2 on same borrower/property (which includes transfer taxes) - can lender accept GFE #2?
* If a broker issues a GFE to a customer who expresses an intent to move forward with the application before the GFE expires, but the broker is unable to find a lender who will accept the GFE, what does the broker need to do to comply with RESPA if it wants to help the customer obtain a loan? Can a broker deny the loan anticipated by the original GFE, and then issue a second GFE to the customer and submit it to a lender?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/23/09 04:40 PM
Paying the taxes current has always been a requirement of getting the loan. It also shows up as a requirement on the title insurance. I'm thinking that somehow, somewhere, paying the taxes has to be addressed. If it isn't on the HUD as either paid at closing or POC, how do we fill the requirement for the title insurance to be issued?
Posted By: NanciT
Re: RESPA changes 1-1-10 - 12/23/09 04:47 PM
Originally Posted By: NanciT
Is it possible to hold the mortgage broker responsible for fees that are understated on the GFE which then fall outside the 10% tolerance on the HUD-1? If the broker is just plain wrong about the fee, the lender accepts the GFE and there is no subsequent changed circumstances that allow reissuance of the GFE, is the lender left holding the bag? The following FAQ seems to indicate that the lender cannot deduct the "mistake" from the broker's compensation but perhaps someone has a way around this? I appreciate anyone's input!!!
6) Q: If a loan originator pressures a settlement agent to reduce their charges or to ‗cover the difference‘ to bring the costs into compliance with the tolerances, is that considered a violation of RESPA Section 8(a)?
A: If a loan originator (or other settlement service provider) pressures a settlement agent (or other settlement service provider) to reduce their charges or otherwise ‗cover the difference‘ to bring the costs into compliance with the tolerances as a condition of receiving future referrals of business, it may be considered a potential violation of RESPA Section 8(a). Please contact the Office of RESPA and ILS to file a complaint.
6) Q: If a loan originator pressures a settlement agent to reduce their charges or to ‗cover the difference‘ to bring the costs into compliance with the tolerances, is that considered a violation of RESPA Section 8(a)?
A: If a loan originator (or other settlement service provider) pressures a settlement agent (or other settlement service provider) to reduce their charges or otherwise ‗cover the difference‘ to bring the costs into compliance with the tolerances as a condition of receiving future referrals of business, it may be considered a potential violation of RESPA Section 8(a). Please contact the Office of RESPA and ILS to file a complaint.
I meant to update my earlier post with a response that we did get back from HUD. RR Joker's comment about the referral language turned out to be correct. This is what HUD staff said:
RESPA Section 3500.7(i) states that “If any charges at settlement exceed the charges listed on the GFE by more than the permitted tolerances, the loan originator may cure the tolerance violation by reimbursing to the borrower the amount by which the tolerance was exceeded…” RESPA does not govern lender-broker agreements as long as the agreement does not violate Section 8.
While this Office may revisit this issue in the future, at this time, we do not anticipate that lenders that require brokers to reimburse lenders for tolerance violations will be in violation of Section 8 solely due to requiring reimbursement.
Posted By: ComplianceAsst
Re: RESPA changes 1-1-10 - 12/23/09 04:48 PM
Originally Posted By: Truffle Royale
Paying the taxes current has always been a requirement of getting the loan. It also shows up as a requirement on the title insurance. I'm thinking that somehow, somewhere, paying the taxes has to be addressed. If it isn't on the HUD as either paid at closing or POC, how do we fill the requirement for the title insurance to be issued?
It does go on the HUD, just not the GFE. It's something that needs to be paid, but it's not a "cost/fee" associated with getting the loan. That's how I'm looking at it anyway.
Posted By: todd cook
Re: RESPA changes 1-1-10 - 12/23/09 05:06 PM
I am feeling like a dummy, but what are "tax services" as used in block 3?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/23/09 05:28 PM
Originally Posted By: Truffle Royale
Paying the taxes current has always been a requirement of getting the loan. It also shows up as a requirement on the title insurance. I'm thinking that somehow, somewhere, paying the taxes has to be addressed. If it isn't on the HUD as either paid at closing or POC, how do we fill the requirement for the title insurance to be issued?
We never listed the Taxes as poc until the FDIC got uppity about back in '05. Nothing that I have seen in the rules or appendixes, or even HUD's examples show it being assessed onto the backside of the HUD.
If the taxes came due and have been paid, that will show on the title. If the taxes are not yet due, how will that slow down the titlework?? If taxes are due or outstanding and have yet to be paid, then they would be rolled into the loan and paid out of proceeds, and therefore listed on the front.
I don't think I am understanding your concerns...
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/23/09 05:39 PM
I wasn't concerned until whoever brought up the question back a few posts. Now I'm wondering. Let's just stick with taxes that have to be paid at closing. As I understand it, you can't show it on the GFE but you're going to show it on the HUD, right. By saying "rolled into loan and paid out of proceeds" you don't mean finance the money for taxes, do you?
Sorry. Panic is setting in for me. If I could just get my hands on our software to test this I'm sure it would make a lot more sense to me. I always test out as visual.
Sorry. Panic is setting in for me. If I could just get my hands on our software to test this I'm sure it would make a lot more sense to me. I always test out as visual.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/23/09 05:43 PM
Only if they are owing for back taxes, and that is what part of the refi is for, if a refi.
Are you trying to hone in on this time of year specifially?
I guess I am alloking at it from an overall standpoint, but I agree, if not required to be listed on the GFE, and not required to close the loan i.e mid year when they are not due, then no, I do not feel you nee dto list the prior years taxes as poc on the hud.
Are you trying to hone in on this time of year specifially?
I guess I am alloking at it from an overall standpoint, but I agree, if not required to be listed on the GFE, and not required to close the loan i.e mid year when they are not due, then no, I do not feel you nee dto list the prior years taxes as poc on the hud.
Posted By: ComplianceAsst
Re: RESPA changes 1-1-10 - 12/23/09 05:56 PM
Originally Posted By: todd cook
I am feeling like a dummy, but what are "tax services" as used in block 3?
For borrowers with impound accounts the tax service agency's job is to provide the lender with the borrowers property tax bills so that they will be paid on time. For borrowers without impound accounts, the company will often remit any unpaid property taxes on behalf of the homeowner and then bill him or her for the sum, plus penalties and fees.
Posted By: river girl
Re: RESPA changes 1-1-10 - 12/23/09 06:19 PM
I have read all the postings on optical credit life where the premium is not paid up front, but added to the monthly P&I pymt.
Here goes....
I will not list the insurance on the GFE but if I know the borrower wants the insurance before I issue the GFE, I will include the monthly premium in the P&I pymt listed in 2 areas: summary of your loan and escor account information.
We only use HUD-1a so I will list one years premium in line 904 even though we do not require it to be paid up front - it is rolled into the loan amount.
And the fee does not get pulled from line 904 on the HUD1a into the comparison chart.
Is this right?
Here goes....
I will not list the insurance on the GFE but if I know the borrower wants the insurance before I issue the GFE, I will include the monthly premium in the P&I pymt listed in 2 areas: summary of your loan and escor account information.
We only use HUD-1a so I will list one years premium in line 904 even though we do not require it to be paid up front - it is rolled into the loan amount.
And the fee does not get pulled from line 904 on the HUD1a into the comparison chart.
Is this right?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/23/09 06:40 PM
If they are doing the work for the bank, I believe it goes in Block 1, but I understand the confusion from the FAQs you cite. Also, remember you cannot charge for preparing the HUD-1 (or any RESPA or TIL documents).
Posted By: Bville
Re: RESPA changes 1-1-10 - 12/23/09 07:03 PM
Are we still waiting for more guidance from HUD on how to show Credit Insurance on the Settlement Statement?
I had it in my mind we would put it in the 900 series, but our software (Laser Pro) will only allow services required by the bank in that series. So I'm thinking we'll have to put in the 1300 series.
I had it in my mind we would put it in the 900 series, but our software (Laser Pro) will only allow services required by the bank in that series. So I'm thinking we'll have to put in the 1300 series.
Posted By: Iszy_theBug
Re: RESPA changes 1-1-10 - 12/23/09 07:17 PM
I have two questions:
1) If a customer brings their own attorney to the closing to review the closing docs...would the attorney's fee be a "Settlement Service"? The attorney was not required by the bank. The customers did it for their own piece of mind.
2) If flood insurance is required...does this estimate go under Block 11-Homeowner's insurance on the GFE?
Thanks!
1) If a customer brings their own attorney to the closing to review the closing docs...would the attorney's fee be a "Settlement Service"? The attorney was not required by the bank. The customers did it for their own piece of mind.
2) If flood insurance is required...does this estimate go under Block 11-Homeowner's insurance on the GFE?
Thanks!
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/23/09 07:21 PM
We have it in 904 (unless we find out otherwise with our vendor!).
904 = Items required by lender to be paid in Advance..okay, so...are these required items that must be paid in advance, or,
are they items, that are required to be paid in advance.
1300 - Required services that you can shop for.
They seem to be using this as a "catch-all". Required services and everything else that didn't fit anywhere else!
I think you are potentially safe in either spot when all is said and done.
904 = Items required by lender to be paid in Advance..okay, so...are these required items that must be paid in advance, or,
are they items, that are required to be paid in advance.
1300 - Required services that you can shop for.
They seem to be using this as a "catch-all". Required services and everything else that didn't fit anywhere else!
I think you are potentially safe in either spot when all is said and done.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/23/09 08:00 PM
Originally Posted By: Bville
Are we still waiting for more guidance from HUD on how to show Credit Insurance on the Settlement Statement?
I had it in my mind we would put it in the 900 series, but our software (Laser Pro) will only allow services required by the bank in that series. So I'm thinking we'll have to put in the 1300 series.
I had it in my mind we would put it in the 900 series, but our software (Laser Pro) will only allow services required by the bank in that series. So I'm thinking we'll have to put in the 1300 series.
I don't think there's any need for guidance on this one. Appendix A (the line-by-line instructions on how to fill out the HUD-1/1A) clearly states it goes in the 900s. I'd be on the phone with Laser Pro.
Posted By: river girl
Re: RESPA changes 1-1-10 - 12/23/09 08:23 PM
do we list only the monthly premium amount on line 904 or the entire premium for the product?
Does it get carried over to the charges that can change tolerance chart?
Does it get carried over to the charges that can change tolerance chart?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/23/09 08:42 PM
Originally Posted By: David Dickinson
Originally Posted By: Bville
Are we still waiting for more guidance from HUD on how to show Credit Insurance on the Settlement Statement?
I had it in my mind we would put it in the 900 series, but our software (Laser Pro) will only allow services required by the bank in that series. So I'm thinking we'll have to put in the 1300 series.
I had it in my mind we would put it in the 900 series, but our software (Laser Pro) will only allow services required by the bank in that series. So I'm thinking we'll have to put in the 1300 series.
I don't think there's any need for guidance on this one. Appendix A (the line-by-line instructions on how to fill out the HUD-1/1A) clearly states it goes in the 900s. I'd be on the phone with Laser Pro.
David, I agree it should go in the 900 section...but the line-by-line appears, at least to me, to be talking about MIP..not optional CL. Do you see it differently, or all inclusive some how?
Posted By: stella
Re: RESPA changes 1-1-10 - 12/23/09 09:51 PM
we currently have borrowers sign a form we call the "required service providers" form which tells them who their appraiser, flood company, PMI company, etc. are going to be. Is this a form we no longer need with the RESPA changes?
Thanks!
Thanks!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/23/09 09:55 PM
Originally Posted By: RR joker
David, I agree it should go in the 900 section...but the line-by-line appears, at least to me, to be talking about MIP..not optional CL. Do you see it differently, or all inclusive some how?
Line 904: These lines are also used to list amounts paid at settlement for insurance not required by the Lender.
That sure sounds like optional CL to me.
Quote:
do we list only the monthly premium amount on line 904 or the entire premium for the product?
Does it get carried over to the charges that can change tolerance chart?
Does it get carried over to the charges that can change tolerance chart?
List the amount do at closing as the line item instructions states. It will not be listed on the GFE, so it's not a tolerance issue.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/23/09 10:01 PM
Originally Posted By: stella
we currently have borrowers sign a form we call the "required service providers" form which tells them who their appraiser, flood company, PMI company, etc. are going to be. Is this a form we no longer need with the RESPA changes?
Thanks!
Thanks!
Nope - no longer. Now, if you give them the right to choose a service provider, you must give them a list of "recommended providers". See the FAQs for the guidance.
Posted By: river girl
Re: RESPA changes 1-1-10 - 12/23/09 11:14 PM
I just found out that if we use a limited appraisal - we collect the fee up front (after MDIA and GFE given) and then if the loan funds, we refund the money through either a cashier check or a deposit into the borrowers checking account.
Would it just be listed p.o.c. on line 804?
Would it just be listed p.o.c. on line 804?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/23/09 11:20 PM
If you collect the fee outside of closing, then it is listed POC on the Settlement Statement. If you are refunding the money, you show that in the 200s.
Posted By: river girl
Re: RESPA changes 1-1-10 - 12/23/09 11:51 PM
Thanks David
Does that mean we have to use the HUD 1 for a loan where we reimburse the appraisal fee ?
We only have the HUD1a programmed in our system. That will make some programmers really happy. HAHA
Does that mean we have to use the HUD 1 for a loan where we reimburse the appraisal fee ?
We only have the HUD1a programmed in our system. That will make some programmers really happy. HAHA
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/24/09 12:25 AM
OTI Dead Horse Alert!!!
The HUD plain english pony show states on page 15 "all charges are subject to tolerance threshold, regardless of whether there is a credit for that fee at closing by the seller, realtor or loan originator."
Page three of the GFE states that OTI can change at settlement if the borrower does not use the people we identify, thus have no tolerance limits.
Here, the sellers choose and pay for the OTI, as stipulated in the purchase contracts 99% of the time.
My interp was that since this the case, in this event the OTI would not then be subject to any tolerance, but the HUD statement seems to cloud that up. Am I reading too much into this or confusing something here?
The HUD plain english pony show states on page 15 "all charges are subject to tolerance threshold, regardless of whether there is a credit for that fee at closing by the seller, realtor or loan originator."
Page three of the GFE states that OTI can change at settlement if the borrower does not use the people we identify, thus have no tolerance limits.
Here, the sellers choose and pay for the OTI, as stipulated in the purchase contracts 99% of the time.
My interp was that since this the case, in this event the OTI would not then be subject to any tolerance, but the HUD statement seems to cloud that up. Am I reading too much into this or confusing something here?
Posted By: Runreb
Re: RESPA changes 1-1-10 - 12/24/09 03:56 AM
Concerning the "Intent to Proceed" I thought about including a line or two at the bottom of the cover letter that will accompany the GFE, ETIL, Right to Copy of Appraisal, etc. If the individual wants to proceed he or she could check the intent to proceed block, sign it and return that same letter to the bank. Do you have other thoughts or how are you doing?
Posted By: Kathleen O. Blanchard
Re: RESPA changes 1-1-10 - 12/24/09 04:04 AM
What if they call you and say they want to go ahead, will you wait to receive the signed letter?
If a bank takes phone applications, will they require a mailed or in person signature or will they accept a phone call, fax or email?
If you allow a lender (or person handling phone aps) to sign off on joint intent, perhaps this can be handled the same way.
If a bank takes phone applications, will they require a mailed or in person signature or will they accept a phone call, fax or email?
If you allow a lender (or person handling phone aps) to sign off on joint intent, perhaps this can be handled the same way.
Posted By: Book Nerd
Re: RESPA changes 1-1-10 - 12/24/09 12:26 PM
Originally Posted By: Runreb
Concerning the "Intent to Proceed" I thought about including a line or two at the bottom of the cover letter that will accompany the GFE, ETIL, Right to Copy of Appraisal, etc. If the individual wants to proceed he or she could check the intent to proceed block, sign it and return that same letter to the bank. Do you have other thoughts or how are you doing?
We are adding language to our rate lock/float form that will say something along the lines of "Your submission of this form and/or providing us with funds to lock your rate is documenting your intent to proceed with the loan."
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/24/09 03:14 PM
Originally Posted By: river girl
Thanks David
Does that mean we have to use the HUD 1 for a loan where we reimburse the appraisal fee ?
We only have the HUD1a programmed in our system. That will make some programmers really happy. HAHA
Does that mean we have to use the HUD 1 for a loan where we reimburse the appraisal fee ?
We only have the HUD1a programmed in our system. That will make some programmers really happy. HAHA
Exactly. If you need to have a reimbursement, you are forced to use a HUD-1. This is clarified in FAQ #11 of the "HUD-1 - General" section.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/24/09 03:25 PM
Good news! I emailed HUD with the following:
During the training presentations, you stated transfer taxes must be disclosed unless it is subject to a state law where the seller is required to pay them. Please refer to FAQ #1 (Good Faith Estimate-Seller Paid) where it states the Good Faith Estimate should list “charges typically paid by the borrower”. Also refer to FAQ #2 (Good Faith Estimate Seller Paid section) where it states “an estimate of settlement charges the borrower is likely to incur . . .” Also, FAQ #2 (Good Faith Estimate Block 5 section) further clarifies “if the borrower typically would incur . . .”
I have never seen a borrower pay for transfer taxes – never. Why would we list transfer taxes on the borrower’s Good Faith Estimate? They are NOT likely to incur these fees. They typically do not pay these fees. Your answer appears to contradict the other guidance (in writing).
Thank you for your training and for your prompt response.
----------------------------------------------------------------
Here's their reply (emphasis added):
The question you bring up is complicated because different areas of the country handle transfer taxes differently and also, regardless of what is typical, they can be negotiated by the parties. In the D.C. area, for example, transfer taxes are typically split between buyer and seller, but can be negotiated otherwise. I don’t know what state you are from, but I would say that if your state sales contracts are written that seller pays transfer taxes, that would be considered typical and in that case you would not need to put them on the GFE. Please contact us if you have further questions.
During the training presentations, you stated transfer taxes must be disclosed unless it is subject to a state law where the seller is required to pay them. Please refer to FAQ #1 (Good Faith Estimate-Seller Paid) where it states the Good Faith Estimate should list “charges typically paid by the borrower”. Also refer to FAQ #2 (Good Faith Estimate Seller Paid section) where it states “an estimate of settlement charges the borrower is likely to incur . . .” Also, FAQ #2 (Good Faith Estimate Block 5 section) further clarifies “if the borrower typically would incur . . .”
I have never seen a borrower pay for transfer taxes – never. Why would we list transfer taxes on the borrower’s Good Faith Estimate? They are NOT likely to incur these fees. They typically do not pay these fees. Your answer appears to contradict the other guidance (in writing).
Thank you for your training and for your prompt response.
----------------------------------------------------------------
Here's their reply (emphasis added):
The question you bring up is complicated because different areas of the country handle transfer taxes differently and also, regardless of what is typical, they can be negotiated by the parties. In the D.C. area, for example, transfer taxes are typically split between buyer and seller, but can be negotiated otherwise. I don’t know what state you are from, but I would say that if your state sales contracts are written that seller pays transfer taxes, that would be considered typical and in that case you would not need to put them on the GFE. Please contact us if you have further questions.
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 12/24/09 04:07 PM
Originally Posted By: David Dickinson
have never seen a borrower pay for transfer taxes – never. Why would we list transfer taxes on the borrower’s Good Faith Estimate? They are NOT likely to incur these fees. They typically do not pay these fees. Your answer appears to contradict the other guidance (in writing).
[/i]
----------------------------------------------------------------
Here's their reply (emphasis added):
The question you bring up is complicated because different areas of the country handle transfer taxes differently and also, regardless of what is typical, they can be negotiated by the parties. In the D.C. area, for example, transfer taxes are typically split between buyer and seller, but can be negotiated otherwise. I don’t know what state you are from, but I would say that if your state sales contracts are written that seller pays transfer taxes, that would be considered typical and in that case you would not need to put them on the GFE. Please contact us if you have further questions.
[/i]
----------------------------------------------------------------
Here's their reply (emphasis added):
The question you bring up is complicated because different areas of the country handle transfer taxes differently and also, regardless of what is typical, they can be negotiated by the parties. In the D.C. area, for example, transfer taxes are typically split between buyer and seller, but can be negotiated otherwise. I don’t know what state you are from, but I would say that if your state sales contracts are written that seller pays transfer taxes, that would be considered typical and in that case you would not need to put them on the GFE. Please contact us if you have further questions.
Thanks, David! I was about to proceed on that basis--with trepidation--but now I have this to fall back on.
Also, in my estimation, the text highlighted in red above gets to the heart of the major problem with this RESPA revision: they're trying to make a "one size fits all" with closing practices, and it just won't fit.
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 12/24/09 04:29 PM
How do we get the latest FAQs?
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/24/09 04:33 PM
Posted By: AuditorK
Re: RESPA changes 1-1-10 - 12/24/09 04:43 PM
2 Questions:
On GFE Block 11 - Do we list an estimate of the homeowner's annual insurance premium (even on non-purchase, junior lien mortgage loans where the borrower already has an insurance policy in place and paid for)?
Do we need to list an insurance agent on our "Settlement Providers List" since we allow the borrower to shop for homeowner's insurance from whoever they like?
I can't find any definitive guidance on either one of these - just differing informal opinions.
On GFE Block 11 - Do we list an estimate of the homeowner's annual insurance premium (even on non-purchase, junior lien mortgage loans where the borrower already has an insurance policy in place and paid for)?
Do we need to list an insurance agent on our "Settlement Providers List" since we allow the borrower to shop for homeowner's insurance from whoever they like?
I can't find any definitive guidance on either one of these - just differing informal opinions.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/24/09 04:56 PM
1. You must show the insurance premium in Block 11 regardless of your lien position or whether the transaction is a refinancing.
2. No. You only have to provide a providers list for those shown in Blocks 4, 5 & 6.
2. No. You only have to provide a providers list for those shown in Blocks 4, 5 & 6.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 12/24/09 05:04 PM
1) Q: What types of insurance are included on the GFE, Block 11, ―Homeowner‘s insurance‖?
A: Block 11 of the GFE contains estimates for premiums for all types of insurance (other than title insurance) that must be purchased to meet the loan originator‘s requirements to protect the property from loss, such as hazard insurance (homeowner‘s insurance), flood insurance, and earthquake insurance.
If it needs to be purchased, then quote it, but if they already have it, they would just provide you proof of insurance.
This is what we received from our compliance consultant in regards to the list.
6. Will the lender have to provide a written list for homeowner’s insurance? No. While we have received various answers from HUD on this one, the most recent word seems to be that the written list applies to providers of services that are disclosed in Blocks 4, 5 or 6 of the GFE. As a result, services that are disclosed in other blocks, such as Block 11 for homeowner’s insurance, do not have to be on the written list of providers even if the lender allows the borrower to select the provider.
A: Block 11 of the GFE contains estimates for premiums for all types of insurance (other than title insurance) that must be purchased to meet the loan originator‘s requirements to protect the property from loss, such as hazard insurance (homeowner‘s insurance), flood insurance, and earthquake insurance.
If it needs to be purchased, then quote it, but if they already have it, they would just provide you proof of insurance.
This is what we received from our compliance consultant in regards to the list.
6. Will the lender have to provide a written list for homeowner’s insurance? No. While we have received various answers from HUD on this one, the most recent word seems to be that the written list applies to providers of services that are disclosed in Blocks 4, 5 or 6 of the GFE. As a result, services that are disclosed in other blocks, such as Block 11 for homeowner’s insurance, do not have to be on the written list of providers even if the lender allows the borrower to select the provider.
Posted By: AuditorK
Re: RESPA changes 1-1-10 - 12/24/09 05:12 PM
Dan and DD Regs - Do your answers to my first question conflict? It looks like Dan is saying "yes" no matter what and DD Regs is saying "only if they must purchase it, not if they already have it".
Posted By: Still Smiling
Re: RESPA changes 1-1-10 - 12/24/09 05:12 PM
Ok, if after you have provided a GFE the consumer says to the loan officer; Bank xyz is not going to charge an origination fee, so the lo decides to waive the fee. Can you simply show the origination fee on the HUD as -0- line 801?
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 12/24/09 05:15 PM
Originally Posted By: AuditorK
Dan and DD Regs - Do your answers to my first question conflict? It looks like Dan is saying "yes" no matter what and DD Regs is saying "only if they must purchase it, not if they already have it".
I am sure Dan will set me straight with Chapter and verse. He has been at this a lot longer than me.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/24/09 05:27 PM
Originally Posted By: AuditorK
Dan and DD Regs - Do your answers to my first question conflict? It looks like Dan is saying "yes" no matter what and DD Regs is saying "only if they must purchase it, not if they already have it".
Look to your loan documents. I will bet there is a clause in the mortgage that requires them to maintain insurance to protect the property, therefore you require the insurance to be purchased by contract. If they already have it then they have "purchased" it outside of closing.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/24/09 05:31 PM
Quote:
He has been at this a lot longer than me.
Hmmmmmm....is that a reference to my age??????
Posted By: AuditorK
Re: RESPA changes 1-1-10 - 12/24/09 05:37 PM
Thanks for all the help! Everything's clear as mud
Posted By: Still Smiling
Re: RESPA changes 1-1-10 - 12/24/09 05:45 PM
Anyone?
Ok, if after you have provided a GFE the consumer says to the loan officer; Bank xyz is not going to charge an origination fee, so the lo decides to waive the fee. Can you simply show the origination fee on the HUD as -0- on line 801?
Ok, if after you have provided a GFE the consumer says to the loan officer; Bank xyz is not going to charge an origination fee, so the lo decides to waive the fee. Can you simply show the origination fee on the HUD as -0- on line 801?
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 12/24/09 07:54 PM
We don't have this situation here, but this particular Q & A on page 51 made me scratch my head:
So, if you don't have a cap on periodic changes, but have a floor of 4% and an overall cap say of 12%, then you disclose 8% in there? What? I can't understand that or what good that is to the customer.
Quote:
11) Q: How should the loan originator complete the answer to the question, “Every change date your interest can increase or decrease by ____%”, on the HUD-1, if the loan does not contain a cap of periodic interest changes other than by setting the overall floor and ceiling?
A: If the loan offered does not contain a cap of periodic interest change other than by setting the overall floor and ceiling, the loan originator should complete the answer to the question, “Every change date your interest can increase or decrease by ____%” with the difference between the floor and the ceiling.
A: If the loan offered does not contain a cap of periodic interest change other than by setting the overall floor and ceiling, the loan originator should complete the answer to the question, “Every change date your interest can increase or decrease by ____%” with the difference between the floor and the ceiling.
So, if you don't have a cap on periodic changes, but have a floor of 4% and an overall cap say of 12%, then you disclose 8% in there? What? I can't understand that or what good that is to the customer.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/24/09 08:11 PM
Originally Posted By: Still Smiling
Ok, if after you have provided a GFE the consumer says to the loan officer; Bank xyz is not going to charge an origination fee, so the lo decides to waive the fee. Can you simply show the origination fee on the HUD as -0- line 801?
No. Because the GFE has to be compared to the settlement statement (SS), you list the fee on the SS just as you did on the GFE. Then, you list a credit in the 200 series.
Here's a section of the webinar materials we provided for BOL on this topic:
b. Lender Paid Determined After GFE Is Issued:
If a loan originator (other than for no-cost loans), real estate agent, other settlement service provider, or other person pays for a charge that was included on the GFE, the charge should be listed in the borrower’s column on page 2 of the HUD-1. That charge should also be offset by listing a credit in that amount to the borrower on lines 204-209 on page 1 of the HUD-1 identifying the party paying the charge. [Appendix A to Part 3500 – page 7024]
You can find more about the webinar at the BOL Store:
http://www.bankersonline.com/bankerstore/index.php?main_page=product_info&products_id=1963
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/24/09 08:17 PM
Originally Posted By: AuditorK
Dan and DD Regs - Do your answers to my first question conflict? It looks like Dan is saying "yes" no matter what and DD Regs is saying "only if they must purchase it, not if they already have it".
I agree with Dan. You won't make someone a loan without having hazard insurance. Therefore, it is a settlement service and it must be listed on the GFE - no matter if they already have it or not. Items are not designated as POC on the GFE.
Posted By: Still Smiling
Re: RESPA changes 1-1-10 - 12/28/09 01:07 AM
Thank you David for your response. I remember this from your webinar, and this is what I told everyone in our training. This is very confusing, I can't get it straight in my head. If it is not harming the consumer and there is not tolerance violation due to the reduced charge, why would this not be ok?
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 12/28/09 01:54 PM
We are estimating certain appraisal fees as higher than they likely end up being charged due to the variance in fees being charged by appraisers.
My question is how to handle the overpayment of POC appraisal fees. If we disclose $500 and we collect $500 POC, and then the actual fee is $425, do we show the $425 POC on line 814 of the HUD-1? We obviously still owe the client $75 so then is the $75 credit on lines 204-209?
Thanks
My question is how to handle the overpayment of POC appraisal fees. If we disclose $500 and we collect $500 POC, and then the actual fee is $425, do we show the $425 POC on line 814 of the HUD-1? We obviously still owe the client $75 so then is the $75 credit on lines 204-209?
Thanks
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/28/09 02:50 PM
OSB-
On the final HUD 1 you can show POCs on fees the borrower has prepaid. In your example, you are correct in showing the $425 as poc for the appraisal and the balance as a credit.
On the final HUD 1 you can show POCs on fees the borrower has prepaid. In your example, you are correct in showing the $425 as poc for the appraisal and the balance as a credit.
Posted By: AuditorK
Re: RESPA changes 1-1-10 - 12/28/09 02:59 PM
Can anyone provide some insight on this situation?
If we use an in-house notary (one of our tellers is a notary) and the fees we collect from borrowers are paid directly to her, do we list the notary fees in Block 4 on the GFE, rather than Block 1? Also, if we don't require the borrower to use our notary, would we have to list a notary on the list of settlement service providers that the borrower can shop for?
I wish I wasn't getting hung up on a an issue as simple as notary fees.
If we use an in-house notary (one of our tellers is a notary) and the fees we collect from borrowers are paid directly to her, do we list the notary fees in Block 4 on the GFE, rather than Block 1? Also, if we don't require the borrower to use our notary, would we have to list a notary on the list of settlement service providers that the borrower can shop for?
I wish I wasn't getting hung up on a an issue as simple as notary fees.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/28/09 03:41 PM
If you require it, it must be listed on the GFE. I believe it would go in Block 1. If you don't require the borrower to use a specific provider, you don't have to give a list of providers. If you allow them to shop, you'll need to give them a list.
Posted By: AuditorK
Re: RESPA changes 1-1-10 - 12/28/09 03:54 PM
Thanks David!
So we would list the notary fee in Block 1 - even though the fees charged go to one of the bank's employees, not the bank itself?
Also, isn't "not requiring the borrower to use a specific provider" and "allowing them to shop" the same thing?
So we would list the notary fee in Block 1 - even though the fees charged go to one of the bank's employees, not the bank itself?
Also, isn't "not requiring the borrower to use a specific provider" and "allowing them to shop" the same thing?
Posted By: Comply Wren
Re: RESPA changes 1-1-10 - 12/28/09 04:07 PM
David, aren't the lists only for blocks 4,5,&6?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/28/09 04:50 PM
Are the notary fees for documents required in the origination process? Or is it something to do with the settlement.
If it's the first, I'd put them in Block 1, however if it's the second, and you don't allow shopping, I feel like it would go in #3.
If it's the first, I'd put them in Block 1, however if it's the second, and you don't allow shopping, I feel like it would go in #3.
Posted By: AuditorK
Re: RESPA changes 1-1-10 - 12/28/09 05:08 PM
RR Joker:
The notarization is necessary on the mortgage document in order for recording, so I guess it's part of settlement rather than origination.
For loans closed in-house (refi's with no attorney involved), we just use our employee who is a notary - out of practice more than anything. If the borrower told us that they wanted to use a particular notary (other than our employee) we would allow so.
I'm so confused...any help would be much appreciated!
The notarization is necessary on the mortgage document in order for recording, so I guess it's part of settlement rather than origination.
For loans closed in-house (refi's with no attorney involved), we just use our employee who is a notary - out of practice more than anything. If the borrower told us that they wanted to use a particular notary (other than our employee) we would allow so.
I'm so confused...any help would be much appreciated!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/28/09 05:10 PM
Originally Posted By: Comply Wren
David, aren't the lists only for blocks 4,5,&6?
You're absolutely right. My bad.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/28/09 05:28 PM
Quote:
The notarization is necessary on the mortgage document in order for recording, so I guess it's part of settlement rather than origination.
This changes things. I assumed you were requiring it for loan documents. If so, FAQs #2, 5 & 6 in the "GFE-Block 1" section make it clear this goes in Block 1.
Sounds to me like this would be a Block 4 and 1101 fee.
Quote:
Also, isn't "not requiring the borrower to use a specific provider" and "allowing them to shop" the same thing?
Yes.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/28/09 06:33 PM
David, would you not opine the notary fee as block 3 if it's not part of an agent's fee? AuditorK says that the employee is used when they DON'T use a closer.
I agree,if using an agent, it would go in 4, but not on a refi as described.
I agree,if using an agent, it would go in 4, but not on a refi as described.
Posted By: AuditorK
Re: RESPA changes 1-1-10 - 12/28/09 06:56 PM
Originally Posted By: RR joker
David, would you not opine the notary fee as block 3 if it's not part of an agent's fee? AuditorK says that the employee is used when they DON'T use a closer.
I agree,if using an agent, it would go in 4, but not on a refi as described.
I agree,if using an agent, it would go in 4, but not on a refi as described.
Except that we don't select our notary (require the use of our notary), we just use our notary if the borrower doesn't request another.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/28/09 06:59 PM
However, you really do require it since you have to have it.
Posted By: AuditorK
Re: RESPA changes 1-1-10 - 12/28/09 07:13 PM
We require a notary for the mortgage document, but we don't require that a specific person is used. Our notary is used almost 100% just because she is the most convenient and the borrowers don't wish to secure the services from anyone else.
I'm so overwhelmed with unanswered questions about RESPA that I want to dig a hole and stick my head in until 2011!
I'm so overwhelmed with unanswered questions about RESPA that I want to dig a hole and stick my head in until 2011!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/28/09 07:15 PM
Originally Posted By: RR joker
David, would you not opine the notary fee as block 3 if it's not part of an agent's fee? AuditorK says that the employee is used when they DON'T use a closer.
I agree,if using an agent, it would go in 4, but not on a refi as described.
I agree,if using an agent, it would go in 4, but not on a refi as described.
What are we notarizing? If the lender is the closing agent or if it's loan documents, then I believe this goes in Block 1. If it's required by the title agent, then it's block 4.
If the employee is used when they don't use a closer, then it sounds like it's a block 1 fee.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/28/09 07:24 PM
Also, look at FAQ #8 in the "HUD-1 - General" section:
8) Q: Where should fees for processing and administrative services be listed on the HUD-1 Settlement Statement?
A: Processing and administrative services are services to perform origination and title services functions. For the loan origination function, charges for such services are included in the total on Line 801. For the title services function, charges for such services must be included in the title underwriter's or title agent's charge and are shown in the total on Line 1101. Examples of processing and administrative services include, but are not limited to, the following: document delivery, document preparation, copying, wiring, preparing endorsements, document handling, and notarization.
8) Q: Where should fees for processing and administrative services be listed on the HUD-1 Settlement Statement?
A: Processing and administrative services are services to perform origination and title services functions. For the loan origination function, charges for such services are included in the total on Line 801. For the title services function, charges for such services must be included in the title underwriter's or title agent's charge and are shown in the total on Line 1101. Examples of processing and administrative services include, but are not limited to, the following: document delivery, document preparation, copying, wiring, preparing endorsements, document handling, and notarization.
Posted By: AuditorK
Re: RESPA changes 1-1-10 - 12/28/09 07:25 PM
We are notarizing the mortgage - which is required in order to be recorded in the state of PA.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/28/09 07:50 PM
Mortgages are required to be notarized in a lot of states. In the states we work in, nobody charges for it, tho. It's always been a gratis thing at banks and included as part of the closing cost at a title company. My FI pays my notary cert fee and I notarize whenever they need me to. Nobody pays me anything more.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/28/09 08:27 PM
Ditto that.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/29/09 01:52 PM
That is exactly where I'm hung up on this issue with AuditorK. The employee gets paid for the service, not the bank. This is the problem I have with it being in block 1.
The employee is not a title or settlement agent, so I don't see a fit for block 4.
The bank is requiring notorization, whether by the convenience of the on-site notary (who happens to be an employee) or by some other notary. This is why it seems to me Block 3 6 is the best fit.
The employee is not a title or settlement agent, so I don't see a fit for block 4.
The bank is requiring notorization, whether by the convenience of the on-site notary (who happens to be an employee) or by some other notary. This is why it seems to me Block 3 6 is the best fit.
Posted By: AuditorK
Re: RESPA changes 1-1-10 - 12/29/09 02:32 PM
As RR Joker says, I'm having a hard time figuring out where this would go. Doesn't seem to fit in any Block.
The issue I have with Block 3 is that we don't require the borrower to use our notary. We offer her services, but if they want to chose their own notary, we don't have a problem with that.
Also, could we require the borrower to use the bank's employee without running into a Section 8 violation - since the employee benefits from the referral because she retains the fees not the bank?
The issue I have with Block 3 is that we don't require the borrower to use our notary. We offer her services, but if they want to chose their own notary, we don't have a problem with that.
Also, could we require the borrower to use the bank's employee without running into a Section 8 violation - since the employee benefits from the referral because she retains the fees not the bank?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/29/09 03:21 PM
First, I'm thankful there is no notary charge in any of the states I work in. No worries about what block to put it in. My webinar notes say the Notary is included in processing and administrative services with doc prep, wiring and the commitment fee so it should go in Block 4.
Secondly, I'm interested in knowing how getting paid to notarize came about. I've been a notary in two states and never gotten paid for the service ever. It's not like it costs me anything beyond a nominal fee to become a notary so how does one justify charging to watch someone sign a piece of paper?
Secondly, I'm interested in knowing how getting paid to notarize came about. I've been a notary in two states and never gotten paid for the service ever. It's not like it costs me anything beyond a nominal fee to become a notary so how does one justify charging to watch someone sign a piece of paper?
Posted By: Runreb
Re: RESPA changes 1-1-10 - 12/29/09 03:42 PM
How do you or would you handle this scenario?
Individual gives lender 5 of 6 pieces of information. No property address is yet provided. The lender contacts the individual on day 25 and the individual says he is still looking for a property. Since the docs. are currently good for 120 days the lender documents the file with a notation of the communication with the individual. The lender documents the file every 30 days thereafter of the communication with the individual. If after docs. expire and no property has been identified do you deny due to incomplete application or show as withdrawn?
Individual gives lender 5 of 6 pieces of information. No property address is yet provided. The lender contacts the individual on day 25 and the individual says he is still looking for a property. Since the docs. are currently good for 120 days the lender documents the file with a notation of the communication with the individual. The lender documents the file every 30 days thereafter of the communication with the individual. If after docs. expire and no property has been identified do you deny due to incomplete application or show as withdrawn?
Posted By: fmb
Re: RESPA changes 1-1-10 - 12/29/09 03:45 PM
On a different issue, the most recent FAQ's, page 25, GFE Block 5 #1 indicates "Loan originators MUST provide an estimate of the charge for an Owner's title insurance policy....." Is this only in the case if we require it? We are a small bank and typically don't even address this option; thus we won't be having it as a closing cost on the HUD either. If we have to disclose it on the GFE, our 10% tolerance items would be out of wack right away.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 12/29/09 03:50 PM
Am I right in after the interest rate is locked, a new GFE has be provided?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/29/09 04:17 PM
Originally Posted By: ahkcompliance
Am I right in after the interest rate is locked, a new GFE has be provided?
Yes-must reflect the correct dates in the "Important Dates" section as well as fee changes based on rate lock.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/29/09 04:22 PM
runreb, you don't have an application if you don't have a property identified. It sounds like you're asking how this would be reported for HMDA. It would not be unless you have a pre-approval program. You might try posting this in the HMDA forum.
ahk, yes you must do a new GFE at the time of rate lock if you provided the original GFE on a floating rate.
ahk, yes you must do a new GFE at the time of rate lock if you provided the original GFE on a floating rate.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/29/09 04:45 PM
Quote:
The issue I have with Block 3 is that we don't require the borrower to use our notary. We offer her services, but if they want to chose their own notary, we don't have a problem with that.
Your are right, AuditorK. On second thought, Block 6 is the best area to put this. It's required, but you can shop.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/29/09 04:49 PM
Originally Posted By: fmb
On a different issue, the most recent FAQ's, page 25, GFE Block 5 #1 indicates "Loan originators MUST provide an estimate of the charge for an Owner's title insurance policy....." Is this only in the case if we require it? We are a small bank and typically don't even address this option; thus we won't be having it as a closing cost on the HUD either. If we have to disclose it on the GFE, our 10% tolerance items would be out of wack right away.
Unfortunately, on a purchase, you have to include it no matter what. It will likely pad your tolerance if it's not purchased, however.
Posted By: sab
Re: RESPA changes 1-1-10 - 12/29/09 05:07 PM
Some of our loan originations require the borrower to deposit 6 months of PITI reserves. How should this be diclosed on the new GFE? If we include it in the "origination charges" section, we cannot dilineate the amount. Can it be disclosed in the "other settlement services" block and be considered in compliance with RESPA?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 12/29/09 05:08 PM
sab-you actually collect and hold reserves?
Posted By: Luvinit
Re: RESPA changes 1-1-10 - 12/29/09 05:12 PM
New poster here...I've gotten a lot of good information from previous posts, but have not seen the following question I need direction on. Our bank does RESPA-covered constrution lending. Draws are requested throughout the course of the loan. The bank orders a disbursement endorsement costing $35 from the title company that issued the title commitment. The borrower is then charged for the $35 for the DE. Currently on the GFE & HUD we estimate six DE's costing $35 each for a total of $210. This $210 is shown as a POC item on line 1305(as the borrower pays for the actual number of DE's, post-closing as they occur). The $210 is also calculated in the pre-paid finance charges/APR.
Am I correct in thinking that the $210 will now be shown on the HUD as line item 1301, and still as a POC item? Also, Since POC items are no longer reflected on the GFE, how will we disclose it - as a credit in box 2 (which doesn't make sense to me) or do we just not show it at all? HELP!!!
Am I correct in thinking that the $210 will now be shown on the HUD as line item 1301, and still as a POC item? Also, Since POC items are no longer reflected on the GFE, how will we disclose it - as a credit in box 2 (which doesn't make sense to me) or do we just not show it at all? HELP!!!
Posted By: Runreb
Re: RESPA changes 1-1-10 - 12/29/09 05:49 PM
Originally Posted By: Truffle Royale
[font:Comic Sans MS]runreb, you don't have an application if you don't have a property identified. It sounds like you're asking how this would be reported for HMDA. It would not be unless you have a pre-approval program. You might try posting this in the HMDA forum.
I'm thinking about the denial process under new RESPA. I agree it would not be HMDA at that point. But, based on the scenario mentioned would you deny for Reg B purpose since you would have an incomplete application (no property address) or document the file as withdrawn? Thanks
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/29/09 05:57 PM
Per the RESPA definition you do not have an application if you do not have a property identified so, unless I'm missing your point, you can't approve or deny it. It isn't being withdrawn by the borrower either. This is an incomplete application and should be documented as such. We send a letter to the borrower at the beginning of the process stating if a property isn't identified by such and such a date, the file will be closed for incompleteness.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 12/29/09 06:54 PM
If we offer a rate lock at application, can we lower the rate for any reason? Our officers have a .25% option to lower the rate if they deem necessary. It would never rise than the quoted rate. If we do rate lock at application, do we put NA on line 1 in important date section?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/29/09 07:02 PM
OH, lord, ahk, you don't believe in KISS, do you? This opens up a whole slew of questions. Under what circumstances would the LO 'deem it necessary' to lower the rate and why wouldn't they take care of that at the time of lock? Is this preferential treatment for some borrowers vs others?
As I understand it, the new RESPA looks to level the playing field for all borrowers and make it easy for them to compare prices. Having an ace up their sleeves in the form of a quarter point they can drop doesn't seem to fit that scenario. jmho
This opens up a whole slew of questions. Under what circumstances would the LO 'deem it necessary' to lower the rate and why wouldn't they take care of that at the time of lock? Is this preferential treatment for some borrowers vs others? As I understand it, the new RESPA looks to level the playing field for all borrowers and make it easy for them to compare prices. Having an ace up their sleeves in the form of a quarter point they can drop doesn't seem to fit that scenario. jmho
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 12/29/09 07:13 PM
The quarter percent is hardly used but is available. In the past past we didnt do rate lock as we honored the quoted rate at the time of application but with HPML decided to do rate lock to avoid doing HPML.
So, if we state the interest rate is available for 10 days, then once we lock the rate in, a new GFE needs to be delivered? If we the rate is loced in at application, is line 1 NA?
Loan Department is looking at changing policy and procedure and I just need tomake sure I tell them the right way to fill in important date section. Sometimes they have me pulling my hair out!
So, if we state the interest rate is available for 10 days, then once we lock the rate in, a new GFE needs to be delivered? If we the rate is loced in at application, is line 1 NA?
Loan Department is looking at changing policy and procedure and I just need tomake sure I tell them the right way to fill in important date section. Sometimes they have me pulling my hair out!
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/29/09 08:02 PM
Line 1 is only NA if you haven't locked the rate.
If you have locked the rate, Line 1 can be filled in for any amount of time like an hour...close of your business day, whatever. It's the amount of time you're willing to hold that rate for the applicant.
If you have locked the rate, Line 1 can be filled in for any amount of time like an hour...close of your business day, whatever. It's the amount of time you're willing to hold that rate for the applicant.
Posted By: sab
Re: RESPA changes 1-1-10 - 12/29/09 08:13 PM
Yes, SOX in 07, we hold the reserve in a deposit account for borrowers' whose primary residence is in another country. The amount is disclosed on the TIL as a required deposit.
Posted By: AmyH
Re: RESPA changes 1-1-10 - 12/29/09 08:26 PM
How are you completing the monthly payment line in Summary of your Loan on page 1 if it is a single payment loan with interest due at maturity? It doesn't seem right to include only the accrued interest due at maturity or the principal plus interest due at maturity since it says $XXX/month.
The training I listened to talked about converting bimonthly or semiannual to monthly.
The training I listened to talked about converting bimonthly or semiannual to monthly.
Posted By: Iszy_theBug
Re: RESPA changes 1-1-10 - 12/29/09 08:31 PM
FAQ #1 - Interest Rate Expiration (pg 10) says that a revised GFE must be issued if any interst rate dependent charges and terms change.
I understood that to mean we only need to send a revised GFE if the new interest rate will cause settlement charges to change or the terms of the loan to change--not because it changes the important dates.
I understood that to mean we only need to send a revised GFE if the new interest rate will cause settlement charges to change or the terms of the loan to change--not because it changes the important dates.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 12/29/09 08:33 PM
Title Updates or Searches with regard to construction loans. Would they be listed on line 1101 of the HUD but detailed on 1109-? And be in Block 4 of the GFE?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/29/09 08:49 PM
Originally Posted By: RR joker
Originally Posted By: fmb
On a different issue, the most recent FAQ's, page 25, GFE Block 5 #1 indicates "Loan originators MUST provide an estimate of the charge for an Owner's title insurance policy....." Is this only in the case if we require it? We are a small bank and typically don't even address this option; thus we won't be having it as a closing cost on the HUD either. If we have to disclose it on the GFE, our 10% tolerance items would be out of wack right away.
Unfortunately, on a purchase, you have to include it no matter what. It will likely pad your tolerance if it's not purchased, however.
So on the comparison page on the HUD, since the seller will be selecting paying for the OTI (generally) would that figure move from the 10% tolerance section to the no tolerance section, since it is out of our control?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/29/09 09:12 PM
I don't think so Jay. Regardless of who pays, it still goes in the comparison. But, if they were to choose someone not on your list..then I'd think it would no longer be a tolerance concern.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/29/09 09:17 PM
There will be no list, because in the 6 times in the course of the year the borrower would have to pay for it, we will select the provider for them.
if it is left in the comparison, it will throw the tolerances totally out of whack, granted into our favor, but meaningless.
if it is left in the comparison, it will throw the tolerances totally out of whack, granted into our favor, but meaningless.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/29/09 09:26 PM
I don't get your logic, since it has to be quoted regardless of who pays it. That was the one "non-negotiable" piece of GFE madness.
We don't even REQUIRE it, but still have to quote it.
We don't even REQUIRE it, but still have to quote it.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/29/09 09:32 PM
Lemme ask this way, we don't have anything that we allow the customer to shop for, but if we did and it was a 10%er, and they choose a provider not on our provider list, would you still keep that item in the 10% tolerance section, or move it to the no tolerance limit section?
Posted By: ktac MITCH
Re: RESPA changes 1-1-10 - 12/29/09 09:36 PM
Originally Posted By: Just Jay
There will be no list, because in the 6 times in the course of the year the borrower would have to pay for it, we will select the provider for them.
if it is left in the comparison, it will throw the tolerances totally out of whack, granted into our favor, but meaningless.
if it is left in the comparison, it will throw the tolerances totally out of whack, granted into our favor, but meaningless.
As Joker said . . . Whether it is required or not, it must be quoted.
Here is the direct quote from the GFE Instructions
"
Block 4, “ Title services and lender's title insurance. ”—In this block, the loan originator must state the estimated total charge for third party settlement service providers for all closing services, regardless of whether the providers are selected or paid for by the borrower, seller, or loan originator. The loan originator must also include any lender's title insurance premiums, when required, regardless of whether the provider is selected or paid for by the borrower, seller, or loan originator. All fees for title searches, examinations, and endorsements, for example, would be included in this total. The charge shown in this block is subject to an overall 10 percent tolerance as described above.
Block 5, “ Owner's title insurance. ”—In this block, for all purchase transactions the loan originator must provide an estimate of the charge for the owner's title insurance and related endorsements, regardless of whether the providers are selected or paid for by the borrower, seller, or loan originator. For non-purchase transactions, the loan originator may enter “NA” or “Not Applicable” in this Block. The charge shown in this block is subject to an overall 10 percent tolerance as described above.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/29/09 09:39 PM
I am past the quoting and GFE period... I am trying to undertsand how to best show this on the third page of the HUD at settlement.
According to the third page of the GFE OTI has no tolerance limits if it is purcahsed from a company we do not identify, which is generally how it will happen.
According to the third page of the GFE OTI has no tolerance limits if it is purcahsed from a company we do not identify, which is generally how it will happen.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 12/29/09 09:43 PM
Originally Posted By: Just Jay
Lemme ask this way, we don't have anything that we allow the customer to shop for, but if we did and it was a 10%er, and they choose a provider not on our provider list, would you still keep that item in the 10% tolerance section, or move it to the no tolerance limit section?
If you don't allow them to shop, how can they choose someone not on a list that you don't provide them. Since if you don't allow someone to shop, you don't have to provide a list.
But my thought would be if you gave them a list and they choose someone not on the list, thus you allowed them to shop, then it would move to a non tolerence item. JMHO
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/29/09 09:49 PM
ACK!! this is getting all mangled up.
OTI, we disclose. No issue there. It is in the 10% bunch.
Seller selects and pays for it. This is all done totally outside of the control of bank (us) and the borrower.
Since it is done outside of the bank and borrowers control, would this itme then move into and become a non tolerance item in the HUD comparison chart when it is said and done?
OTI, we disclose. No issue there. It is in the 10% bunch.
Seller selects and pays for it. This is all done totally outside of the control of bank (us) and the borrower.
Since it is done outside of the bank and borrowers control, would this itme then move into and become a non tolerance item in the HUD comparison chart when it is said and done?
Posted By: Comply Wren
Re: RESPA changes 1-1-10 - 12/29/09 10:18 PM
JJ, don't let the seller paid part get to you. IMHO, if the OTI comes from someone on your list, 10% tolerance; if it comes from someone not on your list, no tolerance. Doesn't really matter who pays for it (at least that's what HUD says) .
.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/29/09 10:34 PM
No arguements... I am strictly talking placement of this item on page three of the DUH form.
Can I move that to the 'Charges that can change' section since no tolerance limit will apply to it.
If I leave it in the 'charges that in total cannot increase more than 10%' section, it will totally skew my figrues for the block since my LOS system will tally for the overage percentage everything in that section, wether a tolerance applies to a certain item or not.
Can I move that to the 'Charges that can change' section since no tolerance limit will apply to it.
If I leave it in the 'charges that in total cannot increase more than 10%' section, it will totally skew my figrues for the block since my LOS system will tally for the overage percentage everything in that section, wether a tolerance applies to a certain item or not.
Posted By: Brad B
Re: RESPA changes 1-1-10 - 12/29/09 10:39 PM
I believe you would have to move it there Jay
Posted By: Runreb
Re: RESPA changes 1-1-10 - 12/30/09 01:05 AM
Originally Posted By: Truffle Royale
Per the RESPA definition you do not have an application if you do not have a property identified so, unless I'm missing your point, you can't approve or deny it. It isn't being withdrawn by the borrower either. This is an incomplete application and should be documented as such. We send a letter to the borrower at the beginning of the process stating if a property isn't identified by such and such a date, the file will be closed for incompleteness.
In this letter do you give them until the docs. expire (e.g., 120 days) or what date do you normally use? Secondly, is the notice that you are referring to the same as the alternative notice of incompleteness that is permitted under Reg B? I am trying to decide if we need to change our procedures for prequal. apps. when no property is identified or we just do not hear back from the individual.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 12/30/09 01:28 AM
Originally Posted By: Comply Wren
JJ, don't let the seller paid part get to you. IMHO, if the OTI comes from someone on your list, 10% tolerance; if it comes from someone not on your list, no tolerance. Doesn't really matter who pays for it (at least that's what HUD says) .
. In our county the seller/realtor chooses the TC. They are not the borrower so would never be given the GFE or provider list. Are you saying that if the seller/realtor chooses someone on a list they never see, the tolerance still applies? I agree with your statement about HUD not caring who pays for it as far as it going on the GFE but they are clear on when the tolerance applies, either lender select or borrower select. We feel that if the seller/realtor selects the TC to do the OTI, then it will never be lender select or borrower select. The only choice is to mark it borrower select, thus won't be counted in the tolerance at closing. It's really not going to matter to us because in our county the seller is required to pay for it so it will always be on the GFE and not listed on the buyers side of the HUD, so the tolerance won't apply anyway. There is only a rare instance, such as a REO sale, where the buyer would ever have to pay for it and in that scenerio the tolerance would apply. As mentioned in another post, we will always be "padding" costs on a purchase by the amount of the OTI. That is one thing we can thank HUD for as I am sure they did not mean to allow us to pad the costs by several hundreds of dollars.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/30/09 01:37 AM
Originally Posted By: jlroberts
... It's really not going to matter to us because in our county the seller is required to pay for it so it will always be on the GFE and not listed on the buyers side of the HUD...
I would review your FAQ's on this one... my understanding is that is still goes in the buyers column of the HUD, and is 'cured' with seller credits in the 200/500 series on the front side.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 12/30/09 02:21 AM
Holy Moly - how did I miss that. We were going to mark it seller paid on the HUD. Luckily for us it still won't matter though because we are only putting two TC on our list. If they pick one of them, the fees will be accurate, if they pick someone else the tolerances don't apply anyway. Whew!
Why is there even a sellers column on the HUD if we are not allowed to but anything in it. There will definately not be enough lines in the 500 series for all the items the seller will be paying for......
HUD-1 – Seller-paid items
1) Q: What if at closing the seller is paying for a settlement service that was listed on the GFE, such as the Owner‘s title insurance policy? How is this shown on the HUD-1?
A: If the seller is paying for a service that was on the GFE, such as Owner‘s title insurance, the charge remains in the borrower‘s column on the HUD-1. A credit from the seller to the borrower to offset the charge should be listed on the first page of the HUD-1 in Lines 204-209 and Lines 506-509 respectively.
Why is there even a sellers column on the HUD if we are not allowed to but anything in it. There will definately not be enough lines in the 500 series for all the items the seller will be paying for......
HUD-1 – Seller-paid items
1) Q: What if at closing the seller is paying for a settlement service that was listed on the GFE, such as the Owner‘s title insurance policy? How is this shown on the HUD-1?
A: If the seller is paying for a service that was on the GFE, such as Owner‘s title insurance, the charge remains in the borrower‘s column on the HUD-1. A credit from the seller to the borrower to offset the charge should be listed on the first page of the HUD-1 in Lines 204-209 and Lines 506-509 respectively.
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/30/09 12:50 PM
This is so much fun!
When you think you have it ~ something comes up and you find out you did not have it in your head.
Can I ask a question? Are we all thinking the same that the only 2 times Block 1 can be changed is a different loan program or if the interest rate was based on a percentage?
So even if a changed circumstance came into being- you could never increase Block 1 unless the loan program changed or the interest rate was based on a percentage. Is this correct? Thanks so much.
When you think you have it ~ something comes up and you find out you did not have it in your head.
Can I ask a question? Are we all thinking the same that the only 2 times Block 1 can be changed is a different loan program or if the interest rate was based on a percentage?
So even if a changed circumstance came into being- you could never increase Block 1 unless the loan program changed or the interest rate was based on a percentage. Is this correct? Thanks so much.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/30/09 01:25 PM
The loan amount, itself, changing, is also a changed circumstance, but only the fees affected, if based on a percentage, can change.
Boy, that's a chopped us sentence if I ever wrote one!
Boy, that's a chopped us sentence if I ever wrote one!
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/30/09 02:16 PM
JJ, I'm a little late in your conversation for the OTI and just skimmed over the questions, but if you do not choose the provider then you allow the consumer to shop, doesn't matter if the Realtor, or someone else chose the provider for the consumer.
For items that that you allow them to shop for you must provide a list and if they choose a provider from the list you are subject to the 10% tolerance. If they choose someone not on the list the tolerance does not apply, HOWEVER, if you fail to provide a list for providers that you allow them to shop for you are subject to the 10% tolerance regardless who they choose.
Not sure if this addresses your concerns or not.
For items that that you allow them to shop for you must provide a list and if they choose a provider from the list you are subject to the 10% tolerance. If they choose someone not on the list the tolerance does not apply, HOWEVER, if you fail to provide a list for providers that you allow them to shop for you are subject to the 10% tolerance regardless who they choose.
Not sure if this addresses your concerns or not.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/30/09 02:35 PM
very well said, Dan! Not what JJ wants to hear, but very well said.
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/30/09 03:03 PM
Thanks RR joker- appreciate it a lot.
Posted By: AmyH
Re: RESPA changes 1-1-10 - 12/30/09 03:32 PM
Originally Posted By: AmyH
How are you completing the monthly payment line in Summary of your Loan on page 1 if it is a single payment loan with interest due at maturity? It doesn't seem right to include only the accrued interest due at maturity or the principal plus interest due at maturity since it says $XXX/month.
The training I listened to talked about converting bimonthly or semiannual to monthly.
The training I listened to talked about converting bimonthly or semiannual to monthly.
Any ideas?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/30/09 03:49 PM
I would think it would have to be zero. Then in the last box..fill in the baloon payment amount due at maturity.
Posted By: KC Danimal
Re: RESPA changes 1-1-10 - 12/30/09 03:56 PM
This is probably a dumb question, but here goes . . . .
Applications that were submitted this week and used the old GFE, but do not close until after next week . . . . is there a re-disclosure required on the new forms or do you continue through wiht the forms on which you started?
Applications that were submitted this week and used the old GFE, but do not close until after next week . . . . is there a re-disclosure required on the new forms or do you continue through wiht the forms on which you started?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/30/09 03:57 PM
start with old, end with old. But check with your closers to make sure they can still support the old.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/30/09 04:00 PM
Originally Posted By: AmyH
Originally Posted By: AmyH
How are you completing the monthly payment line in Summary of your Loan on page 1 if it is a single payment loan with interest due at maturity? It doesn't seem right to include only the accrued interest due at maturity or the principal plus interest due at maturity since it says $XXX/month.
The training I listened to talked about converting bimonthly or semiannual to monthly.
The training I listened to talked about converting bimonthly or semiannual to monthly.
Any ideas?
Don't take this a "gospel", it's just how we are going to disclose it. I couldn't come up with a better solution. If anyone else has any ideas please chime in.
In the monthly payment section we are going to disclose $0.00 and then show the payment due at maturity in the balloon section of the form.
I skipped right over RRJ's comment...at least we are thinking along the same line.
Posted By: questioning
Re: RESPA changes 1-1-10 - 12/30/09 04:02 PM
We have an affliate business with an attorney to do title insurance, so we currently give the Affiliated Business Disclosure. We have decided to choose all settlement providers rather than give a Recommended list for the cusotmer to shop. Can we do that witht he title insurance since it's an affliate or do we have to provide a Recommended list of title companies for them to choose from?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/30/09 04:21 PM
If memory serves me, the AfBD says you do not have to use and can shop..so you may have to provide a list and only list that provider?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/30/09 04:25 PM
Originally Posted By: Dan Persfull
JJ, I'm a little late in your conversation for the OTI and just skimmed over the questions, but if you do not choose the provider then you allow the consumer to shop, doesn't matter if the Realtor, or someone else chose the provider for the consumer.
For items that that you allow them to shop for you must provide a list and if they choose a provider from the list you are subject to the 10% tolerance. If they choose someone not on the list the tolerance does not apply, HOWEVER, if you fail to provide a list for providers that you allow them to shop for you are subject to the 10% tolerance regardless who they choose.
Not sure if this addresses your concerns or not.
For items that that you allow them to shop for you must provide a list and if they choose a provider from the list you are subject to the 10% tolerance. If they choose someone not on the list the tolerance does not apply, HOWEVER, if you fail to provide a list for providers that you allow them to shop for you are subject to the 10% tolerance regardless who they choose.
Not sure if this addresses your concerns or not.
Maybe I am just being thick headed, I dunno.
I cannot wrap my head around this since in the event my borrower would need to purchase OTI (construction, foreclosure purchase) we would not allow them to shop, we select it. i have no shopping list for any services for my borrower.
If I am understanding what you are suggesting, and very kinkdly I might add, is that I almost have to allow them to shop for OTI so I hopefully will not be held to the 10% overage limit when they selct someone we would not use, and will be limited to it in the event they do choose the one company we use and would list?
GAHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/30/09 04:38 PM
that sounds about right, JJ.
Posted By: questioning
Re: RESPA changes 1-1-10 - 12/30/09 04:39 PM
Regarding the Affliated Business, there is a section on the form that indicates "charges for the settlement services of an attorney, credit reporting agency, or real estate appraiser that we, as your lender, will require you to use". Would the title insurance fall within this category since we have the affliated business with our attorney?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/30/09 04:44 PM
Originally Posted By: RR joker
that sounds about right, JJ.
I want to cry now.
I try not not to ask others to do my homework for me, but is there a page in the rule or a FAQ that I need to review to better understand this, that perhaps I have misinterpretted the first 16 go rounds?
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/30/09 04:47 PM
"If I am understanding what you are suggesting, and very kinkdly I might add, is that I almost have to allow them to shop for OTI "
No, you do not have to allow them to choose the title company, but regardless RESPA requires OTI to be disclosed in Block 5.
JJ maybe I'm not fully understanding what your concern is.
If you don't allow them to shop then you are choosing the provider, therefore you are subject to the 10% tolerance. I'm not sure how they could choose a provider either on your list or not if you don't allow them to shop. But if at any time you allow them to choose the provider then what I said above would hold true.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/30/09 05:03 PM
I understand that Dan, and I am so past the GFE, we are good there. I am trying to strictly focus on the HUD page three.
Here though, it is stipulated in the purchase contract that the seller will select and pay for the OTI.
So my initial thought was that when it comes to settlement, on page three of the settlement statement, we would list the OTI not in the 10% tolerance comparison section, but move the item to the unlimited tolerance comparison section, since borrower nor bank had any say in that selection.
But I am taking away from you now, that since we are not controlling the selection process, nor are we able to dictate the title compnay used (tried that once, we were blackballed in the local title community) that we have to have a shopping list for OTI, becuase if we do not, then we may be limited to a 10% tolerance from our GFE quote and the actual charge for the OTI that the seller selected (not just payed for, but also selected).
Clear as mud or no?
Here though, it is stipulated in the purchase contract that the seller will select and pay for the OTI.
So my initial thought was that when it comes to settlement, on page three of the settlement statement, we would list the OTI not in the 10% tolerance comparison section, but move the item to the unlimited tolerance comparison section, since borrower nor bank had any say in that selection.
But I am taking away from you now, that since we are not controlling the selection process, nor are we able to dictate the title compnay used (tried that once, we were blackballed in the local title community) that we have to have a shopping list for OTI, becuase if we do not, then we may be limited to a 10% tolerance from our GFE quote and the actual charge for the OTI that the seller selected (not just payed for, but also selected).
Clear as mud or no?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/30/09 05:14 PM
JJ, you're confusing me and I'm dealing with the same state dictated issue you are!
Maybe I'm not reading this right but if the seller is paying for the owner's policy ie: it appears as a charge on HUD line 1103 with an offsetting credit in the 500 series on page 1 of the HUD, does it still carry over to page 3 in any of the boxes? It was a charge on the GFE but it's not a charge on the HUD so why would we have to count it at all is what I think I'm asking here.
Maybe I'm not reading this right but if the seller is paying for the owner's policy ie: it appears as a charge on HUD line 1103 with an offsetting credit in the 500 series on page 1 of the HUD, does it still carry over to page 3 in any of the boxes? It was a charge on the GFE but it's not a charge on the HUD so why would we have to count it at all is what I think I'm asking here.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/30/09 05:44 PM
I don't see how it can't move onto the third page.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/30/09 05:51 PM
Quote:
Here though, it is stipulated in the purchase contract that the seller will select and pay for the OTI.
I think I would be reporting someone to HUD:
2608: Title companies; liability of seller (01/03/07)
(a) No seller of property that will be purchased with the assistance of a federally related mortgage loan shall require directly or indirectly, as a condition to selling the property, that title insurance covering the property be purchased by the buyer from any particular title company.
(b) Any seller who violates the provisions of subsection (a) of this section shall be liable to the buyer in an amount equal to three times all charges made for such title insurance.
(Pub. L. 93-533, Sec. 9, Dec. 22, 1974, 88 Stat. 1728.)
Quote:
I am trying to strictly focus on the HUD page three.
And I was focusing on the GFE.
David posted an "amendment" to the FAQs he got from HUD. I don't remember if it's in this thread or a different one, but the new opinion he got from HUD is if in your area it is "typical" for the seller to pay for the item it does not have to be disclosed on the GFE. However, I don't remember the exact content so you may want to do a search to read it for yourself.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/30/09 06:01 PM
And that is probably why we see OTI specifically spelled out on the GFE now becuse of this widespread practice... it is not one company or one realtor...it is a statewide thing, and not limited to only WI.
HUD has already issued several statements that the "typical" rule is not applicable to OTI.
HUD has already issued several statements that the "typical" rule is not applicable to OTI.
Posted By: RUKiddingMe
Re: RESPA changes 1-1-10 - 12/30/09 07:14 PM
Dan said:
David posted an "amendment" to the FAQs he got from HUD. I don't remember if it's in this thread or a different one, but the new opinion he got from HUD is if in your area it is "typical" for the seller to pay for the item it does not have to be disclosed on the GFE. However, I don't remember the exact content so you may want to do a search to read it for yourself.
Is this since the 11/19 FAQ? I'd appreaciate it if someone could provide a link.
David posted an "amendment" to the FAQs he got from HUD. I don't remember if it's in this thread or a different one, but the new opinion he got from HUD is if in your area it is "typical" for the seller to pay for the item it does not have to be disclosed on the GFE. However, I don't remember the exact content so you may want to do a search to read it for yourself.
Is this since the 11/19 FAQ? I'd appreaciate it if someone could provide a link.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/30/09 07:17 PM
I looked up David's post and it pertained to the transfer taxes.
I agree the OTI has to be shown in Block 5.
Unfortuantely, regardless who pays for it you are subject to the 10% rule as I understand it. You have the option to tell the consumer that you will choose the provider, however in this situation due to competitive issues, you allow them to choose the provider stipulated by the seller, therefore you technically are allowing them to "shop". The simple way around this is to provide a list with the GFE with the title company you generally use when you select the provider. If they have chose someone else then you are out of the 10% tolerance and the charge does not have to be transferred to the "comparison chart" on the HUD.
If anyone has any other thoughts please post them.
I agree the OTI has to be shown in Block 5.
Unfortuantely, regardless who pays for it you are subject to the 10% rule as I understand it. You have the option to tell the consumer that you will choose the provider, however in this situation due to competitive issues, you allow them to choose the provider stipulated by the seller, therefore you technically are allowing them to "shop". The simple way around this is to provide a list with the GFE with the title company you generally use when you select the provider. If they have chose someone else then you are out of the 10% tolerance and the charge does not have to be transferred to the "comparison chart" on the HUD.
If anyone has any other thoughts please post them.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/30/09 07:18 PM
Refer to FAQs #2 in the GFE-Block 5 section, #7 in the GFE-Block 4 section and #1 in the GFE Seller Paid section.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/30/09 07:19 PM
It was not an official amendment, that's why I used the "".
You'll find the post several pages back in this thread.
You'll find the post several pages back in this thread.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 12/30/09 07:27 PM
Question about attorney fees. If we use an attorney to perfrom the closing instead of a "Title Agency". According to FAQ #22 on page 46. We would use line 1109 and list the attorney name and service they performed; We could not simply put Attorney Fees correct?
Thanks
Thanks
Posted By: RUKiddingMe
Re: RESPA changes 1-1-10 - 12/30/09 07:38 PM
David and/or Dan, can you explain the different answers that are provided in FAQ#2 in the GFE Block 5 section and #7 in the GFE Block 4 section? The instructions from Appendix C seem to indicate that in either case, the charge should be disclosed, regardless of who customarily pays for the service....I realize of course that the 'rule of thumb' says costs that are typically seller paid costs aren't disclosed on the GFE, but apparently that doesn't always hold water.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/30/09 07:46 PM
Here's my thoughts:
#7 (GFE-Block 4) is a "global" comment. It states to only list charges the borrower would "typically" pay for. Same with FAQ #1 in the GFE Seller Paid section.
#2 (GFE-Block 5) is specific to owner's title insurance. Nothing else. It requires Owner's TI to always be listed, no matter who pays for it.
#7 (GFE-Block 4) is a "global" comment. It states to only list charges the borrower would "typically" pay for. Same with FAQ #1 in the GFE Seller Paid section.
#2 (GFE-Block 5) is specific to owner's title insurance. Nothing else. It requires Owner's TI to always be listed, no matter who pays for it.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/30/09 07:53 PM
Originally Posted By: Dan Persfull
Quote:
Here though, it is stipulated in the purchase contract that the seller will select and pay for the OTI.
I think I would be reporting someone to HUD:
2608: Title companies; liability of seller (01/03/07)
(a) No seller of property that will be purchased with the assistance of a federally related mortgage loan shall require directly or indirectly, as a condition to selling the property, that title insurance covering the property be purchased by the buyer from any particular title company.
(b) Any seller who violates the provisions of subsection (a) of this section shall be liable to the buyer in an amount equal to three times all charges made for such title insurance.
(Pub. L. 93-533, Sec. 9, Dec. 22, 1974, 88 Stat. 1728.)
The seller is purchasing the owner's title insurance policy as a means of proving marketable title to the property.
That's why we say it shouldn't be shown as a buyer's cost because they never pay for it.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/30/09 07:55 PM
I agree.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/30/09 07:56 PM
Too bad HUD doesn't.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/30/09 07:58 PM
Actually I was agreeing with David's comment, but I would also agree with yours in theory after your explanation.
but I would also agree with yours in theory after your explanation.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/30/09 07:59 PM
I think Dan was agreeing to David, TR.
I believe Dan is absolutely correct with that cite. As a matter of fact, I read it earlier (by accident looking for something else! ). Place emphasis on "indirectly". If the seller chooses and purchases the OTI, that is indirectly NOT allowing the borrower to choose...which appears to be in violation of RESPA.
I believe Dan is absolutely correct with that cite. As a matter of fact, I read it earlier (by accident looking for something else! ). Place emphasis on "indirectly". If the seller chooses and purchases the OTI, that is indirectly NOT allowing the borrower to choose...which appears to be in violation of RESPA.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/30/09 08:22 PM
It is, but instead of HUD enforcing the rules it has, they are trying to enforce it with new rules and to try to get the banks to correct the realtors and title companies for them.
We tried it once, to select or allow our customer to choose OTI... blackballed immediately. Could not get a tile company to do a darn thing for you. Once they heard who was calling, they would hang up. It was a mess.
We tried it once, to select or allow our customer to choose OTI... blackballed immediately. Could not get a tile company to do a darn thing for you. Once they heard who was calling, they would hang up. It was a mess.
Posted By: me luv regs
Re: RESPA changes 1-1-10 - 12/30/09 08:25 PM
We are also struggling with this new list requirement. We do allow borrowers to choose their attorney/title insurance but we do make anyone they choose meet certain requirements ($$ insurance, etc.). Does that mean that we have to list every attorney we've "approved" in the past?
We planned on only listing 1 service that will cover our entire area.
We planned on only listing 1 service that will cover our entire area.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/30/09 08:32 PM
There is no requirement in the new rules to list more than one provider. The only requirement is the provider listed must provide the service in the applicant's area. IOWs if the provider listed only provides service in Area 51 and the applicant lives in Area 55 you have to list a provider that services Area 55.
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 12/30/09 08:33 PM
Do i understand correctly? (I got into the wrong industry btw)...We need to have a list of providers for OTI regardless of it being seller paid or whatever? You would just list a title insurance company? Can you know this fee in advance?
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/30/09 08:40 PM
We contacted the companies we do business with and they readily provided us with rate charts.
Due to a couple of outlying branches we will be listing 3 TI companies and quoting the highest fee on the GFE for both Blocks 4 & 5.
Due to a couple of outlying branches we will be listing 3 TI companies and quoting the highest fee on the GFE for both Blocks 4 & 5.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 12/30/09 08:40 PM
Most title insurance companies sell owners title insurance at a dollar amount per thousand dollars worth of coverage. The lender's policy is a flat fee add on if owners title is being purchased.
You should be able to get a price list from the title companies in your area. In all likelihood, they're going to be pretty much the same with regards to title policies.
You should be able to get a price list from the title companies in your area. In all likelihood, they're going to be pretty much the same with regards to title policies.
Posted By: me luv regs
Re: RESPA changes 1-1-10 - 12/30/09 09:19 PM
So are we okay to have internal requirements for providers they choose on their own (not on the list)?
We don't want them using somebody that does shoddy work.
We don't want them using somebody that does shoddy work.
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 12/30/09 09:22 PM
do we have to provide a list for OTI?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/30/09 09:24 PM
::looking to transfer into an open teller position::
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/30/09 09:26 PM
Originally Posted By: raitchjay
do we have to provide a list for OTI?
Yes. You must provide a list of providers for any fee listed in Blocks 4-6 where you allow them to shop.
Posted By: me luv regs
Re: RESPA changes 1-1-10 - 12/30/09 09:27 PM
Dan or David - can you answer 1315768 please
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/30/09 09:30 PM
Originally Posted By: me luv regs
Dan - can you answer 1315768 please
We have the following disclaimer:
You are under no obligation to choose the providers shown and are free to choose your own provider as long as they are properly licensed where required and they regularly perform the required service.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/30/09 09:33 PM
Originally Posted By: me luv regs
So are we okay to have internal requirements for providers they choose on their own (not on the list)?
We don't want them using somebody that does shoddy work.
We don't want them using somebody that does shoddy work.
Not Dan or David, but yes, you may certainly not allow unapproved providers.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/30/09 09:40 PM
I agree. You don't have to accept certain providers. This may certainly be a customer service issue, but you're in the driver's seat.
Posted By: Munoz
Re: RESPA changes 1-1-10 - 12/30/09 09:49 PM
If we do not allow them to shop for the Title insurance company for our title insurance and closing do we still need to provide a list for the owners policy?
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/30/09 10:00 PM
After today's Q & A in here I vote for everyone to have a stiff drink.
Happy New Year! Thanks so much for helping me and everyone else. You all are the best!
Happy New Year! Thanks so much for helping me and everyone else. You all are the best!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/30/09 10:16 PM
Originally Posted By: Munoz
If we do not allow them to shop for the Title insurance company for our title insurance and closing do we still need to provide a list for the owners policy?
If you don't allow them shop, no list is triggered.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 12/30/09 10:17 PM
I am more confused than ever, but a stiff drink I will have.
I am off tomorrow in order to de-respa... I need to be fresh to come at it swinging Monday!
I am off tomorrow in order to de-respa... I need to be fresh to come at it swinging Monday!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/30/09 10:23 PM
Originally Posted By: pjs
After today's Q & A in here I vote for everyone to have a stiff drink.
Happy New Year! Thanks so much for helping me and everyone else. You all are the best!
Happy New Year! Thanks so much for helping me and everyone else. You all are the best!
Just ONE?!?
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/30/09 11:44 PM
FYI for FHA lenders.
HUD has issued a mortgagee letter today with guidance for FHA lenders about RESPA and the elimination of the FHA's 1% cap on origination fees. http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-53ml.pdf
HUD has issued a mortgagee letter today with guidance for FHA lenders about RESPA and the elimination of the FHA's 1% cap on origination fees. http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-53ml.pdf
Posted By: pjs
Re: RESPA changes 1-1-10 - 12/31/09 04:03 AM
Originally Posted By: David Dickinson
Originally Posted By: pjs
After today's Q & A in here I vote for everyone to have a stiff drink.
Happy New Year! Thanks so much for helping me and everyone else. You all are the best!
Happy New Year! Thanks so much for helping me and everyone else. You all are the best!
Just ONE?!?
NO! I was just trying to be ladylike! HA!
Posted By: Sage
Re: RESPA changes 1-1-10 - 12/31/09 12:27 PM
Originally Posted By: David Dickinson
Originally Posted By: Munoz
If we do not allow them to shop for the Title insurance company for our title insurance and closing do we still need to provide a list for the owners policy?
If you don't allow them shop, no list is triggered.
We don't allow applicants to shop for our title work provider, but we will let them chose whoever they want for an owners policy (even though it is probably cheaper to go with the title co we are using). So -we are providing a list with one provider for an owners policy.
Posted By: NanciT
Re: RESPA changes 1-1-10 - 12/31/09 01:51 PM
Is anyone willing to share their opinion or practices on GFE "re-acceptance" procedures, if any? For example, when a lender rejects a broker GFE which the broker has given to the customer, will you ever take a 2nd look at the GFE? Possible options: 1) lender accepts all broker GFEs and makes brokers responsible for tolerance cures, 2) lender considers broker GFE on a property/customer only once - if the broker gets it wrong and lender rejects GFE, lender never accepts GFE on that property/customer, 3) lender sends GFE to brokers customer 100% time, 4) lender "pre-approves" all GFEs before brokers can send them, 5) lender accepts new GFE after original GFE expires if broker denies original application (assumes customer expressed intent on original GFE) and starts with new application, 6) other. I spoke with HUD on this and they told me that the rule, as written, does not address the scenario of what happens to a GFE is a broker cannot find a lender who will accept it (and customer has expressed intent to move forward).
Posted By: Reed
Re: RESPA changes 1-1-10 - 12/31/09 04:29 PM
I've been reading through this thread but am still confused about where on the GFE to put the Freddie Mac Delivery Fee. It can change depending on the appraisal but it seems to meet the definition of a origination charge, which can't change. HELP!
Posted By: Bville
Re: RESPA changes 1-1-10 - 12/31/09 05:07 PM
Good news!? RESPA FAQs are updated again!
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/31/09 05:26 PM
Here's a link to the FAQs dated 12/30/09. http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs.pdf
They are 52 pages. The file was posted after 11:00 a.m. today. A new Q & A 8 was added to pages 12 and 13 of 52 regarding "Title Services and Lender's Title Insurance." They also updated the answer to the last question of the FAQs about the settlement costs booklet. They indicate that the new booklet is on the website. They do not elaborate on when it must be used. Section 3500.6(b) of Reg. X states "Revision. The Secretary may from time to time revise the special information booklet by publishing a notice in the Federal Register." I have yet to see the FR notice.
They are 52 pages. The file was posted after 11:00 a.m. today. A new Q & A 8 was added to pages 12 and 13 of 52 regarding "Title Services and Lender's Title Insurance." They also updated the answer to the last question of the FAQs about the settlement costs booklet. They indicate that the new booklet is on the website. They do not elaborate on when it must be used. Section 3500.6(b) of Reg. X states "Revision. The Secretary may from time to time revise the special information booklet by publishing a notice in the Federal Register." I have yet to see the FR notice.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/31/09 05:28 PM
We continue to only list it for Purchase transactions.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 12/31/09 05:39 PM
RR Joker were you replying to me? I know the booklet is required for purchase money mortgage transactions. I was referring to when we must begin to use the new booklet. Vendors are saying you must start giving out the new booklets on 1/1/2010 but I have not seen an announcement from HUD on this.
Posted By: Anonymous
Re: RESPA changes 1-1-10 - 12/31/09 05:42 PM
Where does RESPA say that the borrower has the right to choose? It just says the seller can't require the borrower to purchase from a particular providor as a condition of the sale.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/31/09 06:04 PM
Originally Posted By: Reads Regs
Here's a link to the FAQs dated 12/30/09. http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs.pdf
They are 52 pages. The file was posted after 11:00 a.m. today. A new Q & A 8 was added to pages 12 and 13 of 52 regarding "Title Services and Lender's Title Insurance." They also updated the answer to the last question of the FAQs about the settlement costs booklet. They indicate that the new booklet is on the website. They do not elaborate on when it must be used. Section 3500.6(b) of Reg. X states "Revision. The Secretary may from time to time revise the special information booklet by publishing a notice in the Federal Register." I have yet to see the FR notice.
They are 52 pages. The file was posted after 11:00 a.m. today. A new Q & A 8 was added to pages 12 and 13 of 52 regarding "Title Services and Lender's Title Insurance." They also updated the answer to the last question of the FAQs about the settlement costs booklet. They indicate that the new booklet is on the website. They do not elaborate on when it must be used. Section 3500.6(b) of Reg. X states "Revision. The Secretary may from time to time revise the special information booklet by publishing a notice in the Federal Register." I have yet to see the FR notice.
I can't believe that's all of the updates they are giving us. With all of the questions we have and they post one new Q&A (the booklet info is just an announcement).
HUD - if you're reading this - COME ON! We've got questions (as you can see from these posts. Let's get some answers! PLEASE.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 12/31/09 06:26 PM
For real...and it looks like (tho not a real biggie) that some older sections are still bold.
sorry ReadRegs...misunderstood. I would assume (;)) that the new book would be given out with the new GFE. At least that would make sense.
sorry ReadRegs...misunderstood. I would assume (;)) that the new book would be given out with the new GFE. At least that would make sense.
Posted By: Reed
Re: RESPA changes 1-1-10 - 12/31/09 06:41 PM
Originally Posted By: Spin
I've been reading through this thread but am still confused about where on the GFE to put the Freddie Mac Delivery Fee. It can change depending on the appraisal but it seems to meet the definition of a origination charge, which can't change. HELP!
Would any of you wonderful people be willing to take a stab at this?
Thanks!
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 12/31/09 07:31 PM
Originally Posted By: Spin
Originally Posted By: Spin
I've been reading through this thread but am still confused about where on the GFE to put the Freddie Mac Delivery Fee. It can change depending on the appraisal but it seems to meet the definition of a origination charge, which can't change. HELP!
Would any of you wonderful people be willing to take a stab at this?
Thanks!
We were having issues with this also, so we have just raised our pricing (rate quote) and will not be charging it to the customer.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/31/09 07:54 PM
I just read the new FAQs. They didn't add a new Q&A, they changed an answer. Now they allow you to break out items in Block 4, but you have to give the fees for each ON THE PROVIDER LIST. ARGH!
Joker: I don't see anything else bold except for the 2 revised Q&As.
Quote:
For real...and it looks like (tho not a real biggie) that some older sections are still bold.
Joker: I don't see anything else bold except for the 2 revised Q&As.
Posted By: 80's Lady
Re: RESPA changes 1-1-10 - 12/31/09 07:56 PM
I haven't seen a firm answer on the following, so I apologize if I have overlooked:
On credit reports, since this fee is never exactly the same amount, we are considering just absorbing this and not putting it on the GFE. If we do this, do we still have to list it on the GFE?
Also, I am just confirming. Our (the bank's) doc prep fee is still not considered a pre-paid finance charge on Residential Mortgage Transactions, right? I am questioning everything, which I know is probably ridiculous.
Thanks to all of you who have put so much into this thread -
On credit reports, since this fee is never exactly the same amount, we are considering just absorbing this and not putting it on the GFE. If we do this, do we still have to list it on the GFE?
Also, I am just confirming. Our (the bank's) doc prep fee is still not considered a pre-paid finance charge on Residential Mortgage Transactions, right? I am questioning everything, which I know is probably ridiculous.
Thanks to all of you who have put so much into this thread -
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/31/09 08:01 PM
Originally Posted By: 80's Lady
On credit reports, since this fee is never exactly the same amount, we are considering just absorbing this and not putting it on the GFE. If we do this, do we still have to list it on the GFE?
Yes. When fees are paid AND WHO PAYS FOR THEM is not a factor for the GFE. If it's a settlement cost, it must be listed. You'll need to list the fee in Block 3 and offset it in Block 2. If you don't know the amount of the fee, you might want to use the average charge method.
Quote:
Also, I am just confirming. Our (the bank's) doc prep fee is still not considered a pre-paid finance charge on Residential Mortgage Transactions, right? I am questioning everything, which I know is probably ridiculous.
Yes. RESPA does not affect TIL/APR issues.
Posted By: MarieR
Re: RESPA changes 1-1-10 - 12/31/09 08:11 PM
[quote=David Dickinson]I just read the new FAQs. They didn't add a new Q&A, they changed an answer. Now they allow you to break out items in Block 4, but you have to give the fees for each ON THE PROVIDER LIST. ARGH!
I was really wishing that I had read that wrong!! Since this fee will change for every loan request, how in the world are we suppose to do that?
I really think I am just going to pretend that I haven't seen this until Monday morning. I really think they just made it clear that they have no idea how lending really works.
I was really wishing that I had read that wrong!! Since this fee will change for every loan request, how in the world are we suppose to do that?
I really think I am just going to pretend that I haven't seen this until Monday morning. I really think they just made it clear that they have no idea how lending really works.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 12/31/09 08:21 PM
Quote:
On credit reports, since this fee is never exactly the same amount, we are considering just absorbing this and not putting it on the GFE. If we do this, do we still have to list it on the GFE?
You would still have to disclose it on the GFE, and the HUD.
Quote:
Also, I am just confirming. Our (the bank's) doc prep fee is still not considered a pre-paid finance charge on Residential Mortgage Transactions, right? I am questioning everything, which I know is probably ridiculous.
Reg Z excludes Doc Prep fees if reasonable and bona fide. I would advise you to be able to justify the fee with a cost approach analysis. IOWs be able to show your auditor/examiner you analyzed the cost and didn't just use a SWAG.
Posted By: Mrs. Rizzo
Re: RESPA changes 1-1-10 - 12/31/09 09:08 PM
Just to give everyone a great laugh. I just had a broker email wanting to know "what all is changing on Monday". "What about the new GFE? What do we do?"
I am at stroke level.
It's 3:08 PM on December 31, 2009.
I am at stroke level.
It's 3:08 PM on December 31, 2009.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 12/31/09 09:37 PM
Wow! Ask them what planet they've been on.
Then again, I think we should expect to hear more of this.
Then again, I think we should expect to hear more of this.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 12/31/09 09:38 PM
Tell them, it has been nice working with you in the past. Good Luck in your new job, whatever it is.
<<<So glad we do not have broker relationships.
<<<So glad we do not have broker relationships.
Posted By: Mrs. Rizzo
Re: RESPA changes 1-1-10 - 12/31/09 09:44 PM
The really funny part about it was the wanting to know this stuff so it didn't hold up their loans next week.
<---So having a drink after work.
Happy New Year everyone!
<---So having a drink after work.
Happy New Year everyone!
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 01/02/10 09:47 PM
Originally Posted By: DD Regs
Tell them, it has been nice working with you in the past. Good Luck in your new job, whatever it is.
<<<So glad we do not have broker relationships.
<<<So glad we do not have broker relationships.
Ditto that!
Posted By: manylayers
Re: RESPA changes 1-1-10 - 01/04/10 02:35 PM
NEW FAQ's
I think HUD reverted back to the original 11/19 document. I see on the RESPA page that the FAQ's were revised 12/30, but the document is identical to the one i printed from 11/19. No revised answers or questions.
I got all excited-hoping for some additional clarification.
I think HUD reverted back to the original 11/19 document. I see on the RESPA page that the FAQ's were revised 12/30, but the document is identical to the one i printed from 11/19. No revised answers or questions.
I got all excited-hoping for some additional clarification.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 01/04/10 02:48 PM
Quick (And stupid) question, if the loan application is dated 12/31, and the GFE was not issued when the application was taken, then the NEW GFE should be used?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 01/04/10 02:52 PM
Yes. If the initial GFE was not issued on Thursday, then it must go ont he new form.
We ordered all LO's with open pending apps to complete GFE's before they left Thursday.
We ordered all LO's with open pending apps to complete GFE's before they left Thursday.
Posted By: manylayers
Re: RESPA changes 1-1-10 - 01/04/10 02:52 PM
no stupid questions for RESPA!!
new gfe...and new hud..
new gfe...and new hud..
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/04/10 03:00 PM
Originally Posted By: Just Jay
Yes. If the initial GFE was not issued on Thursday, then it must go ont he new form.
We ordered all LO's with open pending apps to complete GFE's before they left Thursday.
We ordered all LO's with open pending apps to complete GFE's before they left Thursday.
Secondary market issue We need to pull the DU findings in order to lock a loan. Lots of times we'll get a rate lock request and a signed Borrowers release and the original application. The GFE hasn't gone out yet. Can I pull the DU or is that considered a violation without intent to proceed?
Thanks for the hopefully quick answer to my questions.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 01/04/10 03:01 PM
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.
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.
Posted By: Mrs. Rizzo
Re: RESPA changes 1-1-10 - 01/04/10 03:10 PM
Nice...real nice!!!!!!!!!
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/04/10 03:14 PM
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.
Posted By: Mrs. Rizzo
Re: RESPA changes 1-1-10 - 01/04/10 03:17 PM
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.
Thanks for checking on it, Truff.
Posted By: HallieK
Re: RESPA changes 1-1-10 - 01/04/10 03:35 PM
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.
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.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 01/04/10 03:35 PM
I understood it to be the applcation date as well. App date prior to 12/31 = old form.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 01/04/10 03:52 PM
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.
Posted By: MarieR
Re: RESPA changes 1-1-10 - 01/04/10 04:18 PM
We also went with the application date of 1-1-10 to start mandatory use of the new forms.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/04/10 04:52 PM
we used disclosure date.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 01/04/10 04:57 PM
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.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/04/10 05:09 PM
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.
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.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 01/04/10 05:13 PM
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?
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 01/04/10 05:48 PM
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.
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."
Posted By: BNKO
Re: RESPA changes 1-1-10 - 01/04/10 06:30 PM
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.
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.
Posted By: BFaith
Re: RESPA changes 1-1-10 - 01/04/10 07:01 PM
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.
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??
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 01/04/10 07:11 PM
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.
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.
Posted By: BNKO
Re: RESPA changes 1-1-10 - 01/04/10 07:26 PM
Thanks Just Jay for the clarification on the seller credits. I tend to over analyze everything I read these days - gee I wonder why???
Posted By: Working From Home
Re: RESPA changes 1-1-10 - 01/04/10 07:27 PM
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?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 01/04/10 08:00 PM
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.
Posted By: Working From Home
Re: RESPA changes 1-1-10 - 01/04/10 08:07 PM
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
Posted By: TB 12
Re: RESPA changes 1-1-10 - 01/04/10 08:09 PM
You may have to if the loan product changed, or if there were changes that necessitated a new TIL to be sent.
Posted By: Spring Alexander
Re: RESPA changes 1-1-10 - 01/04/10 08:25 PM
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...
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...
Posted By: HallieK
Re: RESPA changes 1-1-10 - 01/04/10 08:29 PM
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.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/04/10 08:33 PM
Thank you, Spring Alexander, for the confirmation. I appreciate you taking the time to answer something asked so far back in this thread.
Posted By: 80's Lady
Re: RESPA changes 1-1-10 - 01/04/10 08:44 PM
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?
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 01/04/10 09:28 PM
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?
Posted By: BFaith
Re: RESPA changes 1-1-10 - 01/04/10 09:29 PM
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.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 01/04/10 09:35 PM
I see your concern then... I define "originated" as when the application was completed.
Posted By: BFaith
Re: RESPA changes 1-1-10 - 01/04/10 09:42 PM
Originally Posted By: Just Jay
I see your concern then... I define "originated" as when the application was completed.
Hmm, never thought of it that way! Definitely makes more sense - thanks!
Posted By: TB 12
Re: RESPA changes 1-1-10 - 01/04/10 09:49 PM
Originally Posted By: ahkcompliance
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?
If the borrower did not express intent to proceed within the first 10 days, you are not bound to the first disclosure and can redisclose after that. If the borrower does intend to proceed, absent a change of circumstance you can not redisclose.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 01/04/10 09:51 PM
If they do show intent within the 10 days, do we havea to give a new GFE with updated infor? or do we just give an new GFE with the rate is locked?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/04/10 11:45 PM
Originally Posted By: ahkcompliance
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?
If the borrowers express an intent to proceed during the 10 days, you are "stuck" with the estimates you gave. If they don't express an intent to proceed until after 10 days, you can reissue a new GFE.
If your providers raise their rates, you are stuck. I suggest you notify all providers that they must give you 60 days before raising rates.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/04/10 11:56 PM
Originally Posted By: ahkcompliance
If they do show intent within the 10 days, do we havea to give a new GFE with updated infor? or do we just give an new GFE with the rate is locked?
If they show intent, you just proceed with what you said.
If/when they lock rates, you must provide a new GFE showing the locked rates/dates and you can change any interest dependent charges affected by the rate lock. You can't change any other fees.
Posted By: elliemae
Re: RESPA changes 1-1-10 - 01/05/10 03:18 PM
Ugh - I apologize as I know I am reverting to "New GFE-101" class with this question, but my mind is gone & I can't find a confirming answer in my search ...
Each revised GFE, issued due to changed circumstance or newly locked rate, must also be available for 10 days. Correct??
And, must the whole GFE be available again for 10-days, or just the revised terms triggered by the changed circumstance?
thanks for help!
Each revised GFE, issued due to changed circumstance or newly locked rate, must also be available for 10 days. Correct??
And, must the whole GFE be available again for 10-days, or just the revised terms triggered by the changed circumstance?
thanks for help!
Posted By: bstritecky
Re: RESPA changes 1-1-10 - 01/05/10 04:58 PM
This may of been asked - but I can't find in the 156 pages!
Do we have to list our optional credit life provider on our service providers list?
Do we have to list our optional credit life provider on our service providers list?
Posted By: trout22
Re: RESPA changes 1-1-10 - 01/05/10 05:09 PM
Originally Posted By: Becky S.
This may of been asked - but I can't find in the 156 pages!
Do we have to list our optional credit life provider on our service providers list?
Do we have to list our optional credit life provider on our service providers list?
No - the optional services do not require a list of service providers. The customer can select anyone (or to decline the service), and it will be an unlimited tolerance.
Posted By: bstritecky
Re: RESPA changes 1-1-10 - 01/05/10 05:25 PM
Thanks!!!!
Posted By: Noogabanker
Re: RESPA changes 1-1-10 - 01/05/10 05:38 PM
New Question-(I think)
What if you have a customer come in and apply for $50,000.00 and we mail the early disclosures based on that loan amount and fees based on that. Then a week later the underwriter decides that he/she will only lend the borrower $25,000.00 because of a low beacon score or slow pays on credit. I don't think this is a "changed circumstance" so what do you do? Do we have no choice but to give the customer the $50,000 with the terms listed on the GFE or can we hope that the customer doesn't express intent to continue, wait 10 business days until the GFE expires and then issue a new one?
I've search the FAQ on the HUD site and the threads but didn't see anything, it seems like this is a bit of a pickle. Any guidance is appreciated.
Thanks!
What if you have a customer come in and apply for $50,000.00 and we mail the early disclosures based on that loan amount and fees based on that. Then a week later the underwriter decides that he/she will only lend the borrower $25,000.00 because of a low beacon score or slow pays on credit. I don't think this is a "changed circumstance" so what do you do? Do we have no choice but to give the customer the $50,000 with the terms listed on the GFE or can we hope that the customer doesn't express intent to continue, wait 10 business days until the GFE expires and then issue a new one?
I've search the FAQ on the HUD site and the threads but didn't see anything, it seems like this is a bit of a pickle. Any guidance is appreciated.
Thanks!
Posted By: Compliance Buzz
Re: RESPA changes 1-1-10 - 01/05/10 05:55 PM
Can someone please tell me where the property search charge is stated on both the GFE and the HUD1A.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/05/10 05:58 PM
I'm not familiar with this fee, Buzz. I'm inclined to say it should go with other title charges but I need an explanation of the fee to be sure.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 01/05/10 05:58 PM
Originally Posted By: mgail
New Question-(I think)
What if you have a customer come in and apply for $50,000.00 and we mail the early disclosures based on that loan amount and fees based on that. Then a week later the underwriter decides that he/she will only lend the borrower $25,000.00 because of a low beacon score or slow pays on credit. I don't think this is a "changed circumstance" so what do you do? Do we have no choice but to give the customer the $50,000 with the terms listed on the GFE or can we hope that the customer doesn't express intent to continue, wait 10 business days until the GFE expires and then issue a new one?
I've search the FAQ on the HUD site and the threads but didn't see anything, it seems like this is a bit of a pickle. Any guidance is appreciated.
Thanks!
What if you have a customer come in and apply for $50,000.00 and we mail the early disclosures based on that loan amount and fees based on that. Then a week later the underwriter decides that he/she will only lend the borrower $25,000.00 because of a low beacon score or slow pays on credit. I don't think this is a "changed circumstance" so what do you do? Do we have no choice but to give the customer the $50,000 with the terms listed on the GFE or can we hope that the customer doesn't express intent to continue, wait 10 business days until the GFE expires and then issue a new one?
I've search the FAQ on the HUD site and the threads but didn't see anything, it seems like this is a bit of a pickle. Any guidance is appreciated.
Thanks!
IMHO, since the customer does not qualify for the loan amount requested, this would be a denial with a counter based on the new terms.
Posted By: Cloud9
Re: RESPA changes 1-1-10 - 01/05/10 06:00 PM
Please Help!
On a loan with an origination fee and all other fees paid by the bank OUTSIDE OF CLOSING, I thought we still needed to show the total of all bank paid fees as a credit on line 2 of the GFE. Harland is indicating that since these fees are POC they do not show up as a credit on line 2. Is that correct? I am so confused!
On a loan with an origination fee and all other fees paid by the bank OUTSIDE OF CLOSING, I thought we still needed to show the total of all bank paid fees as a credit on line 2 of the GFE. Harland is indicating that since these fees are POC they do not show up as a credit on line 2. Is that correct? I am so confused!
Posted By: Noogabanker
Re: RESPA changes 1-1-10 - 01/05/10 06:05 PM
Originally Posted By: Sox in 07
Originally Posted By: mgail
New Question-(I think)
What if you have a customer come in and apply for $50,000.00 and we mail the early disclosures based on that loan amount and fees based on that. Then a week later the underwriter decides that he/she will only lend the borrower $25,000.00 because of a low beacon score or slow pays on credit. I don't think this is a "changed circumstance" so what do you do? Do we have no choice but to give the customer the $50,000 with the terms listed on the GFE or can we hope that the customer doesn't express intent to continue, wait 10 business days until the GFE expires and then issue a new one?
I've search the FAQ on the HUD site and the threads but didn't see anything, it seems like this is a bit of a pickle. Any guidance is appreciated.
Thanks!
What if you have a customer come in and apply for $50,000.00 and we mail the early disclosures based on that loan amount and fees based on that. Then a week later the underwriter decides that he/she will only lend the borrower $25,000.00 because of a low beacon score or slow pays on credit. I don't think this is a "changed circumstance" so what do you do? Do we have no choice but to give the customer the $50,000 with the terms listed on the GFE or can we hope that the customer doesn't express intent to continue, wait 10 business days until the GFE expires and then issue a new one?
I've search the FAQ on the HUD site and the threads but didn't see anything, it seems like this is a bit of a pickle. Any guidance is appreciated.
Thanks!
IMHO, since the customer does not qualify for the loan amount requested, this would be a denial with a counter based on the new terms.
Ok, so would you send an adverse action to deny them for the $50,000.00 and then issue a new GFE?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/05/10 06:35 PM
Originally Posted By: elliemae
Each revised GFE, issued due to changed circumstance or newly locked rate, must also be available for 10 days. Correct??
And, must the whole GFE be available again for 10-days, or just the revised terms triggered by the changed circumstance?
And, must the whole GFE be available again for 10-days, or just the revised terms triggered by the changed circumstance?
Each time you issue a GFE, it (the entire thing) must be available for 10 business days.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/05/10 06:40 PM
Quote:
Ok, so would you send an adverse action to deny them for the $50,000.00 and then issue a new GFE?
Two options:
1. Deny them for the $50M and ask them if they want to reapply for $25M. If they do, issue a GFE representing the new loan amount.
2. Counteroffer them with $25M. If they accept the counteroffer, issue a new GFE representing the new loan amount.
Posted By: Compliance Buzz
Re: RESPA changes 1-1-10 - 01/05/10 06:40 PM
From what I understand, the property search (or report) is ordered by the loan department on home equity products; the report consists of checks for any related mortgages/deeds, outstanding liens, last owner and current assessments.
Posted By: Mrs. Rizzo
Re: RESPA changes 1-1-10 - 01/05/10 06:40 PM
Just want to get confirmation on this:
GFE may only be on letter size paper?
HUD may be on either as it is allowed to change?
GFE may only be on letter size paper?
HUD may be on either as it is allowed to change?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/05/10 07:02 PM
Originally Posted By: Compliance Buzz
From what I understand, the property search (or report) is ordered by the loan department on home equity products; the report consists of checks for any related mortgages/deeds, outstanding liens, last owner and current assessments.
Posted By: Compliance Buzz
Re: RESPA changes 1-1-10 - 01/05/10 07:09 PM
Ok.. "IN" the 1100 series. The fee gets thrown into 1100, but is "Property Report by QRP Company" itemized on 1109 then?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/05/10 07:09 PM
Originally Posted By: Rizzo
Just want to get confirmation on this:
GFE may only be on letter size paper?
HUD may be on either as it is allowed to change?
GFE may only be on letter size paper?
HUD may be on either as it is allowed to change?
Riz, this is my opinion on the paper size of the GFE. I know there is not a font requirement and you can add to lines 3, 6 and 11. I would think it's more important that the content of each individual page doesn't alter...SO, when you think about it that way, if adding to the above lines causes it to "fall over" to another page if you keep it letter, would make me think the lesser of the evils would be to put in on legal and keep the content Page specific.
Anyone who want to think through this differently, please speak up!
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 01/05/10 07:45 PM
I'm hoping some folks will give me their feedback, thoughts etc.
My question involves subordinations - let's say the borrower wants to subordinate an existing second to our new first. Lender XYZ who holds the second charges $300 to do the transaction. My argument is that their fee does not go on my GFE because it is a separate transaction not related to my new mortgage - I only want to be in first lien position.
Does the situation change if a different department of my company charges the fee? Should I disclose the subordination fee that the other department is charging?
My question involves subordinations - let's say the borrower wants to subordinate an existing second to our new first. Lender XYZ who holds the second charges $300 to do the transaction. My argument is that their fee does not go on my GFE because it is a separate transaction not related to my new mortgage - I only want to be in first lien position.
Does the situation change if a different department of my company charges the fee? Should I disclose the subordination fee that the other department is charging?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/05/10 07:45 PM
Buzz, 1109 or 1101 would work too. It is a title service. I'd probably use 1101 myself because of the link (from GFE #4).
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/05/10 07:56 PM
My first thought is that the borrowers don't want to subordinate. You're requiring them to.
Second thought is, at the time of the GFE, you don't know that you'll want a subordination. It could be the borrowers come in wanting to pay off a first and second but the appraisal isn't high enough so they end up subordinating the second.
I guess my bottom line is that I'd say sub fees don't go on the original GFE but needing a sub might be a changed circumstance that would allow you to put the fee on a revised GFE.
Curious to see what others will say.
Second thought is, at the time of the GFE, you don't know that you'll want a subordination. It could be the borrowers come in wanting to pay off a first and second but the appraisal isn't high enough so they end up subordinating the second.
I guess my bottom line is that I'd say sub fees don't go on the original GFE but needing a sub might be a changed circumstance that would allow you to put the fee on a revised GFE.
Curious to see what others will say.
Posted By: elliemae
Re: RESPA changes 1-1-10 - 01/05/10 08:26 PM
Originally Posted By: David Dickinson
Originally Posted By: elliemae
Each revised GFE, issued due to changed circumstance or newly locked rate, must also be available for 10 days. Correct??
And, must the whole GFE be available again for 10-days, or just the revised terms triggered by the changed circumstance?
And, must the whole GFE be available again for 10-days, or just the revised terms triggered by the changed circumstance?
Each time you issue a GFE, it (the entire thing) must be available for 10 business days.
Thank you, David!
Posted By: J2C
Re: RESPA changes 1-1-10 - 01/05/10 08:29 PM
Question regarding attorney fees:
If the attorney we use prepares the loan docs, should that fee be in the origination section on the GFE?
If the attorney we use prepares the loan docs, should that fee be in the origination section on the GFE?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 01/05/10 08:32 PM
RE: Subordinations-some of our borrowers want to keep the second/heloc open and come into the deal intending to subordinate. In some cases depending on the appraisal, the holder of the second may not agree to subordinate and require it be paid off...regardless of the reason why, our experience is the lender who is subordinating wants the fee up front to prepare the subord-they won't wait until closing. Sometimes to expidite we issue the check and charge the borrower at closing to recoup-other times the borrower pays directly. My thought would be if borrower pays directly, it woudl be a POC on hud but not on GFE-if we paid and will charge the borrower to recoup, it would be on the GFE.
Posted By: Princess Romeo
Re: RESPA changes 1-1-10 - 01/05/10 09:08 PM
Originally Posted By: mgail
New Question-(I think)
What if you have a customer come in and apply for $50,000.00 and we mail the early disclosures based on that loan amount and fees based on that. Then a week later the underwriter decides that he/she will only lend the borrower $25,000.00 because of a low beacon score or slow pays on credit. I don't think this is a "changed circumstance" so what do you do? Do we have no choice but to give the customer the $50,000 with the terms listed on the GFE or can we hope that the customer doesn't express intent to continue, wait 10 business days until the GFE expires and then issue a new one?
I've search the FAQ on the HUD site and the threads but didn't see anything, it seems like this is a bit of a pickle. Any guidance is appreciated.
Thanks!
What if you have a customer come in and apply for $50,000.00 and we mail the early disclosures based on that loan amount and fees based on that. Then a week later the underwriter decides that he/she will only lend the borrower $25,000.00 because of a low beacon score or slow pays on credit. I don't think this is a "changed circumstance" so what do you do? Do we have no choice but to give the customer the $50,000 with the terms listed on the GFE or can we hope that the customer doesn't express intent to continue, wait 10 business days until the GFE expires and then issue a new one?
I've search the FAQ on the HUD site and the threads but didn't see anything, it seems like this is a bit of a pickle. Any guidance is appreciated.
Thanks!
Why woudn't this be a "Changed Circumstance?" The first FAQ on Changed Circumstances states:
1) Q: Once a GFE is issued are there any circumstances under which the loan terms or charges can change?
A: Yes. The loan terms or charges can change in the event that there are changed circumstances. ―Changed circumstances‖ is now defined in § 3500.2 as: (1) Acts of God, war, disaster, or other emergency; (2) Information particular to the borrower or transaction that was relied on in providing the GFE and that changes or is found to be inaccurate after the GFE has been provided, which information may include information about the credit quality of the borrower, the amount of the loan, the estimated value of the property, or any other information that was used in providing the GFE; (3) New information particular to the borrower or transaction that was not relied on in providing the GFE; or (4) Other circumstances that are particular to the borrower or transaction, including boundary disputes, the need for flood insurance, or environmental problems.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 01/05/10 09:14 PM
Princess-I would agree if the question was posed that due to the poor fico/pay history, there were pricing adjustments not previously disclosed. The scenario as presented, in my opinion warrants an AAN with counter since the terms of what they applied for changed due to fico/pay history.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/05/10 09:15 PM
Originally Posted By: jennyfromthebloc
Question regarding attorney fees:
If the attorney we use prepares the loan docs, should that fee be in the origination section on the GFE?
If the attorney we use prepares the loan docs, should that fee be in the origination section on the GFE?
Yes, exactly.
Posted By: J2C
Re: RESPA changes 1-1-10 - 01/05/10 09:42 PM
more questions:
on page 18 referring to new construction loans that will not close within 60 calendar days from application,
It states that the loan originator may provide the GFE along with a clear, conspicuous disclosure stating that at any time up until 60 calendar days prior to closing, the originator may issue a revised GFE. Do we have to provide a revised GFE?
We do not lock in the interest rate until the loan has been approved, should the important date field list N/A as stated in FAQ #5 for this ?
on page 18 referring to new construction loans that will not close within 60 calendar days from application,
It states that the loan originator may provide the GFE along with a clear, conspicuous disclosure stating that at any time up until 60 calendar days prior to closing, the originator may issue a revised GFE. Do we have to provide a revised GFE?
We do not lock in the interest rate until the loan has been approved, should the important date field list N/A as stated in FAQ #5 for this ?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/05/10 09:49 PM
1. You don't have to provide a revised GFE, it's your right to do so if you want.
2. If you don't lock the rate, you must still complete #2 in the Dates section (10 business days). When you lock rates, you must complete #1, 3 & 4 and you must extend #2 for 10 more business days.
2. If you don't lock the rate, you must still complete #2 in the Dates section (10 business days). When you lock rates, you must complete #1, 3 & 4 and you must extend #2 for 10 more business days.
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 01/05/10 10:08 PM
I saw something similar to this asked earlier in this thread, but couldn't locate the answer - I did try. I've looked at the GFE instructions and the FAQs but can't find the answer there either. Hoping someone here knows as we have 3 systems all calculating it differently....
Our question relates to how to properly complete the "Summary Of Your Loan" section of the new GFE for an ARM loan - specifically, the payment fields that come at first adjustment and the maximum the payment can rise to over the life of the loan.
On Page 1 of the GFE, in the "Summary of your loan" section, the 7th box down asks: "Even if you make your payment on time, can your monthly amount owed for P & I , and any mortgage insurance rise?" On an adjustable rate loan, this will be answered "yes, the first increase can be in (#1) months and the monthly amount owed can rise to $ (#2) . The maximum it can ever rise to is $ (#3)." My questions are relating to the blanks listed as 1, 2 & 3.
Let's say it's a 5 year adjustable on a 30 year note, with caps of 1% each adjustment, 5% cap over life of loan. Rate starting at 6.00% .
Obviously #1 will show 60 months.
#2 will have a payment amount that it will be at the 5-yr (60 month) adjustment point (1% adjustment). I need to know what balance this payment is to be calculated from: the current balance at the 5 year point, or the original loan amount? The original loan amount doesn't make sense to me, but we are getting three different figures from 3 different mortgage systems and can't tell what that payment is to be calculated from. I have not been able to find guidance on this in the regulation, instructions to the GFE, or in the FAQ to provide to the vendors to tell them how it's supposed to be done.
#3 is supposed to show what the maximum monthly payment amount can ever rise to (at the ceiling). Again...what balance is to be used to calculate this payment? On that loan scenario above, the max rate is could go up to would be 11.00% over the life of the loan...what balance is used to calculate that payment?
Thank you very much for your assistance!
Our question relates to how to properly complete the "Summary Of Your Loan" section of the new GFE for an ARM loan - specifically, the payment fields that come at first adjustment and the maximum the payment can rise to over the life of the loan.
On Page 1 of the GFE, in the "Summary of your loan" section, the 7th box down asks: "Even if you make your payment on time, can your monthly amount owed for P & I , and any mortgage insurance rise?" On an adjustable rate loan, this will be answered "yes, the first increase can be in (#1) months and the monthly amount owed can rise to $ (#2) . The maximum it can ever rise to is $ (#3)." My questions are relating to the blanks listed as 1, 2 & 3.
Let's say it's a 5 year adjustable on a 30 year note, with caps of 1% each adjustment, 5% cap over life of loan. Rate starting at 6.00% .
Obviously #1 will show 60 months.
#2 will have a payment amount that it will be at the 5-yr (60 month) adjustment point (1% adjustment). I need to know what balance this payment is to be calculated from: the current balance at the 5 year point, or the original loan amount? The original loan amount doesn't make sense to me, but we are getting three different figures from 3 different mortgage systems and can't tell what that payment is to be calculated from. I have not been able to find guidance on this in the regulation, instructions to the GFE, or in the FAQ to provide to the vendors to tell them how it's supposed to be done.
#3 is supposed to show what the maximum monthly payment amount can ever rise to (at the ceiling). Again...what balance is to be used to calculate this payment? On that loan scenario above, the max rate is could go up to would be 11.00% over the life of the loan...what balance is used to calculate that payment?
Thank you very much for your assistance!
Posted By: Brooks1435
Re: RESPA changes 1-1-10 - 01/05/10 10:27 PM
So even though you quote OTI, if it is not purchased it would not show up on the HUD, correct?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/05/10 10:29 PM
If something isn't purchased, it would not show up on the Settlement Statement. You only list actual fees there.
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 01/05/10 11:40 PM
Respa Queen: Regarding subordinations, we also have wrestled with this item. Here is our position. I am interested in how others are handling this as well.
We are taking the conservative approach on this one and including it as a loan origination charge when it is known. Our Loan Originators have to ask about this at time of application and if the answer is yes, we increase our line 1 fee by $150 to allow for subordinations. In our area, this is generally enough for other lenders and the same amount we charge other lenders. If the actual cost is less, we will still charge $150 as we have extra time and expense to deal with the subordination. We are also reflecting it as an APR item.
Regards,
We are taking the conservative approach on this one and including it as a loan origination charge when it is known. Our Loan Originators have to ask about this at time of application and if the answer is yes, we increase our line 1 fee by $150 to allow for subordinations. In our area, this is generally enough for other lenders and the same amount we charge other lenders. If the actual cost is less, we will still charge $150 as we have extra time and expense to deal with the subordination. We are also reflecting it as an APR item.
Regards,
Posted By: pjs
Re: RESPA changes 1-1-10 - 01/06/10 01:54 PM
Originally Posted By: OldSchoolBanker
Respa Queen: Regarding subordinations, we also have wrestled with this item. Here is our position. I am interested in how others are handling this as well.
We are taking the conservative approach on this one and including it as a loan origination charge when it is known. Our Loan Originators have to ask about this at time of application and if the answer is yes, we increase our line 1 fee by $150 to allow for subordinations. In our area, this is generally enough for other lenders and the same amount we charge other lenders. If the actual cost is less, we will still charge $150 as we have extra time and expense to deal with the subordination. We are also reflecting it as an APR item.
Regards,
We are taking the conservative approach on this one and including it as a loan origination charge when it is known. Our Loan Originators have to ask about this at time of application and if the answer is yes, we increase our line 1 fee by $150 to allow for subordinations. In our area, this is generally enough for other lenders and the same amount we charge other lenders. If the actual cost is less, we will still charge $150 as we have extra time and expense to deal with the subordination. We are also reflecting it as an APR item.
Regards,
Second opinions eleswhere say that the subordination fee is an origination charge. We are putting it in our origination charge. If chance it is not known at the time the GFE is given and is later found out then can the loan application be denied because the lender required first position?
Our compliance consultant stated that a changed circumstance takes place when you didn't know about the subordination fee but tell me how the origination charge can be changed when HUD is specific that 801 can only change if the loan program changed or the origination fee was a percent of the loan amount. He did not get back to me on that.
Posted By: Cloud9
Re: RESPA changes 1-1-10 - 01/06/10 02:34 PM
ANYONE?? PLEASE??
Originally Posted By: Cloud9
Please Help!
On a loan WITH an origination fee charged to the customer and all other fees paid by the bank OUTSIDE OF CLOSING, I thought we still needed to show the total of all bank paid fees as a credit on line 2 of the GFE. Harland is indicating that since these fees are POC they do not show up as a credit on line 2. Is that correct? I am so confused!
On a loan WITH an origination fee charged to the customer and all other fees paid by the bank OUTSIDE OF CLOSING, I thought we still needed to show the total of all bank paid fees as a credit on line 2 of the GFE. Harland is indicating that since these fees are POC they do not show up as a credit on line 2. Is that correct? I am so confused!
Posted By: J2C
Re: RESPA changes 1-1-10 - 01/06/10 02:35 PM
Originally Posted By: David Dickinson
1. You don't have to provide a revised GFE, it's your right to do so if you want.
2. If you don't lock the rate, you must still complete #2 in the Dates section (10 business days). When you lock rates, you must complete #1, 3 & 4 and you must extend #2 for 10 more business days.
2. If you don't lock the rate, you must still complete #2 in the Dates section (10 business days). When you lock rates, you must complete #1, 3 & 4 and you must extend #2 for 10 more business days.
David, thanks for your response. Can you direct me to where you can find the information you provided in answer #2?
Thanks
Posted By: swiggles
Re: RESPA changes 1-1-10 - 01/06/10 03:49 PM
We're having to provide and pay an interpreter at a closing for a loan to a hear-impaired individual. Since we're paying the fee, it will be POC. Would this fee be listed in the 1300 series?
Posted By: Devsus
Re: RESPA changes 1-1-10 - 01/06/10 03:53 PM
Would anyone be willing to share the wording on their disclosure for new home pruchases wehre settlement will be more than 60 days and we may reissue the GFE at any time up to 60 days before settlement?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/06/10 04:25 PM
Did you all see this post where Old School Banker got a response from HUD saying .......wait for it........................
AN ESCROW WAIVER FEE IS A CHANGED CIRCUMSTANCE AND YOU CAN PUT THE ESCROW WAIVER FEE IN THE ORIGINATION FEE BOX ON THE REVISED GFE
AN ESCROW WAIVER FEE IS A CHANGED CIRCUMSTANCE AND YOU CAN PUT THE ESCROW WAIVER FEE IN THE ORIGINATION FEE BOX ON THE REVISED GFE
Posted By: biz
Re: RESPA changes 1-1-10 - 01/06/10 04:26 PM
Probably more stupid questions . . . but then that seems to be the norm for me for the last several weeks!!!!!
#1)If a customer arrives at the bank, ready to make application and has with him, his tax returns we can accept them at that time, even though the GFE will not be issued at that time, it will be mailed, and the receipt of such is not dependent on the issuing of the GFE within the next 3 days, right?
#2) Block 4-if we do not allow the customer to shop for all the providers used that make up the estimate that goes in this block they do not have to be listed on the provider list, right? 12/30 FAQ #8 on page 12/13 seems to say otherwise.
(We have a fee paid to the county, for a tax certificate that must be presented when recording a deed. The charge can not be shopped for. This type of fee was specifically listed in the old rules as 1100 series charge-its not covered in the new ones. Its to assure the Register of Deeds that all property taxes are paid. It is not a tax service.)
Thanks again.
#1)If a customer arrives at the bank, ready to make application and has with him, his tax returns we can accept them at that time, even though the GFE will not be issued at that time, it will be mailed, and the receipt of such is not dependent on the issuing of the GFE within the next 3 days, right?
#2) Block 4-if we do not allow the customer to shop for all the providers used that make up the estimate that goes in this block they do not have to be listed on the provider list, right? 12/30 FAQ #8 on page 12/13 seems to say otherwise.
(We have a fee paid to the county, for a tax certificate that must be presented when recording a deed. The charge can not be shopped for. This type of fee was specifically listed in the old rules as 1100 series charge-its not covered in the new ones. Its to assure the Register of Deeds that all property taxes are paid. It is not a tax service.)
Thanks again.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 01/06/10 04:53 PM
New Question: Ok, did I miss something or is this Title Agent just practicing som etype of CYA?
We have a Title agency tell us today that they cannot process an order for Title Work without a GFE "Per the new RESPA rules"
I asked them to provide Chapter and Verse for their standing. I said, we would be providing a Good Faith for them to process the closing docs, but they did not need it to Order the Title Seach.
Am I wrong?
We have a Title agency tell us today that they cannot process an order for Title Work without a GFE "Per the new RESPA rules"
I asked them to provide Chapter and Verse for their standing. I said, we would be providing a Good Faith for them to process the closing docs, but they did not need it to Order the Title Seach.
Am I wrong?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/06/10 05:06 PM
Nope, you're not wrong, DD. Methinks they want to see what you put down in Block 4 so they know what you told the borrower it would cost. Maybe they think it affects what they bill for.
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 01/06/10 05:42 PM
Quote:
Did you all see this post where Old School Banker got a response from HUD saying .......wait for it........................
AN ESCROW WAIVER FEE IS A CHANGED CIRCUMSTANCE AND YOU CAN PUT THE ESCROW WAIVER FEE IN THE ORIGINATION FEE BOX ON THE REVISED GFE
AN ESCROW WAIVER FEE IS A CHANGED CIRCUMSTANCE AND YOU CAN PUT THE ESCROW WAIVER FEE IN THE ORIGINATION FEE BOX ON THE REVISED GFE
Yes, and I emailed HUD back asking for clarification as this contradicted what HUD had told us.
In their response, they agreed there were contradictions, but at this time believe it's a changed circumstance. In terms of whether or not you can change block 1 for this - they said there's no final verdict on that, but most likely you will have to treat it as a block 2 item like discount points. I posted HUD's answers to us on that other thread.
Posted By: biz
Re: RESPA changes 1-1-10 - 01/06/10 05:54 PM
DD-ask if they would like you to call another provider!!!!
Posted By: pjs
Re: RESPA changes 1-1-10 - 01/06/10 05:56 PM
Originally Posted By: FlamingoGal
Quote:
Did you all see this post where Old School Banker got a response from HUD saying .......wait for it........................
AN ESCROW WAIVER FEE IS A CHANGED CIRCUMSTANCE AND YOU CAN PUT THE ESCROW WAIVER FEE IN THE ORIGINATION FEE BOX ON THE REVISED GFE
AN ESCROW WAIVER FEE IS A CHANGED CIRCUMSTANCE AND YOU CAN PUT THE ESCROW WAIVER FEE IN THE ORIGINATION FEE BOX ON THE REVISED GFE
Yes, and I emailed HUD back asking for clarification as this contradicted what HUD had told us.
In their response, they agreed there were contradictions, but at this time believe it's a changed circumstance. In terms of whether or not you can change block 1 for this - they said there's no final verdict on that, but most likely you will have to treat it as a block 2 item like discount points. I posted HUD's answers to us on that other thread.
Thanks FlamingoGal- I was going to say maybe we should ask that same question tomorrow and get a different answer. It would have to be in HUD's F&Q and in writing before I tell the loan people that Block 1 can be changed.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/06/10 06:45 PM
Originally Posted By: biz
Probably more stupid questions . . . but then that seems to be the norm for me for the last several weeks!!!!!
#1)If a customer arrives at the bank, ready to make application and has with him, his tax returns we can accept them at that time, even though the GFE will not be issued at that time, it will be mailed, and the receipt of such is not dependent on the issuing of the GFE within the next 3 days, right? That's right, see FR page 68240, 3500.7(a)(5).
#2) Block 4-if we do not allow the customer to shop for all the providers used that make up the estimate that goes in this block they do not have to be listed on the provider list, right? 12/30 FAQ #8 on page 12/13 seems to say otherwise. Right, if you don't allow them to shop, you don't have to provide a list. What #8 is saying is that if you use a different provider for settlement, itself, vs title insurance and services, you have to list both AND their FEES...but this is if you allow them to shop...or at least that's the way I read it. We don't do that, so I haven't concentrated much on it.
(We have a fee paid to the county, for a tax certificate that must be presented when recording a deed. The charge can not be shopped for. This type of fee was specifically listed in the old rules as 1100 series charge-its not covered in the new ones. Its to assure the Register of Deeds that all property taxes are paid. It is not a tax service.) My opinion on this type fee would be that it would go in the 1200 series-it's paid to the county and it's related to assuring THEM that taxes are paid
Thanks again.
#1)If a customer arrives at the bank, ready to make application and has with him, his tax returns we can accept them at that time, even though the GFE will not be issued at that time, it will be mailed, and the receipt of such is not dependent on the issuing of the GFE within the next 3 days, right? That's right, see FR page 68240, 3500.7(a)(5).
#2) Block 4-if we do not allow the customer to shop for all the providers used that make up the estimate that goes in this block they do not have to be listed on the provider list, right? 12/30 FAQ #8 on page 12/13 seems to say otherwise. Right, if you don't allow them to shop, you don't have to provide a list. What #8 is saying is that if you use a different provider for settlement, itself, vs title insurance and services, you have to list both AND their FEES...but this is if you allow them to shop...or at least that's the way I read it. We don't do that, so I haven't concentrated much on it.
(We have a fee paid to the county, for a tax certificate that must be presented when recording a deed. The charge can not be shopped for. This type of fee was specifically listed in the old rules as 1100 series charge-its not covered in the new ones. Its to assure the Register of Deeds that all property taxes are paid. It is not a tax service.) My opinion on this type fee would be that it would go in the 1200 series-it's paid to the county and it's related to assuring THEM that taxes are paid
Thanks again.
Posted By: swiggles
Re: RESPA changes 1-1-10 - 01/06/10 06:55 PM
Originally Posted By: swiggles
We're having to provide and pay an interpreter at a closing for a loan to a hear-impaired individual. Since we're paying the fee, it will be POC. Would this fee be listed in the 1300 series?
Does anyone know the answer to this question? Sorry, this is the first exposure we've had to this type of a fee and the fact that we're required to pay it for the borrower.
Posted By: CDTR
Re: RESPA changes 1-1-10 - 01/06/10 07:04 PM
Would anyone be willing to help me get a little higher comfort level with disclosing fees for inspections in conjunction with construction loan draws? My understanding is that they are to be included in the origination fee in block 1 of the GFE and on line 801 of the settlement statement if they are paid to the bank. If that is correct, would the same be true if they are collected by the bank but passed on to the appraiser who completed the inspections? Would the timing of collecting the fees have any effect on disclosures, for example, collecting the fees at closing vs. collecting at the time of each inspection? Thanks so much for any clarification you can provide.
Posted By: BNKO
Re: RESPA changes 1-1-10 - 01/06/10 07:06 PM
RESPA states that you can't collect a fee, other than the credit report, until after the borrower shows intent to proceed. What if the seller is paying for the appraisal? Would it be acceptable to collect this fee from the seller, before the borrower shows intent?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/06/10 07:08 PM
I wouldn't think so. Besides, why would you order an appraisal when the borrower hasn't decided to go with your bank yet?
Posted By: BNKO
Re: RESPA changes 1-1-10 - 01/06/10 07:21 PM
That was my exact thought, but try telling that to a loan officer. They just don't listen to reason.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/06/10 07:33 PM
That's why I'd just tell them 'no, you can't.' No fee (from ANYONE) other than credit report until intent to proceed. period.
Your other option is 'No but if you decide to go ahead anyway, I'll need your signature on this memo so I can have it on hand to show the examiners.'
Your other option is 'No but if you decide to go ahead anyway, I'll need your signature on this memo so I can have it on hand to show the examiners.'
Posted By: 80's Lady
Re: RESPA changes 1-1-10 - 01/06/10 07:39 PM
Originally Posted By: FlamingoGal
I saw something similar to this asked earlier in this thread, but couldn't locate the answer - I did try. I've looked at the GFE instructions and the FAQs but can't find the answer there either. Hoping someone here knows as we have 3 systems all calculating it differently....
Our question relates to how to properly complete the "Summary Of Your Loan" section of the new GFE for an ARM loan - specifically, the payment fields that come at first adjustment and the maximum the payment can rise to over the life of the loan.
On Page 1 of the GFE, in the "Summary of your loan" section, the 7th box down asks: "Even if you make your payment on time, can your monthly amount owed for P & I , and any mortgage insurance rise?" On an adjustable rate loan, this will be answered "yes, the first increase can be in (#1) months and the monthly amount owed can rise to $ (#2) . The maximum it can ever rise to is $ (#3)." My questions are relating to the blanks listed as 1, 2 & 3.
Let's say it's a 5 year adjustable on a 30 year note, with caps of 1% each adjustment, 5% cap over life of loan. Rate starting at 6.00% .
Obviously #1 will show 60 months.
#2 will have a payment amount that it will be at the 5-yr (60 month) adjustment point (1% adjustment). I need to know what balance this payment is to be calculated from: the current balance at the 5 year point, or the original loan amount? The original loan amount doesn't make sense to me, but we are getting three different figures from 3 different mortgage systems and can't tell what that payment is to be calculated from. I have not been able to find guidance on this in the regulation, instructions to the GFE, or in the FAQ to provide to the vendors to tell them how it's supposed to be done.
#3 is supposed to show what the maximum monthly payment amount can ever rise to (at the ceiling). Again...what balance is to be used to calculate this payment? On that loan scenario above, the max rate is could go up to would be 11.00% over the life of the loan...what balance is used to calculate that payment?
Thank you very much for your assistance!
Our question relates to how to properly complete the "Summary Of Your Loan" section of the new GFE for an ARM loan - specifically, the payment fields that come at first adjustment and the maximum the payment can rise to over the life of the loan.
On Page 1 of the GFE, in the "Summary of your loan" section, the 7th box down asks: "Even if you make your payment on time, can your monthly amount owed for P & I , and any mortgage insurance rise?" On an adjustable rate loan, this will be answered "yes, the first increase can be in (#1) months and the monthly amount owed can rise to $ (#2) . The maximum it can ever rise to is $ (#3)." My questions are relating to the blanks listed as 1, 2 & 3.
Let's say it's a 5 year adjustable on a 30 year note, with caps of 1% each adjustment, 5% cap over life of loan. Rate starting at 6.00% .
Obviously #1 will show 60 months.
#2 will have a payment amount that it will be at the 5-yr (60 month) adjustment point (1% adjustment). I need to know what balance this payment is to be calculated from: the current balance at the 5 year point, or the original loan amount? The original loan amount doesn't make sense to me, but we are getting three different figures from 3 different mortgage systems and can't tell what that payment is to be calculated from. I have not been able to find guidance on this in the regulation, instructions to the GFE, or in the FAQ to provide to the vendors to tell them how it's supposed to be done.
#3 is supposed to show what the maximum monthly payment amount can ever rise to (at the ceiling). Again...what balance is to be used to calculate this payment? On that loan scenario above, the max rate is could go up to would be 11.00% over the life of the loan...what balance is used to calculate that payment?
Thank you very much for your assistance!
We have similar questions FlamingoGal. Did you receive a response to this that I missed? I just want to be sure it doesn't get lost.
Posted By: Compliance Chick
Re: RESPA changes 1-1-10 - 01/06/10 07:39 PM
My mortgage dept. wants to be able to provide a potential applicant a closing cost estimate worksheet or be able to provide an applicant that has NOT selected a property a closing cost estimate worksheet. This would be a worksheet that outlines the proposed loan information like loan amount,rate, term and also provides estimates as to detailed closing costs. It of course would have language on the bottom that this is not a good faith estimate but relects estimates of charges you are likely to incur, that they are eatimates and these estimates are provided to assist potential applcants in evaluaitng financing needs, rates subject to chage, at time of applcaition you will be provided a Good Faith Estimate, etc.
What do you think? Can we give out such a documant?
What do you think? Can we give out such a documant?
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 01/06/10 07:44 PM
Originally Posted By: Compliance Chick
My mortgage dept. wants to be able to provide a potential applicant a closing cost estimate worksheet or be able to provide an applicant that has NOT selected a property a closing cost estimate worksheet. This would be a worksheet that outlines the proposed loan information like loan amount,rate, term and also provides estimates as to detailed closing costs. It of course would have language on the bottom that this is not a good faith estimate but relects estimates of charges you are likely to incur, that they are eatimates and these estimates are provided to assist potential applcants in evaluaitng financing needs, rates subject to chage, at time of applcaition you will be provided a Good Faith Estimate, etc.
What do you think? Can we give out such a documant?
What do you think? Can we give out such a documant?
Your people mus tbe thinking the same as mine. I got the smae question today. (Less specific than yours, but would tell "typical cost" associated with the type of loan you are seeking)
Posted By: Amos
Re: RESPA changes 1-1-10 - 01/06/10 07:44 PM
I personally heard Ivy Jackson say at a RESPA workshop that HUD has no objections to providing this type of document, as long as it is clearly labeled so the applicant understands it is not a Good Faith Estimate.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 01/06/10 07:48 PM
we are testing such a form... and possibly even giving it with their other early docs
Posted By: manylayers
Re: RESPA changes 1-1-10 - 01/06/10 08:42 PM
we are also test driving a similar form...it's clearly marked that it's for informational purposes only...and will NOT be issued if we have enough information to constitute an application under RESPA.
For enhanced customer service, we are including items that we know will need to be paid at closing, but are not on the new HUD, such as real estate taxes.
For enhanced customer service, we are including items that we know will need to be paid at closing, but are not on the new HUD, such as real estate taxes.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 01/06/10 08:44 PM
We are doing the same....
Posted By: Reed
Re: RESPA changes 1-1-10 - 01/06/10 08:49 PM
::Dumb question of the day alert::
You only have to list owner's title insurance on purchase transactions, correct?
Thanks
You only have to list owner's title insurance on purchase transactions, correct?
Thanks
Posted By: MarieR
Re: RESPA changes 1-1-10 - 01/06/10 09:20 PM
Originally Posted By: Spin
::Dumb question of the day alert::
You only have to list owner's title insurance on purchase transactions, correct?
Thanks
You only have to list owner's title insurance on purchase transactions, correct?
Thanks
Correct
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/06/10 09:28 PM
Originally Posted By: swiggles
Originally Posted By: swiggles
We're having to provide and pay an interpreter at a closing for a loan to a hear-impaired individual. Since we're paying the fee, it will be POC. Would this fee be listed in the 1300 series?
Does anyone know the answer to this question? Sorry, this is the first exposure we've had to this type of a fee and the fact that we're required to pay it for the borrower.
I'll take a stab at this since no one is trying.
I don't think this is a settlement service and since your paying for it, I don't think it needs to go on the GFE or Settlement Statement.
Quite honestly, I'm guessing.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/06/10 09:35 PM
Originally Posted By: jennyfromthebloc
Originally Posted By: David Dickinson
2. If you don't lock the rate, you must still complete #2 in the Dates section (10 business days). When you lock rates, you must complete #1, 3 & 4 and you must extend #2 for 10 more business days.
David, thanks for your response. Can you direct me to where you can find the information you provided in answer #2?
See Q&A #2, 4, 5 & 6 in the "GFE-Important Dates" section of the FAQs.
Posted By: Comply Wren
Re: RESPA changes 1-1-10 - 01/06/10 09:58 PM
Wow, I think all our great minds must think alike!! We are "test driving" a similar form at our bank. Ours is basically an estimate of anticipated closing costs to be given in conjuction with our prequal certificate. We also developed a GFE "supplement" to show a truer picture of what they need to close (i.e. seller assist, downpayment, items they would pay that aren't on the GFE, etc.)
We are "test driving" a similar form at our bank. Ours is basically an estimate of anticipated closing costs to be given in conjuction with our prequal certificate. We also developed a GFE "supplement" to show a truer picture of what they need to close (i.e. seller assist, downpayment, items they would pay that aren't on the GFE, etc.)
Posted By: ahou
Re: RESPA changes 1-1-10 - 01/06/10 11:11 PM
Oh goodness, one of our ln officers forgot to mark the box for escrowing taxes and gave the GFE to the customer with the wrong amount in box 9 for the inital deposit. He called to lock the rate and she is giving a revised GFE because of the rate lock. I guess the reason "quoted the wrong init escrow amt" is not a changed circumstance...and we can't change it on the revised GFE, correct?
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 01/06/10 11:14 PM
80's Lady....
No - no answer yet here or from HUD.
May have the answer in the Q & A from David's GREAT webinar - that you simply take the highest possible rate and apply that to the original principal balance to determine the maximum payment - is that correct, David?
Quote:
Originally Posted By: FlamingoGal
I saw something similar to this asked earlier in this thread, but couldn't locate the answer - I did try. I've looked at the GFE instructions and the FAQs but can't find the answer there either. Hoping someone here knows as we have 3 systems all calculating it differently....
Our question relates to how to properly complete the "Summary Of Your Loan" section of the new GFE for an ARM loan - specifically, the payment fields that come at first adjustment and the maximum the payment can rise to over the life of the loan.
On Page 1 of the GFE, in the "Summary of your loan" section, the 7th box down asks: "Even if you make your payment on time, can your monthly amount owed for P & I , and any mortgage insurance rise?" On an adjustable rate loan, this will be answered "yes, the first increase can be in (#1) months and the monthly amount owed can rise to $ (#2) . The maximum it can ever rise to is $ (#3)." My questions are relating to the blanks listed as 1, 2 & 3.
Let's say it's a 5 year adjustable on a 30 year note, with caps of 1% each adjustment, 5% cap over life of loan. Rate starting at 6.00% .
Obviously #1 will show 60 months.
#2 will have a payment amount that it will be at the 5-yr (60 month) adjustment point (1% adjustment). I need to know what balance this payment is to be calculated from: the current balance at the 5 year point, or the original loan amount? The original loan amount doesn't make sense to me, but we are getting three different figures from 3 different mortgage systems and can't tell what that payment is to be calculated from. I have not been able to find guidance on this in the regulation, instructions to the GFE, or in the FAQ to provide to the vendors to tell them how it's supposed to be done.
#3 is supposed to show what the maximum monthly payment amount can ever rise to (at the ceiling). Again...what balance is to be used to calculate this payment? On that loan scenario above, the max rate is could go up to would be 11.00% over the life of the loan...what balance is used to calculate that payment?
Thank you very much for your assistance!
I saw something similar to this asked earlier in this thread, but couldn't locate the answer - I did try. I've looked at the GFE instructions and the FAQs but can't find the answer there either. Hoping someone here knows as we have 3 systems all calculating it differently....
Our question relates to how to properly complete the "Summary Of Your Loan" section of the new GFE for an ARM loan - specifically, the payment fields that come at first adjustment and the maximum the payment can rise to over the life of the loan.
On Page 1 of the GFE, in the "Summary of your loan" section, the 7th box down asks: "Even if you make your payment on time, can your monthly amount owed for P & I , and any mortgage insurance rise?" On an adjustable rate loan, this will be answered "yes, the first increase can be in (#1) months and the monthly amount owed can rise to $ (#2) . The maximum it can ever rise to is $ (#3)." My questions are relating to the blanks listed as 1, 2 & 3.
Let's say it's a 5 year adjustable on a 30 year note, with caps of 1% each adjustment, 5% cap over life of loan. Rate starting at 6.00% .
Obviously #1 will show 60 months.
#2 will have a payment amount that it will be at the 5-yr (60 month) adjustment point (1% adjustment). I need to know what balance this payment is to be calculated from: the current balance at the 5 year point, or the original loan amount? The original loan amount doesn't make sense to me, but we are getting three different figures from 3 different mortgage systems and can't tell what that payment is to be calculated from. I have not been able to find guidance on this in the regulation, instructions to the GFE, or in the FAQ to provide to the vendors to tell them how it's supposed to be done.
#3 is supposed to show what the maximum monthly payment amount can ever rise to (at the ceiling). Again...what balance is to be used to calculate this payment? On that loan scenario above, the max rate is could go up to would be 11.00% over the life of the loan...what balance is used to calculate that payment?
Thank you very much for your assistance!
Quote:
We have similar questions FlamingoGal. Did you receive a response to this that I missed? I just want to be sure it doesn't get lost.
No - no answer yet here or from HUD.
May have the answer in the Q & A from David's GREAT webinar - that you simply take the highest possible rate and apply that to the original principal balance to determine the maximum payment - is that correct, David?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/06/10 11:30 PM
Originally Posted By: ahou
Oh goodness, one of our ln officers forgot to mark the box for escrowing taxes and gave the GFE to the customer with the wrong amount in box 9 for the inital deposit. He called to lock the rate and she is giving a revised GFE because of the rate lock. I guess the reason "quoted the wrong init escrow amt" is not a changed circumstance...and we can't change it on the revised GFE, correct?
You're correct that you can't change the escrow amount but the escrow deposit fits in the "unlimited tolerance" bucket. Don't sweat it.
Posted By: ShariSpiker
Re: RESPA changes 1-1-10 - 01/07/10 02:00 PM
What is the exposure, if any, on a prequal when a Lender chooses to not have the customer sign something before running a credit report?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/07/10 02:15 PM
There's no exposure from a credit report standpoint.
You do have an application and owe a denial if you view the credit report and say "no, we can't make you a loan".
If you say "I think we can make you a loan up to $X", you have an application, but nothing is triggered at this time.
You do have an application and owe a denial if you view the credit report and say "no, we can't make you a loan".
If you say "I think we can make you a loan up to $X", you have an application, but nothing is triggered at this time.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 01/07/10 02:15 PM
Worst case for pulling a report without a permissible purpose:
§ 619. Obtaining information under false pretenses [15 U.S.C. § 1681q] Any person who knowingly and willfully obtains information on a consumer from a consumer reporting agency under false pretenses shall be fined under title 18, United States Code, imprisoned for not more than 2 years, or both.
§ 619. Obtaining information under false pretenses [15 U.S.C. § 1681q] Any person who knowingly and willfully obtains information on a consumer from a consumer reporting agency under false pretenses shall be fined under title 18, United States Code, imprisoned for not more than 2 years, or both.
Posted By: RR Sarah
Re: RESPA changes 1-1-10 - 01/07/10 02:51 PM
I apologize if this question has already been asked and answered. Prior to the changes, when we input the origination charge into our loan system for 1098 reporting we entered only our origination fee (not including underwriting, processing, applications fees, etc). We're just a little confused on what to do now. Do we enter the bundled amount from the GFE or just pull out the true origination fee?
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 01/07/10 03:15 PM
Any points reported on the 1098 would have to meet the IRS regulations, i.e., a percentage of the loan amount. So, if your orignation fee is a flat amount it wouldn't qualify now. Nothing has changed as far as points reporting for 1098 purposes.
Posted By: RR Sarah
Re: RESPA changes 1-1-10 - 01/07/10 03:41 PM
Thanks Randy!
Posted By: Brooks1435
Re: RESPA changes 1-1-10 - 01/07/10 03:41 PM
We do not require OTI. Obviously we will quote OTI on the GFE for a purchase but had not planned to on other transactions. If the customer chooses to add OTI after a GFE is issued on a refinance, do we need to redisclose and add to the GFE even though this is not something we require to do the loan?
Posted By: comp123
Re: RESPA changes 1-1-10 - 01/07/10 07:14 PM
Forgive me if this has been asked before. On the GFE where it asks the originator, do we have to put the Main Office even though it is at a branch? It has been said that HUD said yes, it must be main office but I do not see where that is in writing? Basically, by putting the main office on the GFE in our software, it is causing problems with the rest of the documents.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/07/10 07:28 PM
I have seen nothing that makes a distinction on the actual address. It states it must have the business name, and not just the originator's name, but could include both. It does not specifically state only the main office address can be used.
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 01/07/10 07:31 PM
Must there be an entry in block 10 on the GFE?
Posted By: pjs
Re: RESPA changes 1-1-10 - 01/07/10 07:45 PM
Originally Posted By: raitchjay
Must there be an entry in block 10 on the GFE?
We don't on in house loans but loans we sell to will have the odd days interest.
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 01/07/10 07:49 PM
Ok...same here...just confirming my thinking. Thank you.
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 01/07/10 07:52 PM
Is there a way to save particular parts of this thread that you want to refer back to later? i find it nearly impossible to search back thru this for reference purposes....
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/07/10 08:53 PM
cut/paste/put in a word doc (my best suggestion)
Posted By: try2comply
Re: RESPA changes 1-1-10 - 01/07/10 11:11 PM
Does anyone know how to handle the addition of a co-borrower after the original GFE has been sent out to the primary borrower with just the primary borrowers name on it? Is it OK to issue a new GFE when we add a co-borrower? Is that an allowed "changed circumstance"?
Posted By: Carter's Mom
Re: RESPA changes 1-1-10 - 01/08/10 01:38 PM
Is anyone out there using LaserPro that can help me? I am trying to figure out how the software is calculating the payment on a 9 month variable rate interest only advancing construction loan. The full loan amount is $266,400. The initial interest rate is 5.5%. LaserPro is calculating an initial payment of $561.99. I can't seem to get that payment regardless of how I try to figure it.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 01/08/10 01:48 PM
Looks like you have the loan set up on bi-monthly payments.
Posted By: 2Confused2go on
Re: RESPA changes 1-1-10 - 01/08/10 02:31 PM
Section 3500.6(b) of Reg. X states "Revision. The Secretary may from time to time revise the special information booklet by publishing a notice in the Federal Register."
I see the information booklet was released. Has the notice been published in the Federal Register?
I see the information booklet was released. Has the notice been published in the Federal Register?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/08/10 02:38 PM
yes
Posted By: biz
Re: RESPA changes 1-1-10 - 01/08/10 02:59 PM
David-is the answer to Flamigo Girls & 80's Girl Q about ARM payments . . . "yes, use the original loan balance"
Posted By: Carter's Mom
Re: RESPA changes 1-1-10 - 01/08/10 03:06 PM
Originally Posted By: rlcarey
Looks like you have the loan set up on bi-monthly payments.
So do you think the accurate way to calculate the initial payment on an advancing construction loan is to assume that 1/2 of the loan balance is advanced initially?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/08/10 03:20 PM
Here's one I don't recall us hitting on in this thread....
If for some reason the loan can't close by the expiration date would the bank asking for an extension of the rate lock be considered a changed circumstance thereby allowing me to redo the GFE to include the extension fee as part of the origination fee?
If for some reason the loan can't close by the expiration date would the bank asking for an extension of the rate lock be considered a changed circumstance thereby allowing me to redo the GFE to include the extension fee as part of the origination fee?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 01/08/10 03:32 PM
I asked this question... per Judy:
Hello Jay,
Thank you for contacting the Office of RESPA. Please refer to our revised FAQ’s (11/19/09) below:
Q: If the availability of the interest rate (shown in item 1 of “Important dates” on page 1 of the GFE) expires, does a revised GFE have to be issued if the borrower locks a different interest rate before the expiration of the estimate for the settlement charges (shown in item 2 of “Important dates”)?
A: If the interest rate offer on the GFE expires and the borrower later locks the interest rate, before the expiration of the estimate for the settlement charges, a revised GFE must be issued if any interest rate dependent charges and terms change. If a revised GFE is issued only the following changes may be made: (1) “Charge or credit (points) for interest rate chosen”; (2) “Adjusted origination charges”; (3) “Daily interest charges”; and (4) other interest rate related loan terms. “Our origination charge” and all other charges must remain the same from the prior GFE. FAQ, 11/24/09, p 10
Hello Jay,
Thank you for contacting the Office of RESPA. Please refer to our revised FAQ’s (11/19/09) below:
Q: If the availability of the interest rate (shown in item 1 of “Important dates” on page 1 of the GFE) expires, does a revised GFE have to be issued if the borrower locks a different interest rate before the expiration of the estimate for the settlement charges (shown in item 2 of “Important dates”)?
A: If the interest rate offer on the GFE expires and the borrower later locks the interest rate, before the expiration of the estimate for the settlement charges, a revised GFE must be issued if any interest rate dependent charges and terms change. If a revised GFE is issued only the following changes may be made: (1) “Charge or credit (points) for interest rate chosen”; (2) “Adjusted origination charges”; (3) “Daily interest charges”; and (4) other interest rate related loan terms. “Our origination charge” and all other charges must remain the same from the prior GFE. FAQ, 11/24/09, p 10
Posted By: biz
Re: RESPA changes 1-1-10 - 01/08/10 03:33 PM
Couldn't find this one either-On a construction loan, the survey/mortgage report fee is collected at closing so a mortgage report showing placement of the building can be obtained after footings are set and before construction draws are made. This fee is finance charge. Would you confirm where this fee will be placed. Thanks.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 01/08/10 03:34 PM
Originally Posted By: Princess Warrior
I see the information booklet was released. Has the notice been published in the Federal Register?
It was published in the 1/5/10 issue. http://edocket.access.gpo.gov/2010/pdf/E9-31304.pdf
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/08/10 03:48 PM
Originally Posted By: Haagen
I asked this question... per Judy:
Hello Jay,
Hello Jay,
Thanks for pointing out the FAQ for me.
And can I just say, after this first week of new RESPA which even ABA has determined to be THE Compliance Issue of 2010, TGIF!
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 01/08/10 03:50 PM
yeah, Judy and I not so much... she still hasn;t responded to me yet on here differing opinions I sent off 8 emails to HUD yesterday... patiently awaiting their replys.
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 01/08/10 04:07 PM
Newbie question: what exactly is the significance of the notice of the new settlement booklets being published in the Federal Register? I ask because i called HUD about a month ago and ordered the new booklets and still haven't received them.
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 01/08/10 05:44 PM
Biz, 80's Girl: Today, one of our vendors forwarded us a response one of their other clients received from HUD - our vendor is changing their system based upon this response the other client received. Our bank has not yet received a response from HUD to our question.
The other lender heard back from David L. Friend, Esq. at HUD that you calculate the payments in that "Summary of Your Loan" section based upon the amortized balanced.
The other lender heard back from David L. Friend, Esq. at HUD that you calculate the payments in that "Summary of Your Loan" section based upon the amortized balanced.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/08/10 06:05 PM
Originally Posted By: biz
Couldn't find this one either-On a construction loan, the survey/mortgage report fee is collected at closing so a mortgage report showing placement of the building can be obtained after footings are set and before construction draws are made. This fee is finance charge. Would you confirm where this fee will be placed. Thanks.
You are requiring it...can the borrower shop or not?
I'm not sure, however, that this would be a FC. Surveys, in general, are not.
Posted By: Moman
Re: RESPA changes 1-1-10 - 01/08/10 09:33 PM
It's already starting - a former loan customer came in with a completed loan application yesterday, including verification of income and bank statements, asked what the rates were and said go for it; all of which was before our Loan Officer had an opportunity to issue the GFE. The applicant selected the title company, not our Prefered vendor, left the financial info and said send her the GFE. GRRR - not to the LO, but to HUD, duh! I told the LO to document in the file that we did not request them, and get the GFE out immediately. GFE could not be prepped because we had to call vendors for their quote on recording costs (paid to the title companies in our state). The LO was able to persuade the customer not to write the check, luckily! Life is not always going to happen the way HUD dictates? Should we have done anything differently?
Posted By: Book Nerd
Re: RESPA changes 1-1-10 - 01/08/10 09:47 PM
Can someone answer this question for me? If a customer applies for a mortgage and we give them the GFE, but the customer doesn't come back, is this considered a withdrawn loan or not?
I've being told that it's not technically an application because we don't have the intent to proceed, but I'm not comfortable with that decision since we have a signed application.
Any thoughts?
I've being told that it's not technically an application because we don't have the intent to proceed, but I'm not comfortable with that decision since we have a signed application.
Any thoughts?
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 01/08/10 10:11 PM
Laffy Taffy, see rlcarey's post in this other thread .
Posted By: Book Nerd
Re: RESPA changes 1-1-10 - 01/08/10 10:31 PM
Thanks!! I had missed that thread entirely!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/08/10 10:42 PM
Originally Posted By: MoMan
It's already starting - a former loan customer came in with a completed loan application yesterday, including verification of income and bank statements, asked what the rates were and said go for it; all of which was before our Loan Officer had an opportunity to issue the GFE. The applicant selected the title company, not our Prefered vendor, left the financial info and said send her the GFE. GRRR - not to the LO, but to HUD, duh! I told the LO to document in the file that we did not request them, and get the GFE out immediately. GFE could not be prepped because we had to call vendors for their quote on recording costs (paid to the title companies in our state). The LO was able to persuade the customer not to write the check, luckily! Life is not always going to happen the way HUD dictates? Should we have done anything differently?
If they bring you verification documents, you can accept them. You didn't request them. I don't think you did anything wrong. I wouldn't do anything differently.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 01/09/10 03:57 PM
I agree with David, you just can't predicate issuing the GFE on receiving verification documents.
Posted By: dsaj
Re: RESPA changes 1-1-10 - 01/09/10 04:36 PM
If they bring you verification documents, you can accept them. You didn't request them. I don't think you did anything wrong. I wouldn't do anything differently.[/quote]
I'm struggling with this answer, maybe just because I know how our lenders think. We've trained our lenders they cannot accept any verifications until disclosure, even when customers offer them. Without an across-the-board no verifications until disclosure rule, what stops a lender from quietly requesting them while indicating 'the customer offered them'? Doesn't this acceptance defeat the purpose of the initial regulatory guideline?
I'm struggling with this answer, maybe just because I know how our lenders think. We've trained our lenders they cannot accept any verifications until disclosure, even when customers offer them. Without an across-the-board no verifications until disclosure rule, what stops a lender from quietly requesting them while indicating 'the customer offered them'? Doesn't this acceptance defeat the purpose of the initial regulatory guideline?
Posted By: biz
Re: RESPA changes 1-1-10 - 01/11/10 02:06 PM
RR-No they can not shop for it.
I thought that if a survey/mortgage report is completed after closing (to determine the placement of the new construction on the property description) that it was always a finance charge.
I thought that if a survey/mortgage report is completed after closing (to determine the placement of the new construction on the property description) that it was always a finance charge.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/11/10 03:06 PM
Originally Posted By: David Dickinson
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.
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.
Quote:
Charges that the seller pays as a matter of common practice and experience are not disclosed on the GFE.
The specific question put to me was for a purchase loan in MN. The title company says "...the title search, exam, assessment search and deed tax are seller expenses. These would not be on the GFE as buyer's expenses." They quote a statute for the deed tax but what about the rest? Are they correct?
Posted By: SCAgLawyer
Re: RESPA changes 1-1-10 - 01/11/10 03:57 PM
Strange question but wanted to see if anyone else has hit this...What do you do on the GFE if you have some payment frequency other than monthly - for example a quarterly or even annual pay home loan (rare but is common for farmers)? Would you divide the payment in order to get a monthly split or simply modify the GFE (which HUD doesn't seem to want you to do) in order to reflect the correct payment frequency?
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 01/11/10 04:01 PM
HUD says you must put those payments into monthly terms so that applicants are comparing apples to apples when shopping. See Q 6 on page 3 of the FAQ:
Quote:
6) Q: The term “monthly” is used throughout the GFE and HUD-1 forms. The requirements stated in terms of “monthly” do not work well for loans on which payments are not made monthly (e.g., are made biweekly or quarterly). In such transactions, can an appropriate payment period be substituted whenever requirements on the forms are stated in terms of “monthly”?
A: No, the GFE and HUD-1 are prescribed forms. The instructions for the GFE provide that the standardized form is the required form. HUD's regulations provide that language and terms used on the HUD-1 may not be changed, except in limited circumstances which do not include changes to the standardized language (see 24 CFR § 3500.9). The intent of the standardized GFE and HUD-1 is to provide borrowers an easier means of comparing loan offers, and to determine that they are getting the loan at settlement that they were offered in the GFE. For loans with payment plans that are not monthly, the periodic payments should be converted to a monthly basis (e.g., payments for a biweekly plan with 26 payments per year would be multiplied by 26/12, quarterly payments would be divided by 3, etc.).
A: No, the GFE and HUD-1 are prescribed forms. The instructions for the GFE provide that the standardized form is the required form. HUD's regulations provide that language and terms used on the HUD-1 may not be changed, except in limited circumstances which do not include changes to the standardized language (see 24 CFR § 3500.9). The intent of the standardized GFE and HUD-1 is to provide borrowers an easier means of comparing loan offers, and to determine that they are getting the loan at settlement that they were offered in the GFE. For loans with payment plans that are not monthly, the periodic payments should be converted to a monthly basis (e.g., payments for a biweekly plan with 26 payments per year would be multiplied by 26/12, quarterly payments would be divided by 3, etc.).
Posted By: Compliance Chick
Re: RESPA changes 1-1-10 - 01/11/10 04:03 PM
Yeild Spread Premuim question.
HELP!! My mortage company is the broker with one of our investors. We issue the GFE, the loan closes in our name, the investor funds the loan. At the time of the initial GFE, we do NOT know what the YSP will be or the cost to the customer. We do not know that until the rate is locked. The maximum the YSP can be is 3%. Because we are the borker the YSP must be shown on box 1 of the GFE. I do not know what to put in box 1 for the initial GFE, before we lock the rate. Do I ..
1)Reflect a 3% YSP in box 1 with no adjustments in box 2, then when the rate is locked and we know the actual YSP, adjust the YSP in box 2 down to the actual amount? (This is using the arguement that the YSP is actually a rate-dependant item and can change upon the locking of a rate)
2) Reflect a 3% YSP in box 1 with no adjustments in box 2, then when the interest rate locks put the appropriate credit in box 2 so that the adjusted origination charge reflects what the customer will actually be paying? (This is assuming that the number in box 1 cannot change due to locking rates)
3) none of the above and please let m eknow what to do!
Also, if it is easier to IM me, please do!
HELP!! My mortage company is the broker with one of our investors. We issue the GFE, the loan closes in our name, the investor funds the loan. At the time of the initial GFE, we do NOT know what the YSP will be or the cost to the customer. We do not know that until the rate is locked. The maximum the YSP can be is 3%. Because we are the borker the YSP must be shown on box 1 of the GFE. I do not know what to put in box 1 for the initial GFE, before we lock the rate. Do I ..
1)Reflect a 3% YSP in box 1 with no adjustments in box 2, then when the rate is locked and we know the actual YSP, adjust the YSP in box 2 down to the actual amount? (This is using the arguement that the YSP is actually a rate-dependant item and can change upon the locking of a rate)
2) Reflect a 3% YSP in box 1 with no adjustments in box 2, then when the interest rate locks put the appropriate credit in box 2 so that the adjusted origination charge reflects what the customer will actually be paying? (This is assuming that the number in box 1 cannot change due to locking rates)
3) none of the above and please let m eknow what to do!
Also, if it is easier to IM me, please do!
Posted By: BNKO
Re: RESPA changes 1-1-10 - 01/11/10 04:10 PM
Question: Borrower came in a few months ago and was credit approved only (prequal)and a GFE was provided. Now the borrower has found a property address. Are we bound to the old GFE and those fees that were diclosed a few months ago, or can we disclose a new GFE with new fees/terms based on the fact that we now have an "application" as defined by RESPA's new rule?
Posted By: SCAgLawyer
Re: RESPA changes 1-1-10 - 01/11/10 04:37 PM
Perfect - I thought I had read those carefully but missed that point. Will be confusing for the borrower but that appears to be okay with HUD... Thanks for the quick assistance!
Posted By: Noogabanker
Re: RESPA changes 1-1-10 - 01/11/10 05:06 PM
Originally Posted By: Princess Rooney
Originally Posted By: mgail
New Question-(I think)
What if you have a customer come in and apply for $50,000.00 and we mail the early disclosures based on that loan amount and fees based on that. Then a week later the underwriter decides that he/she will only lend the borrower $25,000.00 because of a low beacon score or slow pays on credit. I don't think this is a "changed circumstance" so what do you do? Do we have no choice but to give the customer the $50,000 with the terms listed on the GFE or can we hope that the customer doesn't express intent to continue, wait 10 business days until the GFE expires and then issue a new one?
I've search the FAQ on the HUD site and the threads but didn't see anything, it seems like this is a bit of a pickle. Any guidance is appreciated.
Thanks!
What if you have a customer come in and apply for $50,000.00 and we mail the early disclosures based on that loan amount and fees based on that. Then a week later the underwriter decides that he/she will only lend the borrower $25,000.00 because of a low beacon score or slow pays on credit. I don't think this is a "changed circumstance" so what do you do? Do we have no choice but to give the customer the $50,000 with the terms listed on the GFE or can we hope that the customer doesn't express intent to continue, wait 10 business days until the GFE expires and then issue a new one?
I've search the FAQ on the HUD site and the threads but didn't see anything, it seems like this is a bit of a pickle. Any guidance is appreciated.
Thanks!
Why woudn't this be a "Changed Circumstance?" The first FAQ on Changed Circumstances states:
1) Q: Once a GFE is issued are there any circumstances under which the loan terms or charges can change?
A: Yes. The loan terms or charges can change in the event that there are changed circumstances. ―Changed circumstances‖ is now defined in § 3500.2 as: (1) Acts of God, war, disaster, or other emergency; (2) Information particular to the borrower or transaction that was relied on in providing the GFE and that changes or is found to be inaccurate after the GFE has been provided, which information may include information about the credit quality of the borrower, the amount of the loan, the estimated value of the property, or any other information that was used in providing the GFE; (3) New information particular to the borrower or transaction that was not relied on in providing the GFE; or (4) Other circumstances that are particular to the borrower or transaction, including boundary disputes, the need for flood insurance, or environmental problems.
Since the amount of the loan changing was not based on the borrower decreasing their request but instead based on not being approved for that amount we are assuming this does not count as a changed circumstance.
Posted By: Compliance Chick
Re: RESPA changes 1-1-10 - 01/11/10 05:31 PM
Originally Posted By: mgail
Originally Posted By: Princess Rooney
Originally Posted By: mgail
New Question-(I think)
What if you have a customer come in and apply for $50,000.00 and we mail the early disclosures based on that loan amount and fees based on that. Then a week later the underwriter decides that he/she will only lend the borrower $25,000.00 because of a low beacon score or slow pays on credit. I don't think this is a "changed circumstance" so what do you do? Do we have no choice but to give the customer the $50,000 with the terms listed on the GFE or can we hope that the customer doesn't express intent to continue, wait 10 business days until the GFE expires and then issue a new one?
I've search the FAQ on the HUD site and the threads but didn't see anything, it seems like this is a bit of a pickle. Any guidance is appreciated.
Thanks!
What if you have a customer come in and apply for $50,000.00 and we mail the early disclosures based on that loan amount and fees based on that. Then a week later the underwriter decides that he/she will only lend the borrower $25,000.00 because of a low beacon score or slow pays on credit. I don't think this is a "changed circumstance" so what do you do? Do we have no choice but to give the customer the $50,000 with the terms listed on the GFE or can we hope that the customer doesn't express intent to continue, wait 10 business days until the GFE expires and then issue a new one?
I've search the FAQ on the HUD site and the threads but didn't see anything, it seems like this is a bit of a pickle. Any guidance is appreciated.
Thanks!
Why woudn't this be a "Changed Circumstance?" The first FAQ on Changed Circumstances states:
1) Q: Once a GFE is issued are there any circumstances under which the loan terms or charges can change?
A: Yes. The loan terms or charges can change in the event that there are changed circumstances. ―Changed circumstances‖ is now defined in § 3500.2 as: (1) Acts of God, war, disaster, or other emergency; (2) Information particular to the borrower or transaction that was relied on in providing the GFE and that changes or is found to be inaccurate after the GFE has been provided, which information may include information about the credit quality of the borrower, the amount of the loan, the estimated value of the property, or any other information that was used in providing the GFE; (3) New information particular to the borrower or transaction that was not relied on in providing the GFE; or (4) Other circumstances that are particular to the borrower or transaction, including boundary disputes, the need for flood insurance, or environmental problems.
Since the amount of the loan changing was not based on the borrower decreasing their request but instead based on not being approved for that amount we are assuming this does not count as a changed circumstance.
I do beleive it is a changed circumstance:
(ii) (ii) Information particular to the borrower or transaction that was relied on in providing the GFE and that changes or is found to be inaccurate after the GFE has been provided. This may include information about the credit quality of the borrower, the amount of the loan, the estimated value of the property, or any other information that was used in providing the GFE;
Note the credit quality portion of this statement!
Posted By: Noogabanker
Re: RESPA changes 1-1-10 - 01/11/10 06:57 PM
Since the credit quality of the customer was the same when we issued the GFE as it was when we decided to decline them I don't think it "changed" so therefore can't be considered a changed circumstance and I certainly don't want to argue this point with an auditor so I think I am sticking with this answer provided by David D. last week..
Two options:
1. Deny them for the $50M and ask them if they want to reapply for $25M. If they do, issue a GFE representing the new loan amount.
2. Counteroffer them with $25M. If they accept the counteroffer, issue a new GFE representing the new loan amount.
___________________
Two options:
1. Deny them for the $50M and ask them if they want to reapply for $25M. If they do, issue a GFE representing the new loan amount.
2. Counteroffer them with $25M. If they accept the counteroffer, issue a new GFE representing the new loan amount.
___________________
Posted By: TryN2Comply
Re: RESPA changes 1-1-10 - 01/11/10 07:36 PM
If the homeowner's insurance premiums are paid prior to settlement:
1) Is the premium still shown on Line 903 of the HUD?
2) If the premium is shown on the HUD, does the premium need to be shown as POC outside the column?
The HUD-1 Instructions says to list any homeowner's insurance premiums that the lender requires to be paid at the time of settlementon on Line 903. The RESPA FAQs and HUD-1 Instructions do not address where and how to post homeowner's insurance paid outside of closing (aka: prior to settlement).
1) Is the premium still shown on Line 903 of the HUD?
2) If the premium is shown on the HUD, does the premium need to be shown as POC outside the column?
The HUD-1 Instructions says to list any homeowner's insurance premiums that the lender requires to be paid at the time of settlementon on Line 903. The RESPA FAQs and HUD-1 Instructions do not address where and how to post homeowner's insurance paid outside of closing (aka: prior to settlement).
Posted By: TB 12
Re: RESPA changes 1-1-10 - 01/11/10 07:57 PM
On purchases, we require one year paid insurance policy at closing-if the borrower pays it prior to closing and brings a paid reciept to the table, it would be a POC on 903. If they are paying it at closing, it would be a charge to the borrower on 903.
Posted By: Jan94
Re: RESPA changes 1-1-10 - 01/11/10 08:00 PM
David - in your webinar "How to Complete the NEW Good Faith Estimate and Settlement Statments" Q&A you had the following question & response:
Question 50. If we don't charge our customer for the credit report fee, must we list that and then show it as a credit on the HUD? Do we have to list this on the GFE?
Answer: If the lender knows, at the time the GFE is provided, that it will waive the credit report fee, the fee must still be disclosed on the GFE (in Block 3) and HUD Settlement Statement (on Line 805). An offsetting credit (for the credit report fee) will also be shown on the GFE (in Block 2) and the HUD Settlement Statement (on Line 802).
If the lender decides to waive the credit report fee after the GFE is issued, it would already be disclosed on the GFE (in Block 3) and still needs to be listed on the HUD Settlement Statement (on Line 805). There will be no offsetting credti on the GFE in Block 2; however, the HUD Settlement Statement will shown an offseting credit in the 200 series."
Where does the reference to before or after the GFE is issued come from? We have never charged the credit bureau fee; it's always been included in our admin fee. I've been told we need to show it in Block 3 of the GFE but disclose it on Line 805 on the HUD and show the offsetting credit in the 200 series. But your response indicates we would only do that if it was decided to waive it "after the GFE is issued". I'm confused. This could be the only fee we would have like this (i.e. it's not a "no cost" loan). Would appreciate your help in understanding your response. Thank you!
Question 50. If we don't charge our customer for the credit report fee, must we list that and then show it as a credit on the HUD? Do we have to list this on the GFE?
Answer: If the lender knows, at the time the GFE is provided, that it will waive the credit report fee, the fee must still be disclosed on the GFE (in Block 3) and HUD Settlement Statement (on Line 805). An offsetting credit (for the credit report fee) will also be shown on the GFE (in Block 2) and the HUD Settlement Statement (on Line 802).
If the lender decides to waive the credit report fee after the GFE is issued, it would already be disclosed on the GFE (in Block 3) and still needs to be listed on the HUD Settlement Statement (on Line 805). There will be no offsetting credti on the GFE in Block 2; however, the HUD Settlement Statement will shown an offseting credit in the 200 series."
Where does the reference to before or after the GFE is issued come from? We have never charged the credit bureau fee; it's always been included in our admin fee. I've been told we need to show it in Block 3 of the GFE but disclose it on Line 805 on the HUD and show the offsetting credit in the 200 series. But your response indicates we would only do that if it was decided to waive it "after the GFE is issued". I'm confused. This could be the only fee we would have like this (i.e. it's not a "no cost" loan). Would appreciate your help in understanding your response. Thank you!
Posted By: biz
Re: RESPA changes 1-1-10 - 01/11/10 08:40 PM
If-hopefully a big if, a bank has to refund part of a Block 1 fee (charged for origination but not paid directly to the Bank) after closing to make the HUD correct, are you just expensing that or would you adjust deferred fees. For example, lets say your loan fees are typically $500 but you had to reimburse for an origination fee paid to a third party of $100. Would you adjust the deferred fees-and base them on $400 now?
I apologize if this is just too stupid a question-FASB-is not my thing.
Thanks
I apologize if this is just too stupid a question-FASB-is not my thing.
Thanks
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/11/10 08:59 PM
Biz, it would make sense that you would adjust deferred fees because the new amount will be the "correct" amount.
Posted By: Many Hats
Re: RESPA changes 1-1-10 - 01/11/10 08:59 PM
We are doing a HELOAN...the borrower pays for property taxes and homeowners insurance outside of closing. In the past, we would list them on the GFE and HUD as POC.
I think I know where to put the HOI premium (Box 11, then we have to give a credit for it in Box 2 because BYTE software does not allow a POC in box 11).
Where do we reflect the property taxes on the new GFE?
I think I know where to put the HOI premium (Box 11, then we have to give a credit for it in Box 2 because BYTE software does not allow a POC in box 11).
Where do we reflect the property taxes on the new GFE?
Posted By: rosales
Re: RESPA changes 1-1-10 - 01/11/10 09:08 PM
The FAQ's indicate that if the loan originator gives a GFE then the loan originator is presumed to have received all 6 pieces of information for an application according to RESPA, noted in Question 23 under GFE-General. Also, FAQ, Question 8ii under Changed Circumstance indicates that if a GFE is issued without a property address the subsequent identification of a property address is not a changed circumstance. I would think that unless something else changed like the loan amount or interest rate you would not be able to issue a new GFE.
I have been struggling with the pre-approval also when you don't have a property address. I was wondering if you should not issue the GFE until you have a property? Does anyone have any insight on this? The only negative I can see is if you have to deny the pre-approval. It then becomes HMDA reportable and you would need an application date. Any thoughts would be appreciated.
I have been struggling with the pre-approval also when you don't have a property address. I was wondering if you should not issue the GFE until you have a property? Does anyone have any insight on this? The only negative I can see is if you have to deny the pre-approval. It then becomes HMDA reportable and you would need an application date. Any thoughts would be appreciated.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 01/11/10 09:12 PM
From HUD:
Originally Posted By: Judy at HUD
Hello Jay,
I am sorry for the confusion. As you mentioned, we are constantly looking at many scenarios for every situation and occasionally answers will change. This question has been asked over and over and the final answer as of January 7,2010, is that the borrower requested change to waive escrows is a changed circumstance. As such, Block 1 still CANNOT be changed, but the adjustment can be made in Block 2, to whichever box is checked, 2 or 3. I hope this clarifies this issue.
Judy Griffin
I am sorry for the confusion. As you mentioned, we are constantly looking at many scenarios for every situation and occasionally answers will change. This question has been asked over and over and the final answer as of January 7,2010, is that the borrower requested change to waive escrows is a changed circumstance. As such, Block 1 still CANNOT be changed, but the adjustment can be made in Block 2, to whichever box is checked, 2 or 3. I hope this clarifies this issue.
Judy Griffin
Posted By: Oursisnottoreasonwhy
Re: RESPA changes 1-1-10 - 01/11/10 09:13 PM
Property taxes are only on the New GFE if escrowing.
Posted By: Many Hats
Re: RESPA changes 1-1-10 - 01/11/10 09:39 PM
Originally Posted By: Oursisnottoreasonwhy
Property taxes are only on the New GFE if escrowing.
Okay...another question....since this is bank paid closing costs, we are paying the recording fees and the doc stamps and intangible taxes. When I try to do this in BYTE, it says that POC recording fees and POC transfer taxes (which is where we list doc stamps and intangible taxes) are not supported on te HUD1.
Do I list them as charges, then give a credit for them in Box 2?
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 01/11/10 09:43 PM
The escrow waiver fee doesn't go into Block 1? I don't understand how it goes in Block 2.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 01/11/10 09:48 PM
I agree with you raitchjay...
Posted By: Oursisnottoreasonwhy
Re: RESPA changes 1-1-10 - 01/11/10 09:55 PM
Originally Posted By: Many Hats
Originally Posted By: Oursisnottoreasonwhy
Property taxes are only on the New GFE if escrowing.
Okay...another question....since this is bank paid closing costs, we are paying the recording fees and the doc stamps and intangible taxes. When I try to do this in BYTE, it says that POC recording fees and POC transfer taxes (which is where we list doc stamps and intangible taxes) are not supported on te HUD1.
Do I list them as charges, then give a credit for them in Box 2?
Yes. It is handled the same as items for no cost loans where you show the costs and then show the credit in Block 2 for the fees the bank is not charging the customer for.
Posted By: ImGoinNuts
Re: RESPA changes 1-1-10 - 01/11/10 10:57 PM
Originally Posted By: Many Hats
We are doing a HELOAN...the borrower pays for property taxes and homeowners insurance outside of closing. In the past, we would list them on the GFE and HUD as POC.
I think I know where to put the HOI premium (Box 11, then we have to give a credit for it in Box 2 because BYTE software does not allow a POC in box 11).
Where do we reflect the property taxes on the new GFE?
I think I know where to put the HOI premium (Box 11, then we have to give a credit for it in Box 2 because BYTE software does not allow a POC in box 11).
Where do we reflect the property taxes on the new GFE?
If the borrower pays for the HOI - how are you able to list it as a credit in Box 2? I hadn't heard of this. If you are requiring them to have HOI - it needs to be disclosed on the GFE. Are other people handling this with a credit in Block 2? Again - I hadn't heard of that.
Posted By: ImGoinNuts
Re: RESPA changes 1-1-10 - 01/11/10 11:02 PM
Originally Posted By: Truffle Royale
Originally Posted By: David Dickinson
Originally Posted By: HallieK
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.
Quote:
Charges that the seller pays as a matter of common practice and experience are not disclosed on the GFE.
The specific question put to me was for a purchase loan in MN. The title company says "...the title search, exam, assessment search and deed tax are seller expenses. These would not be on the GFE as buyer's expenses." They quote a statute for the deed tax but what about the rest? Are they correct?
My contact at HUD told me that if the seller "typically pays" the fees in the market in question, then no - they are not on the GFE. We have various states we are working with, and we are only disclosing the fees that are "typically" paid by the borrower.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/12/10 02:08 AM
Always, did HUD tell you whether that changes for purchases vs refis? If the borrower would typically pay the charges on a refi but on a purchase the seller does, would they show on the refi GFE but not on the purchase GFE? I think this is throwing me because of the owner's title HAVING to be on the borrower's side, period.
Just when I think I have this down........
Just when I think I have this down........
Posted By: waldensouth
Re: RESPA changes 1-1-10 - 01/12/10 01:26 PM
This may have been answered several hundred pages back, but - How are you going to treat applications where GFEs were issued but not accepted on HMDA? If we deny them up front without issuing a GFE, then its reported as a denial.(I think) If the loan is originated, then of course it's reported as an originated loan or if it's denied based on a changed circumstance.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 01/12/10 01:35 PM
Depending on the circumstances with each, either withdrawn or incomplete.
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 01/12/10 01:48 PM
I think I have a new issue. We are testing ARMs on our LOS and we have come up with a question.
For TILA purposes, the APR and payment stream are based on the current index - it is assumed that it will not change over the life of the loan.
On the new GFE, with regards to "even if you make your payments on time, can your monthly amount...rise? (Page 1). Our LOS is displaying the "TILA" first payment amount. My question is, should it be the payment as if the interest rate had hit the initial cap?
In english, assuming a one year arm with an initial rate of 4.875%, and a cmt of 0.47 - should my payment amount be based on 3% (the first adjustment rate assuming a static cmt) or 6.875% assuming I hit the initial 2% cap?
Thanks
For TILA purposes, the APR and payment stream are based on the current index - it is assumed that it will not change over the life of the loan.
On the new GFE, with regards to "even if you make your payments on time, can your monthly amount...rise? (Page 1). Our LOS is displaying the "TILA" first payment amount. My question is, should it be the payment as if the interest rate had hit the initial cap?
In english, assuming a one year arm with an initial rate of 4.875%, and a cmt of 0.47 - should my payment amount be based on 3% (the first adjustment rate assuming a static cmt) or 6.875% assuming I hit the initial 2% cap?
Thanks
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/12/10 02:47 PM
Quote:
My contact at HUD told me that if the seller "typically pays" the fees in the market in question, then no - they are not on the GFE. We have various states we are working with, and we are only disclosing the fees that are "typically" paid by the borrower.
Originally Posted By: Truffle Royale
Always, did HUD tell you whether that changes for purchases vs refis? If the borrower would typically pay the charges on a refi but on a purchase the seller does, would they show on the refi GFE but not on the purchase GFE? I think this is throwing me because of the owner's title HAVING to be on the borrower's side, period.
Just when I think I have this down........
Just when I think I have this down........
We are going with "typical" on everything but transfer taxes if not state-specifically required by seller, and of course, owner's title insurance on purchases.
If the loan is a refi, any applicable fees would have to be paid by the borrower, because there isn't a seller. Therefore, "typical" wouldn't enter the picture.
Posted By: Carter's Mom
Re: RESPA changes 1-1-10 - 01/12/10 02:52 PM
I know that HOA dues have been discussed but I can't locate it in this thread.
Where should we disclose the HOA dues on the GFE?
Also, in some states there are a HOA transfer fee. Any ideas on where to disclose that?
Where should we disclose the HOA dues on the GFE?
Also, in some states there are a HOA transfer fee. Any ideas on where to disclose that?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/12/10 03:03 PM
Originally Posted By: Carter's Mom
I know that HOA dues have been discussed but I can't locate it in this thread.
Where should we disclose the HOA dues on the GFE?
Also, in some states there are a HOA transfer fee. Any ideas on where to disclose that?
Where should we disclose the HOA dues on the GFE?
Also, in some states there are a HOA transfer fee. Any ideas on where to disclose that?
Try here
Posted By: biz
Re: RESPA changes 1-1-10 - 01/12/10 04:15 PM
I searched "lock" and recieved no responses so sorry if these have been asked already.
#1) Applicant comes in-fills out application, we verbally go over what closing costs are going to be, we explain the lock-in fee-which is optional for the applicant. Applicant decides s/he wants to submit application, accepts the fees we have verbally provided and expresses an intent to proceed based on what we've verbally expressed. We issue a GFE, which is hand delivered to the customer at that time. The question: Does there need to be an initial GFE that does not disclose the lock-in fee and then one with the lock fee, to prove we issued one without charging the fee before providing the initial GFE?
#2) Can we choose to disclose only our affiliate as the only title company on the provider list if we do not have the affiliated business arrangement signed at the time the GFE is issued. The thought process being . . .if the customer has not signed the AfBA when the GFE is issued, can we still claim that we reasonablly expected to use the them for the closing?
Thank you.
#1) Applicant comes in-fills out application, we verbally go over what closing costs are going to be, we explain the lock-in fee-which is optional for the applicant. Applicant decides s/he wants to submit application, accepts the fees we have verbally provided and expresses an intent to proceed based on what we've verbally expressed. We issue a GFE, which is hand delivered to the customer at that time. The question: Does there need to be an initial GFE that does not disclose the lock-in fee and then one with the lock fee, to prove we issued one without charging the fee before providing the initial GFE?
#2) Can we choose to disclose only our affiliate as the only title company on the provider list if we do not have the affiliated business arrangement signed at the time the GFE is issued. The thought process being . . .if the customer has not signed the AfBA when the GFE is issued, can we still claim that we reasonablly expected to use the them for the closing?
Thank you.
Posted By: TOLIE
Re: RESPA changes 1-1-10 - 01/12/10 04:32 PM
This question has been asked multiple times at trainings, sent to HUD, the FRB and no one is in agreement.
Our vendor has told us, they cannot calculate this if it is not based on the TIL payment stream.
Our vendor has told us, they cannot calculate this if it is not based on the TIL payment stream.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/12/10 04:41 PM
biz:
1)As long as you don't collect any fees prior to handing the GFE to the borrower and getting them to express their intent to proceed, there's no reason you can't include the lock in fee on the ONLY GFE you give them. The GFE is the worst case scenario for the borrower of the costs they're going to have to pay to get the loan therefore, the lock fee should be included.
2) As I understand it, you can put just your affiliate on the provider list as long as you give the aba to the borrower too.
1)As long as you don't collect any fees prior to handing the GFE to the borrower and getting them to express their intent to proceed, there's no reason you can't include the lock in fee on the ONLY GFE you give them. The GFE is the worst case scenario for the borrower of the costs they're going to have to pay to get the loan therefore, the lock fee should be included.
2) As I understand it, you can put just your affiliate on the provider list as long as you give the aba to the borrower too.
Posted By: TOLIE
Re: RESPA changes 1-1-10 - 01/12/10 04:45 PM
Sorry in response to respa queen and the ARM situation.
Posted By: biz
Re: RESPA changes 1-1-10 - 01/12/10 08:33 PM
Thanks Royale-another related question.
If we have included the lock fee in our charges/disclosure, because they had expressed an interest in paying one today when they were in, but won't pay it until payday, so the original GFE is sent out with stating the rate is only good through today, would it be necessary to reissue the GFE and change date #1 to for example-30 days down the road.
Meaning-if the only thing that is changing is the lock date (ID#1) would a reissue be necessary? The date originally disclosed would be the worse case scenerio.
If we have included the lock fee in our charges/disclosure, because they had expressed an interest in paying one today when they were in, but won't pay it until payday, so the original GFE is sent out with stating the rate is only good through today, would it be necessary to reissue the GFE and change date #1 to for example-30 days down the road.
Meaning-if the only thing that is changing is the lock date (ID#1) would a reissue be necessary? The date originally disclosed would be the worse case scenerio.
Posted By: Carolina Blue
Re: RESPA changes 1-1-10 - 01/12/10 08:35 PM
I haven't had much luck with the search recently, so at the risk of getting lost in the shuffle... Our loan system kept the old GFE and has renamed it "Initial Fees Worksheet." The Loan Manager wants to continue to give this form to the borrower since it will give them a true idea of the closing costs and monthly payment. I've tried getting the Manager to use a separate form with the same info., but then they have to upload the form into the system and do some programming to create new entry fields. I'm thinking giving out the renamed old GFE is asking for trouble, but can't find anything that specifically prevents it. Any thoughts?
Posted By: biz
Re: RESPA changes 1-1-10 - 01/12/10 09:06 PM
CB- If all government reference is removed, if the words GFE are removed, if there is a statement that indicates this is not a GFE, isn't it a now a separate form?
Posted By: Deena
Re: RESPA changes 1-1-10 - 01/12/10 09:46 PM
I have in my notes from HUD's RESPA Plain English that it's ok to issue something with the actual fees, but it can not look like a GFE. I would not use the old GFE (in fact, that may have been the specific question that was asked and she said no).
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/13/10 02:13 PM
I remember that too, or a discussion on it. I would do a spreadsheet-type fee sheet or something of that nature instead.
Posted By: ImGoinNuts
Re: RESPA changes 1-1-10 - 01/13/10 03:30 PM
Originally Posted By: RR joker
Quote:
My contact at HUD told me that if the seller "typically pays" the fees in the market in question, then no - they are not on the GFE. We have various states we are working with, and we are only disclosing the fees that are "typically" paid by the borrower.
Originally Posted By: Truffle Royale
Always, did HUD tell you whether that changes for purchases vs refis? If the borrower would typically pay the charges on a refi but on a purchase the seller does, would they show on the refi GFE but not on the purchase GFE? I think this is throwing me because of the owner's title HAVING to be on the borrower's side, period.
Just when I think I have this down........
Just when I think I have this down........
We are going with "typical" on everything but transfer taxes if not state-specifically required by seller, and of course, owner's title insurance on purchases.
If the loan is a refi, any applicable fees would have to be paid by the borrower, because there isn't a seller. Therefore, "typical" wouldn't enter the picture.
We are doing the same as RR Joker
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 01/13/10 03:36 PM
Any other MORVission users out there? They have set there system to default question 2 in the Important Date section of the GFE to default to NA unless the rate is locked
I am arguing with tem that it needs to be 10 days from completion of GFE per RESPA and the FAQ.
Their argument is that "We" don't want to commit to fees until you know the program and rate the borrower wants. I explained to them the reasons they use for the use of NA are permissible Changed Circumstances under the Reg.
I am arguing with tem that it needs to be 10 days from completion of GFE per RESPA and the FAQ.
Their argument is that "We" don't want to commit to fees until you know the program and rate the borrower wants. I explained to them the reasons they use for the use of NA are permissible Changed Circumstances under the Reg.
Posted By: DoorKey
Re: RESPA changes 1-1-10 - 01/13/10 03:42 PM
On occasion we receive an appraisal that indicates that part of the property is in poor condition. For example, the appraiser indicates that the roof is in poor condition. Typically, we would then request that the applicant have the roof inspected. With the need for the inspection, we would consider this a changed circumstance and issue a revised GFE.
When would the three day clock start for issuance of the revised GFE? At the time that the appraisal was received by the bank (even though it has not yet been reviewed by underwriters) OR when the bank’s underwriters have had an opportunity to review the appraisal? It is the bank’s underwriters that decide if an inspection is to be requested.
My opinion is that is when the underwriters have had a chance to review the appraisal and make a determination that an inspection is needed. Is this correct?
When would the three day clock start for issuance of the revised GFE? At the time that the appraisal was received by the bank (even though it has not yet been reviewed by underwriters) OR when the bank’s underwriters have had an opportunity to review the appraisal? It is the bank’s underwriters that decide if an inspection is to be requested.
My opinion is that is when the underwriters have had a chance to review the appraisal and make a determination that an inspection is needed. Is this correct?
Posted By: Book Nerd
Re: RESPA changes 1-1-10 - 01/13/10 04:01 PM
Originally Posted By: DD Regs
Any other MORVission users out there? They have set there system to default question 2 in the Important Date section of the GFE to default to NA unless the rate is locked
I am arguing with tem that it needs to be 10 days from completion of GFE per RESPA and the FAQ.
Their argument is that "We" don't want to commit to fees until you know the program and rate the borrower wants. I explained to them the reasons they use for the use of NA are permissible Changed Circumstances under the Reg.
I am arguing with tem that it needs to be 10 days from completion of GFE per RESPA and the FAQ.
Their argument is that "We" don't want to commit to fees until you know the program and rate the borrower wants. I explained to them the reasons they use for the use of NA are permissible Changed Circumstances under the Reg.
We have tied this field to the issue date, or re-issue date, of the GFE. It's my understanding that there is a date field that ties to this that you should be able to fill in.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/13/10 04:16 PM
Originally Posted By: DoorKey
On occasion we receive an appraisal that indicates that part of the property is in poor condition. For example, the appraiser indicates that the roof is in poor condition. Typically, we would then request that the applicant have the roof inspected. With the need for the inspection, we would consider this a changed circumstance and issue a revised GFE.
When would the three day clock start for issuance of the revised GFE? At the time that the appraisal was received by the bank (even though it has not yet been reviewed by underwriters) OR when the bank’s underwriters have had an opportunity to review the appraisal? It is the bank’s underwriters that decide if an inspection is to be requested.
My opinion is that is when the underwriters have had a chance to review the appraisal and make a determination that an inspection is needed. Is this correct?
When would the three day clock start for issuance of the revised GFE? At the time that the appraisal was received by the bank (even though it has not yet been reviewed by underwriters) OR when the bank’s underwriters have had an opportunity to review the appraisal? It is the bank’s underwriters that decide if an inspection is to be requested.
My opinion is that is when the underwriters have had a chance to review the appraisal and make a determination that an inspection is needed. Is this correct?
I would agree with this thought process...as soon as you have knowledge of the need...so that's as soon as you are made aware of it.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/13/10 04:18 PM
Originally Posted By: DD Regs
Any other MORVission users out there? They have set there system to default question 2 in the Important Date section of the GFE to default to NA unless the rate is locked
I am arguing with tem that it needs to be 10 days from completion of GFE per RESPA and the FAQ.
Their argument is that "We" don't want to commit to fees until you know the program and rate the borrower wants. I explained to them the reasons they use for the use of NA are permissible Changed Circumstances under the Reg.
I am arguing with tem that it needs to be 10 days from completion of GFE per RESPA and the FAQ.
Their argument is that "We" don't want to commit to fees until you know the program and rate the borrower wants. I explained to them the reasons they use for the use of NA are permissible Changed Circumstances under the Reg.
Boy, they sure are setting up their users for a compliance disaster aren't they!
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/13/10 04:18 PM
FAQ p13 3) under Changed circumstances answers your questions. revised GFE must (be done) within three business days of receiving the information sufficient to establish changed circumstances. imho, that means when you KNOW you're going to need the roof inspection. You don't know that until the appraisal has been reviewed and the underwriter calls for it.
My question: What do you do if the insurance is left off the GFE? I know if the bank misses a fee in block three they have to eat it but do I do revised GFE to show either of these items? I have one so I need the answer asap. Thanks!
My question: What do you do if the insurance is left off the GFE? I know if the bank misses a fee in block three they have to eat it but do I do revised GFE to show either of these items? I have one so I need the answer asap. Thanks!
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/13/10 04:23 PM
Truf, I would issue a revised one.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/13/10 04:32 PM
Revised with just the insurance, right Joker? I'm stuck with the fees being left off, right? I can't even show them on the HUD as PBL because I never disclosed them as fees, correct?
Sorry for the stupid questions. I just want to make sure I correctly fix this first wrong one.
Sorry for the stupid questions. I just want to make sure I correctly fix this first wrong one.
Posted By: biz
Re: RESPA changes 1-1-10 - 01/13/10 05:53 PM
Just bumping this one-
Thanks Royale-another related question.
If we have included the lock fee in our charges/disclosure, because they had expressed an interest in paying one today when they were in, but won't pay it until payday, so the original GFE is sent out with stating the rate is only good through today, would it be necessary to reissue the GFE and change date #1 to for example-30 days down the road.
Meaning-if the only thing that is changing is the lock date (ID#1) would a reissue be necessary? The date originally disclosed would be the worse case scenerio.
Thanks to all/any.
Thanks Royale-another related question.
If we have included the lock fee in our charges/disclosure, because they had expressed an interest in paying one today when they were in, but won't pay it until payday, so the original GFE is sent out with stating the rate is only good through today, would it be necessary to reissue the GFE and change date #1 to for example-30 days down the road.
Meaning-if the only thing that is changing is the lock date (ID#1) would a reissue be necessary? The date originally disclosed would be the worse case scenerio.
Thanks to all/any.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/13/10 05:54 PM
I say no to redisclosure just to change the date, biz.
Any takers on my redisclosure issue? I need help fast!
Any takers on my redisclosure issue? I need help fast!
Posted By: MarieR
Re: RESPA changes 1-1-10 - 01/13/10 07:34 PM
I agree Truff that you would just add the insurance on the GFE.
But I am not sure about the HUD. I would think that you would still show them on the HUD as PBL since they are fees associated with the closing, but I am not confident in my answer.
But I am not sure about the HUD. I would think that you would still show them on the HUD as PBL since they are fees associated with the closing, but I am not confident in my answer.
Posted By: Likes to Comply
Re: RESPA changes 1-1-10 - 01/13/10 08:33 PM
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.
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.
Posted By: MN Banker
Re: RESPA changes 1-1-10 - 01/13/10 08:47 PM
Originally Posted By: Rookie
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.
Are you freakin kidding me?? Since when?? Does anyone else agree with this?
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 01/13/10 08:49 PM
Quote:
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.
HUD Rep's answer-If the charge for the credit report is not charged to the borrower it does not have to be disclosed.
If that's the logic then all fees paid by someone other than the borrower would not have to be disclosed.
You may not charge the borrower direct for the credit report but you are paying the report out of your origination charges so in essence the borrower is paying for the report and Appendix A is very clear that any fee paid to the lender and not retained by the lender then the ultimate receiver of the funds must be disclosed.
I may be the only one but I disagree with this answer 200%.
Posted By: todd cook
Re: RESPA changes 1-1-10 - 01/13/10 08:58 PM
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.
Wow. I thought mortgage prep fee had to be included with our origination charge. Who is your HUD contact?
HUD Rep's answer was it should be disclosed in Block 4.
Wow. I thought mortgage prep fee had to be included with our origination charge. Who is your HUD contact?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 01/13/10 09:10 PM
Todd-If the atty is preparing the docs and charging the fee, why would it be in block 1?
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 01/13/10 09:14 PM
Originally Posted By: MN Banker
Originally Posted By: Rookie
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.
Are you freakin kidding me?? Since when?? Does anyone else agree with this?
I definitely do not agree this is correct. The answer to the first question on page 10 of the 12-30-09 FAQs states: "All charges typically paid by the borrower must be disclosed on the GFE regardless of whether the charges will be paid for by the borrower, the seller, or other party."
Posted By: todd cook
Re: RESPA changes 1-1-10 - 01/13/10 09:17 PM
HUD FAQ #6 on page 23:
Q: Are attorney's fees charged to prepare loan documents for the lender considered part of the charge for origination services disclosed on Block 1 of the GFE?
A: Yes, attorney's fees charged to prepare loan documents for the lender are considered part of the charge for origination services disclosed on Block 1 of the GFE and should not be separately itemized.
Also see FAQ #2 on page 23.
Q: Are attorney's fees charged to prepare loan documents for the lender considered part of the charge for origination services disclosed on Block 1 of the GFE?
A: Yes, attorney's fees charged to prepare loan documents for the lender are considered part of the charge for origination services disclosed on Block 1 of the GFE and should not be separately itemized.
Also see FAQ #2 on page 23.
Posted By: Greenhorn
Re: RESPA changes 1-1-10 - 01/13/10 09:40 PM
If paying points on a FreddieMac loan comes out of the net funding of the loan how is that to be disclosed on the GFE?
Posted By: 4newt
Re: RESPA changes 1-1-10 - 01/13/10 09:50 PM
Here's a good one...... Texas state law says doc prep can only be done by an attorney. Therefore, we can't include that fee in the bank's origination charges as a fee we are charging. We would have to disclose it somewhere else. Any takers?
Posted By: ACloser
Re: RESPA changes 1-1-10 - 01/13/10 10:10 PM
This new RESPA doesn't take the TIL or high cost into consideration at all. It lumps all the attorney charges onto one line. Is that now to be considered an APR fee?
Posted By: todd cook
Re: RESPA changes 1-1-10 - 01/13/10 10:10 PM
My understanding is this fee would yet be included with Block 1 as part of "our origination charge". Again, reference the HUD FAQs. I know nothing of Texas state laws, so I dont know if you are not allowed to include the fee there.
Posted By: JBledsoe
Re: RESPA changes 1-1-10 - 01/13/10 10:12 PM
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
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
Posted By: todd cook
Re: RESPA changes 1-1-10 - 01/13/10 10:12 PM
Originally Posted By: ACloser
This new RESPA doesn't take the TIL or high cost into consideration at all. It lumps all the attorney charges onto one line. Is that now to be considered an APR fee?
No.
Posted By: Princess Romeo
Re: RESPA changes 1-1-10 - 01/13/10 10:12 PM
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.
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.
Posted By: jross
Re: RESPA changes 1-1-10 - 01/13/10 10:26 PM
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?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 01/13/10 10:27 PM
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?
Posted By: parr04
Re: RESPA changes 1-1-10 - 01/13/10 10:41 PM
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?
Posted By: Amos
Re: RESPA changes 1-1-10 - 01/13/10 10:45 PM
Originally Posted By: TooTall
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].
Posted By: pjs
Re: RESPA changes 1-1-10 - 01/14/10 12:45 PM
Originally Posted By: JBledsoe
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
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.
Posted By: MarieR
Re: RESPA changes 1-1-10 - 01/14/10 01:50 PM
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?
Posted By: TB 12
Re: RESPA changes 1-1-10 - 01/14/10 01:55 PM
Originally Posted By: Just Jay
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)
Posted By: TB 12
Re: RESPA changes 1-1-10 - 01/14/10 01:57 PM
Originally Posted By: pjs
Originally Posted By: JBledsoe
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
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.
Posted By: Bullseye
Re: RESPA changes 1-1-10 - 01/14/10 02:56 PM
Originally Posted By: Princess Rooney
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?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/14/10 04:08 PM
Originally Posted By: JBledsoe
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
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.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/14/10 04:15 PM
Originally Posted By: Bullseye
Originally Posted By: Princess Rooney
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.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/14/10 04:17 PM
Originally Posted By: MarieR
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
Posted By: Kahola
Re: RESPA changes 1-1-10 - 01/14/10 04:23 PM
New question: On a purchase transaction when the borrower has already selected the title company as shown on the purchase contract which is signed prior to the bank receiving (sometimes the contract has been signed 30 days in advance)the loan application, must we still provide a written list of providers? I know there has been some discussion on this subject however, it doesn't make sense that we would provide a list when the borrower chose the title company before we even received the application.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/14/10 04:28 PM
I agree with Dan that ALL fees must be disclosed on the GFE - no matter who pays for it. This is consistent with the regulation and FAQs.
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. Several pages back I posted an email I got from HUD about not having to list transfer taxes. Then I got a call from David Friend - a HUD attorney. He indicated he read this post and the answer I got (in an email from HUD) was wrong.
HUD: Are you reading this? You've got to update your FAQs with the issues were posting here!
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. Several pages back I posted an email I got from HUD about not having to list transfer taxes. Then I got a call from David Friend - a HUD attorney. He indicated he read this post and the answer I got (in an email from HUD) was wrong.
HUD: Are you reading this? You've got to update your FAQs with the issues were posting here!
Posted By: BNKO
Re: RESPA changes 1-1-10 - 01/14/10 04:28 PM
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?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/14/10 04:42 PM
Someone posted (in this very long and convoluted string) that they talked to HUD and learned that you don't have to get an "intent to proceed" when you reissue a GFE. That doesn't make sense to me but there's no official guidance. I would think you would need this every time. For instance, I issue a GFE with closing costs of $1000. The applicant lets me know they want to proceed. Then there is a changed circumstance. I reissue a GFE with costs of $2,000 now. I don't have to make sure they want to go on?
I would give some type of confirmation every time.
I would give some type of confirmation every time.
Posted By: BNKO
Re: RESPA changes 1-1-10 - 01/14/10 04:48 PM
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?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/14/10 06:03 PM
After you receive the first intent to proceed you should collect all of your "normal" fees. If you have a change that requires another fee, I believe you should issue the GFE, get their intent and then collect the additional fee.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/14/10 06:07 PM
Originally Posted By: David Dickinson
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!
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&#Post1324593
If 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.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/14/10 06:52 PM
Thank you, David. I thought I had this down until a fellow BOLer posted GFE-Seller paid items uses 'typically' too. What definition of 'typically' are the examiners going to use?
I'll be checking back often for Mr. Friend's response.
Quote:
My contact at HUD told me that if the seller "typically pays" the fees in the market in question, then no - they are not on the GFE. We have various states we are working with, and we are only disclosing the fees that are "typically" paid by the borrower.
I'll be checking back often for Mr. Friend's response.
Posted By: Pounder
Re: RESPA changes 1-1-10 - 01/14/10 07:10 PM
Does a F/I have to issue a Borrowers Achknowledgement (Intent to Proceed)?
Posted By: ML
Re: RESPA changes 1-1-10 - 01/14/10 07:18 PM
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??
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/14/10 07:27 PM
Originally Posted By: Pounder
Does a F/I have to issue a Borrowers Achknowledgement (Intent to Proceed)?
Posted By: mariem
Re: RESPA changes 1-1-10 - 01/14/10 08:06 PM
Where would credit life insurance go on the new HUD?
Posted By: biz
Re: RESPA changes 1-1-10 - 01/14/10 08:27 PM
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
#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
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/14/10 08:28 PM
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.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/14/10 08:31 PM
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.
Posted By: MAG
Re: RESPA changes 1-1-10 - 01/14/10 08:34 PM
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.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/14/10 08:39 PM
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.
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.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/14/10 09:14 PM
amen to that...this is really messed up.
Posted By: Mr. E.
Re: RESPA changes 1-1-10 - 01/14/10 09:39 PM
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?
Posted By: MAG
Re: RESPA changes 1-1-10 - 01/14/10 09:45 PM
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?
Posted By: Amos
Re: RESPA changes 1-1-10 - 01/14/10 10:24 PM
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."
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/14/10 10:29 PM
That's correct Yaz. The 10% tolerance applies to the total in that bucket. The 0% tolerance applies to each item in that bucket.
Posted By: RFitzpatrick
Re: RESPA changes 1-1-10 - 01/15/10 12:39 AM
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?
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?
Posted By: Kahola
Re: RESPA changes 1-1-10 - 01/15/10 01:57 PM
bump
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/15/10 03:21 PM
If YOU are charging a fee, it goes in Block 1.
Posted By: Jan94
Re: RESPA changes 1-1-10 - 01/15/10 04:25 PM
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.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/15/10 04:27 PM
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.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/15/10 04:43 PM
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.
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 01/15/10 04:53 PM
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.
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.
Posted By: ktac MITCH
Re: RESPA changes 1-1-10 - 01/15/10 04:54 PM
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)
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)
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/15/10 06:37 PM
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.
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.
Posted By: jross
Re: RESPA changes 1-1-10 - 01/15/10 07:09 PM
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
Posted By: Laketime
Re: RESPA changes 1-1-10 - 01/15/10 07:11 PM
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?
Posted By: Likes to Comply
Re: RESPA changes 1-1-10 - 01/15/10 08:06 PM
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
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
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/15/10 08:34 PM
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).
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).
Posted By: 4newt
Re: RESPA changes 1-1-10 - 01/15/10 08:40 PM
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!
Posted By: Angel Eyes
Re: RESPA changes 1-1-10 - 01/15/10 08:58 PM
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.
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
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...
Posted By: fmb
Okay, where's the justice?? - 01/15/10 09:05 PM
On the GFE, as we all know, we include fees that we charge in block 1. This amount transfers over to the HUD in the 800 series. Our origination charge consists of an origination fee, closings costs, and an in-house appraisal fee. We want to disclose the in-house appraisal fee on HUD line 808; otherwise it appears like our bank charges higher fees than a bank that utilizes outside appraisal services. It appears that we can't separately itemize these fees like we want to do. Am I right on this? (and are we screwed?)
Posted By: Compliance Chick
Re: Okay, where's the justice?? - 01/15/10 09:32 PM
That is corect. All the fees you retain in your bank need to be in box 1 and are not seperately itemized. You would just would not have a sepearte appraisal fee in box 3. Again, it's all about talking to your borrower and really explaining to them the form and your fees.
Posted By: DD Regs
Re: Okay, where's the justice?? - 01/15/10 09:53 PM
Originally Posted By: DD Regs
Caution: Stupid question alert:
Would every changed circustance dictate a redisclosure of a GFE?
Would every changed circustance dictate a redisclosure of a GFE?
Originally Posted By: Dan Persfull
No. But without revising the fees affected by the change would require you to live with the original disclosure.
Also, if you are going to redisclose you must do so within 3 business days of learning of the changed circumstance.
Also, if you are going to redisclose you must do so within 3 business days of learning of the changed circumstance.
Dan, that is what my explanation to loan ops was, but there response to me was, we could have 3 GFEs going out in one week to the same borrower.
Examples: Flood Search comes back, and now we know the borrowers dwelling is in a flood plane and needs flood insurance, New GFE.
Title work comes back and borrower has deliquent taxes, we now reauire Escrow, New GFE.
Appraisal comes back, too low, new loan program and loan amount. New GFE.
How does this help the consumer to get all these GFEs.
Posted By: Sinatra Fan
Re: Okay, where's the justice?? - 01/15/10 10:01 PM
This is going to sound harsh, and it's not meant to be. However, helping the consumer is not our primary concern; regulatory compliance is.
Posted By: Dan Persfull
Re: Okay, where's the justice?? - 01/15/10 10:13 PM
Quote:
Examples: Flood Search comes back, and now we know the borrowers dwelling is in a flood plane and needs flood insurance, New GFE.
Title work comes back and borrower has deliquent taxes, we now reauire Escrow, New GFE.
Title work comes back and borrower has deliquent taxes, we now reauire Escrow, New GFE.
Neither of these are subject to the 10% tolerance. They can change as necessary at closing.
Quote:
Appraisal comes back, too low, new loan program and loan amount. New GFE.
If the new program increases your origination charge then you must redisclose within 3 business days of leaning a new program is required otherwise you are bound by the origination charges disclosed on the original GFE.
In the 3 scenarios you gave the applicant would benefit from receiving a new GFE because it informs them of the additional cost associated with the loan. All the costs that could change in the scenarios given could result in significant increases in the cost of the loan and the applicant would need to be prepared and not experience "cost shock" at closing. One of the reasons for all the changes.
Posted By: ktac MITCH
Re: Okay, where's the justice?? - 01/16/10 04:40 PM
Originally Posted By: Sinatra Fan
This is going to sound harsh, and it's not meant to be. However, helping the consumer is not our primary concern; regulatory compliance is.
I know its only January, but for my money
This is Post of the Year
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/16/10 11:18 PM
Originally Posted By: jnewton
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!
I BELIEVE the answer is if you started old you stay old straight through the HUD.
However, given the fact that HUD is acting like a big ol' fish flip floppin' on the dock, I'll just tack on my daddy's favorite saying as caveat..."subject to change without notice".
Posted By: DoorKey
Re: RESPA changes 1-1-10 - 01/18/10 09:09 PM
Where within RESPA is the citation that specificaly requires that the applicant must provide an "intent to proceed" before we can collect our fees?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/18/10 09:32 PM
Originally Posted By: DoorKey
Where within RESPA is the citation that specifically requires that the applicant must provide an "intent to proceed" before we can collect our fees?
See §3500.7(a)(4) and FAQ #28 from the "GFE General" section.
Posted By: todd cook
Re: RESPA changes 1-1-10 - 01/18/10 09:41 PM
also, see Q10 under GFE - General
Posted By: AmyH
Re: RESPA changes 1-1-10 - 01/19/10 01:58 PM
In David and Jerod's presentation in Nov, it was stated that the loan term in the summary of your loan section should be the contractual term versus the amortization period for a balloon loan. My software company is showing the amortization period. I can't find this point in HUDs FAQs. Is there any official guidance on this that I have missed?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/19/10 02:22 PM
The "loan" is the note they are signing. If it's a 5 year loan with a 30 amortization, it's a 5 year note/loan. Appendix C (under the "Summary of your Loan" section) states to fill in "the loan term". It doesn't ask for the amortization period.
I don't mean to be rude, but I don't think HUD needs to issue a FAQ on this as it is common terminology and common sense.
I don't mean to be rude, but I don't think HUD needs to issue a FAQ on this as it is common terminology and common sense.
Posted By: stella
Re: RESPA changes 1-1-10 - 01/19/10 04:28 PM
I know some of the questions I am presenting have been brought up before but I am not clear on the answers and I am hoping someone can help me.
My first question involves subordination fees and fees to obtain condo management association letters. Where would you put these fees on the GFE? and if we had the borrower pay these fees directly to the bank and management companies do we even need to list them on the GFE?
My second question involves surveys, well, septic, termites...sometimes at application we do not have a contract, we will get the contract later and all of the above will be required...I assume this would be considered a changed circumstance...and these fees would all go on block 6....are we REQUIRED to give them a list for these items...we are allowing them to pick, we don't care who it is.
Thanks!
My first question involves subordination fees and fees to obtain condo management association letters. Where would you put these fees on the GFE? and if we had the borrower pay these fees directly to the bank and management companies do we even need to list them on the GFE?
My second question involves surveys, well, septic, termites...sometimes at application we do not have a contract, we will get the contract later and all of the above will be required...I assume this would be considered a changed circumstance...and these fees would all go on block 6....are we REQUIRED to give them a list for these items...we are allowing them to pick, we don't care who it is.
Thanks!
Posted By: ML
Re: RESPA changes 1-1-10 - 01/19/10 05:38 PM
Can we use a title company that is not on our list of providers if the borrower is not sure who they want to go through or does it have to be from the provided list?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/19/10 06:05 PM
Originally Posted By: stella
My second question involves surveys, well, septic, termites...sometimes at application we do not have a contract, we will get the contract later and all of the above will be required...I assume this would be considered a changed circumstance...and these fees would all go on block 6....are we REQUIRED to give them a list for these items...we are allowing them to pick, we don't care who it is.
Thanks!
Thanks!
If you are not requiring them, then they aren't required to be shown. This is a contract issue and will likely end up a 1300 series addition on the HUD.
You don't need a list because you aren't requiring the service.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/19/10 06:14 PM
Originally Posted By: ML
Can we use a title company that is not on our list of providers if the borrower is not sure who they want to go through or does it have to be from the provided list?
And yes, the list can be just one name. It's actually to your benefit to keep the list minimal. That way if the borrower chooses one of the other title companies in town, title fees move from the 10% tolerance box to the box where fees are allowed to change.
btw, this goes for all providers you give a list for, not just title companies.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/19/10 06:22 PM
To go further on Truff's analogy, ML...I think it would be odd to pick someone not on your list, but here is the one potential problem I see with that...
You are doing the picking, so they didn't shop. Does that turn it in to a required provider by default? I would think it would automatically put you in the 10% bucket, regardless.
You are doing the picking, so they didn't shop. Does that turn it in to a required provider by default? I would think it would automatically put you in the 10% bucket, regardless.
Posted By: BNKO
Re: RESPA changes 1-1-10 - 01/19/10 07:24 PM
When doing an assumption, I know the GFE is required, but would the List of Service Providers be required if the loan is not closing at a title company?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/19/10 07:39 PM
This must have been discussed here somewhere but I'm have a brain freeze...
Borrower is given GFE with floating rate within three days.
All fees, etc on that GFE are good for 10 days.
On day 4, borrower calls to lock rate which is a changed circumstance
Does the changed circumstance necessitating a new GFE negate the ten days thereby allowing you to change the fees with regard to the lock?
Do you HAVE to give a revised GFE if when the rate is locked, the only things that change are the dates in 2 & 3?
Borrower is given GFE with floating rate within three days.
All fees, etc on that GFE are good for 10 days.
On day 4, borrower calls to lock rate which is a changed circumstance
Does the changed circumstance necessitating a new GFE negate the ten days thereby allowing you to change the fees with regard to the lock?
Do you HAVE to give a revised GFE if when the rate is locked, the only things that change are the dates in 2 & 3?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/19/10 07:47 PM
Yes, you give them a new 10 days tho.
yes.
yes.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/19/10 07:49 PM
Originally Posted By: BNKO
When doing an assumption, I know the GFE is required, but would the List of Service Providers be required if the loan is not closing at a title company?
If you aren't requiring it, there's no required service to provide a list for.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/19/10 07:51 PM
Thanks, joker. You're my lifeline call for today. I do wish I were just sitting at home watching this on tv though.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/19/10 07:53 PM
Originally Posted By: Truffle Royale
I do wish I were just sitting at home watching this on tv though.
Nightmare on Mortgage Row? or Nightmare at Morgage Central!
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/19/10 07:58 PM
We know it wouldn't be called The Millionaire 'cause ain't nobody getting rich in this business anymore.
Posted By: ML
Re: RESPA changes 1-1-10 - 01/19/10 08:56 PM
Thank you, Truffle Royale and RR joker.
Posted By: FABCompliance
Re: RESPA changes 1-1-10 - 01/19/10 10:16 PM
Where would you list an assumption fee on the new GFE?
Posted By: ahou
Re: RESPA changes 1-1-10 - 01/19/10 10:34 PM
If the assumption fee is charged and retained by the lender, then it goes into the orig charge, block one.
Posted By: ahou
Re: RESPA changes 1-1-10 - 01/19/10 10:39 PM
Mgmt is struggling with the loan level pricing adj fee. It appears to go in block 1 orig charge. Mgmt is arguing that the fee is actually a FNMA fee and is passed to them. How are you disclosing it?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/19/10 10:57 PM
Quote:
And yes, the list can be just one name. It's actually to your benefit to keep the list minimal. That way if the borrower chooses one of the other title companies in town, title fees move from the 10% tolerance box to the box where fees are allowed to change.
Obviously, this is still up for debate, but I believe you should try to get as many services in the 10% tolerance bucket as possible. That way the "grace" of 10% becomes larger. If you only have a few services (flood determination, appraisal and credit report) in there and something is off (let's say the appraisal is off $50), you're more likely to be outside of tolerance and have to reimburse. But if the 10% tolerance bucket includes most things (including the title services which is the highest fees), you're likely to be within your 10% tolerance.
Just my opinion.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/19/10 11:25 PM
Originally Posted By: David Dickinson
Originally Posted By: David Dickinson
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!
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&#Post1324593
If 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.
I got a reply. Here's what David Friend (of HUD) stated:
--------------------------------------------------------------
In order to determine which areas need the most clarification concerning the preparation and completion of the new GFE and HUD-1 forms, we are reviewing many different websites and blog postings, as well as additional email queries we have been receiving. Bankers Online has been one of the websites I have been reviewing and find it to be very helpful in discovering the questions that are currently generating the most debate. We are currently developing additional guidance to be posted in the near future.
Your feedback is appreciated, and is very helpful as everyone works towards implementing the new RESPA regulation and giving consumers the information they need to make informed decisions about one of the most important transactions in their lives.
Posted By: FABCompliance
Re: RESPA changes 1-1-10 - 01/20/10 03:13 PM
What about an assignment fee? Where would that go? In block 4 with title company charges?
Posted By: Howard Lax
Re: RESPA changes 1-1-10 - 01/20/10 03:58 PM
See the FAQ. HUD suggests that it is a charge to the borrower listed in box 3 of Block 2. If you are giving the borrower a credit for lender paid broker fees, you cannot have both a credit and charge in Block 2. If you have a credit in Block 2, you either increase the amount in Block 1 to cover any potential LLPA, or you require the borrower to lock-in the interest rate three business days prior to closing and give the borrower a revised GFE that reduces the credit in Block 2 by the amount of the LLPA. The latter method may cause problems for your relationship with the borrower.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/20/10 04:56 PM
Originally Posted By: David Dickinson
Quote:
And yes, the list can be just one name. It's actually to your benefit to keep the list minimal. That way if the borrower chooses one of the other title companies in town, title fees move from the 10% tolerance box to the box where fees are allowed to change.
Obviously, this is still up for debate, but I believe you should try to get as many services in the 10% tolerance bucket as possible. That way the "grace" of 10% becomes larger. If you only have a few services (flood determination, appraisal and credit report) in there and something is off (let's say the appraisal is off $50), you're more likely to be outside of tolerance and have to reimburse. But if the 10% tolerance bucket includes most things (including the title services which is the highest fees), you're likely to be within your 10% tolerance.
Just my opinion.
I tend to agree with David. I just had to redo a HUD for an attorney who had messed it up and although I wouldn't have had a tolerance issue anyway, I had a cushion of $712 because the borrower didn't purchase OTI. I like zeros!
Posted By: TB 12
Re: RESPA changes 1-1-10 - 01/20/10 07:02 PM
Originally Posted By: FABCompliance
What about an assignment fee? Where would that go? In block 4 with title company charges?
Who is getting the assignment fee?
Posted By: CSB98
Re: RESPA changes 1-1-10 - 01/21/10 10:03 PM
Quick question, probably answered before but I cannot find it. If we are doing a simultaneous second (no costs associated with this loan), do we still have to show the costs associated with this loan and show it has a credit in Block 2 or can the blocks just contain zeroes?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/22/10 01:22 PM
You'll have separate disclosures, one pertaining to each transaction. The second will show on the HUD for the 1st in the 200 section...is that what you are asking?
Posted By: 2old2care
Hud Memo Transfer Taxes - 01/22/10 03:01 PM
A post from 1-15-10 stated, "The email I got from HUD was about transfer taxes, not credit report." I have a question about "transfer taxes" and would appreciate clarification.
RESPA now states that unless state law dictates otherwise, regardless of what is customary or what the purchase contract states, the full amount of the transfer tax/stamps should be disclosed as a charge to the borrower on the GFE:”
I have started to reseach various states but I want to be clear on my understanding. Let's say in a particular state, the law clearly has instructed that the seller is required to pay these taxes. In this instance I would be within the regulation to NOT disclose these taxes on the GFE for the borrower?
RESPA now states that unless state law dictates otherwise, regardless of what is customary or what the purchase contract states, the full amount of the transfer tax/stamps should be disclosed as a charge to the borrower on the GFE:”
I have started to reseach various states but I want to be clear on my understanding. Let's say in a particular state, the law clearly has instructed that the seller is required to pay these taxes. In this instance I would be within the regulation to NOT disclose these taxes on the GFE for the borrower?
Posted By: CSB98
Re: RESPA changes 1-1-10 - 01/22/10 03:05 PM
Originally Posted By: RR joker
You'll have separate disclosures, one pertaining to each transaction. The second will show on the HUD for the 1st in the 200 section...is that what you are asking?
Not sure if I understand. We will not be charging any fees on the 2nd REM since the costs were included for the 1st REM. So, do we have to show the fees even though we're not charging them on the 2nd REM or can we just put zeroes? I was reading in the FAQs that for "no cost" loans a credit should be listed in Block 2, which would result in a negative number in Block A. Does this make sense?
Posted By: SnuffytheSeal
Re: Okay, where's the justice?? - 01/22/10 03:07 PM
Originally Posted By: ktac MITCH
Originally Posted By: Sinatra Fan
This is going to sound harsh, and it's not meant to be. However, helping the consumer is not our primary concern; regulatory compliance is.
I know its only January, but for my money
This is Post of the Year
I SECOND THAT!
Posted By: Comply Wren
Re: Hud Memo Transfer Taxes - 01/22/10 03:13 PM
I believe that is correct. In PA, the buyer and seller evenly split transfer taxes. I recently got an e-mail from the PA Land Title Association that we got a ruling from HUD to only show the borrower's portion of transfer taxes on the GFE.
Posted By: Truffle Royale
Re: Hud Memo Transfer Taxes - 01/22/10 03:15 PM
Originally Posted By: 2old2care
A post from 1-15-10 stated, "The email I got from HUD was about transfer taxes, not credit report." I have a question about "transfer taxes" and would appreciate clarification.
RESPA now states that unless state law dictates otherwise, regardless of what is customary or what the purchase contract states, the full amount of the transfer tax/stamps should be disclosed as a charge to the borrower on the GFE:”
I have started to reseach various states but I want to be clear on my understanding. Let's say in a particular state, the law clearly has instructed that the seller is required to pay these taxes. In this instance I would be within the regulation to NOT disclose these taxes on the GFE for the borrower?
RESPA now states that unless state law dictates otherwise, regardless of what is customary or what the purchase contract states, the full amount of the transfer tax/stamps should be disclosed as a charge to the borrower on the GFE:”
I have started to reseach various states but I want to be clear on my understanding. Let's say in a particular state, the law clearly has instructed that the seller is required to pay these taxes. In this instance I would be within the regulation to NOT disclose these taxes on the GFE for the borrower?
Posted By: 2old2care
Re: Hud Memo Transfer Taxes - 01/22/10 03:28 PM
Thank you. MI is one I was researching so you just saved me time on that one. I appreciate your assistance.
Posted By: Compliance Nanny
Re: Hud Memo Transfer Taxes - 01/22/10 03:33 PM
We are a 50/50 split of transfer tax in our state. If we do not list the full amount of the transfer tax (even though they only pay half) on the GFE we get a violation on the HUD that we are over the 0 tolereance when we list the full amount of the transfter tax on the HUD. We then split the costs on the HUD.
Anyone having this issue with their software?
Anyone having this issue with their software?
Posted By: Truffle Royale
Re: Hud Memo Transfer Taxes - 01/22/10 03:34 PM
Michigan Section 207.523 State Real Estate Transfer Tax Act Sec 3 - #2 "The person who is the seller or grantor of the property is liable for the tax imposed under this act."
Posted By: QCL
Re: RESPA changes 1-1-10 - 01/22/10 03:39 PM
Originally Posted By: ktac MITCH
Originally Posted By: Sinatra Fan
This is going to sound harsh, and it's not meant to be. However, helping the consumer is not our primary concern; regulatory compliance is.
I know its only January, but for my money
This is Post of the Year
Just for you guys I created the following:
http://diy2.despair.com/spage/8240091.html
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/22/10 03:49 PM
Originally Posted By: CSB1
Originally Posted By: RR joker
You'll have separate disclosures, one pertaining to each transaction. The second will show on the HUD for the 1st in the 200 section...is that what you are asking?
Not sure if I understand. We will not be charging any fees on the 2nd REM since the costs were included for the 1st REM. So, do we have to show the fees even though we're not charging them on the 2nd REM or can we just put zeroes? I was reading in the FAQs that for "no cost" loans a credit should be listed in Block 2, which would result in a negative number in Block A. Does this make sense?
Ah! You are talking about origination fees. IMHO, unless you want to give the borrower money...you need to show the total origination fees (that would be charged) in Block 1, then show an offset credit in Block 2 for a net of Zero in A.
Posted By: newyork
Re: RESPA changes 1-1-10 - 01/22/10 04:06 PM
We just received the first new HUD of the year. The title company closing the transaction for the ledning institution had their own training on completing the new HUD's. On the 800 items, they listed all bank fees in a lump sum on the column where the borrower is paying the fees. However, they also did a breakdown of all fees related to the origination charge on the inside lines of the HUD. The same goes with the 1100's charges. we have a lumpsum for the title services, but they also did a breakdown of the fees in that lumpsum. and the breakdown is on the inside lines of the HUD. I thought we could not do breakdown of fees on the new HUD's? please help...
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/22/10 04:43 PM
The only thing IN the column on 803 is the adjusted origination charges. Then you have the appraisal, credit report, etc broken out separately. (required services)
The 1101 should show the total title services. but a breakout is over to the left. I don't know how you couldn't break out the 1100 fees...but the origination fees - No.
if you look at some of the examples (I'm looking at the OTS example from a teleconference) all they broke out separately was the lender title and the settlement fee that the seller was paying.
In this case it appears the entire amount on 1101 is comprised of just the title services/lender's title insurance. when you take out the fee for the LTI, the title exam charge was $750.00. There was nothing else to disclose.
I'm looking at one where they broke it out further. I've got a settlement fee (PPFC), LTI, Title Binder and title exam broken down to make the full total in the borrower's column.
The 1101 should show the total title services. but a breakout is over to the left. I don't know how you couldn't break out the 1100 fees...but the origination fees - No.
if you look at some of the examples (I'm looking at the OTS example from a teleconference) all they broke out separately was the lender title and the settlement fee that the seller was paying.
In this case it appears the entire amount on 1101 is comprised of just the title services/lender's title insurance. when you take out the fee for the LTI, the title exam charge was $750.00. There was nothing else to disclose.
I'm looking at one where they broke it out further. I've got a settlement fee (PPFC), LTI, Title Binder and title exam broken down to make the full total in the borrower's column.
Posted By: Still Smiling
Re: RESPA changes 1-1-10 - 01/22/10 04:53 PM
I appologize if this has been asked before; can't seem to find it.
The loan has just been locked, so a revised GFE must be provided. What happens if in order for the borrower to get the original quoted rate,the points in Block 1 will go up. Is that permissable. Sorry, I guess I should know this, but at this moment I am not certain about anything. Thanks in advance...
The loan has just been locked, so a revised GFE must be provided. What happens if in order for the borrower to get the original quoted rate,the points in Block 1 will go up. Is that permissable. Sorry, I guess I should know this, but at this moment I am not certain about anything. Thanks in advance...
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/22/10 04:56 PM
If it's due to the rate lock, then yes! So long as you are past the date you listed in #1.
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 01/22/10 05:00 PM
Originally Posted By: QueenChop'dLiver
Originally Posted By: ktac MITCH
Originally Posted By: Sinatra Fan
This is going to sound harsh, and it's not meant to be. However, helping the consumer is not our primary concern; regulatory compliance is.
I know its only January, but for my money
This is Post of the Year
Just for you guys I created the following:
http://diy2.despair.com/spage/8240091.html
OH, that is too funny! Hey, can I get any royalties from the sale of that poster? I could use them to offset my increased expenses for Tums.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/22/10 05:20 PM
Originally Posted By: CSB1
Not sure if I understand. We will not be charging any fees on the 2nd REM since the costs were included for the 1st REM. So, do we have to show the fees even though we're not charging them on the 2nd REM or can we just put zeroes? I was reading in the FAQs that for "no cost" loans a credit should be listed in Block 2, which would result in a negative number in Block A. Does this make sense?
Ah! You are talking about origination fees. IMHO, unless you want to give the borrower money...you need to show the total origination fees (that would be charged) in Block 1, then show an offset credit in Block 2 for a net of Zero in A.
Ah! You are talking about origination fees. IMHO, unless you want to give the borrower money...you need to show the total origination fees (that would be charged) in Block 1, then show an offset credit in Block 2 for a net of Zero in A.
I've been thinking about this a lot. I believe you are doing 1 settlement and have 2 loans (80/20). All fees have to be shown, but not on BOTH HUD-1s. List all fees on the 80% financing loan and then only list fees specific to the 20% loan.
If you don't do this and you are outside of tolerance, you have to reimburse them twice for the same error. If you list a credit on the 2nd loan and fees come in lower, you have to give them the credit (since you can't reduce Block 2/802).
Posted By: Still Smiling
Re: RESPA changes 1-1-10 - 01/22/10 05:56 PM
Ok,so I understand if once the rate locks, origination fees in Block 1 change this is ok even if the customer decides to lock his rate during the original 10 day period?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/22/10 05:58 PM
Look at the details of the important dates, #1. then look at the languge in #2 (all OTHER).
If I come in and apply today and you guarantee my rate for the next fifteen minutes, anything regarding that information can change at 15.1 minutes later. Everything ELSE, however, has to be good for 10 days.
then, if they lock in 2 days later, you do a new 10 days and adjust your other blocks now that you have the info you need for 3 & 4. Nothing else in the 10-day part can change, except what was affected by the rate lock, unless you have additional changed circumstances.
If I come in and apply today and you guarantee my rate for the next fifteen minutes, anything regarding that information can change at 15.1 minutes later. Everything ELSE, however, has to be good for 10 days.
then, if they lock in 2 days later, you do a new 10 days and adjust your other blocks now that you have the info you need for 3 & 4. Nothing else in the 10-day part can change, except what was affected by the rate lock, unless you have additional changed circumstances.
Posted By: RobinB
Re: RESPA changes 1-1-10 - 01/22/10 07:01 PM
Originally Posted By: Sinatra Fan
Originally Posted By: QueenChop'dLiver
Originally Posted By: ktac MITCH
Originally Posted By: Sinatra Fan
This is going to sound harsh, and it's not meant to be. However, helping the consumer is not our primary concern; regulatory compliance is.
I know its only January, but for my money
This is Post of the Year
Just for you guys I created the following:
http://diy2.despair.com/spage/8240091.html
OH, that is too funny! Hey, can I get any royalties from the sale of that poster? I could use them to offset my increased expenses for Tums.
Thanks, I just made this my desktop wallpaper : )
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/22/10 07:16 PM
That is awesome. Thanks for sharing.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/22/10 07:26 PM
Mine is now hanging proudly on my door just under the "do not torment, etc, the CO" sign.
Posted By: Mr. E.
Re: RESPA changes 1-1-10 - 01/22/10 08:11 PM
Okay, one more time. With a valid change of circumstance can the credit on page2 block 2 box 2 of the GFE change if the change of circumstance is related to the loan amount after the rate is locked?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/22/10 08:23 PM
loan amount and based on a percentage, yes.
Posted By: Many Hats
Re: RESPA changes 1-1-10 - 01/22/10 09:15 PM
We just prepared our first HUD1-A for a bank paid closing cost HELOAN. What a nightmare!
BYTE doesn't have the HUD1-A ready yet in their software, so I tried to use the one from HUD...thinking it was a PDF fill-in form...but it's not fillable. So, we make a copy of it and type everything in.
In the process, we found that the mortgage recording fee was $8.50 more than disclosed, which represented a 15.3% increase in the fee! Since it was bank paid closing costs anyway, we just left it the way it is ... showing a 15.3% increase in the fee on page 2 of the HUD1-A.
Did anyone notice that the HUD doesn't have a place for the borrowers signature? So, we typed in a place on the bottom of the form...thinking surely they want the borrower to sign it!?
BYTE doesn't have the HUD1-A ready yet in their software, so I tried to use the one from HUD...thinking it was a PDF fill-in form...but it's not fillable. So, we make a copy of it and type everything in.
In the process, we found that the mortgage recording fee was $8.50 more than disclosed, which represented a 15.3% increase in the fee! Since it was bank paid closing costs anyway, we just left it the way it is ... showing a 15.3% increase in the fee on page 2 of the HUD1-A.
Did anyone notice that the HUD doesn't have a place for the borrowers signature? So, we typed in a place on the bottom of the form...thinking surely they want the borrower to sign it!?
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 01/22/10 09:31 PM
There is intentionally no place to sign it and according to HUD, you are not supposed to add signature lines.
Posted By: Comply Wren
Re: RESPA changes 1-1-10 - 01/22/10 09:37 PM
Originally Posted By: raitchjay
There is intentionally no place to sign it and according to HUD, you are not supposed to add signature lines.
raitchjay, actually, if you look at 3500.9 of HUD's Reg X, the addition of signature lines is a permissible change on the Settlement Statement. You are expressly not permitted to add signature lines to the GFE.
Posted By: Many Hats
Re: RESPA changes 1-1-10 - 01/22/10 09:45 PM
Thank you for the clarification.
Why on earth would they not have signature lines on the HUD?
Let me ask another question...let's say the HELOAN was NOT bank paid and instead the borrower was paying the closing costs.
Would the fact that the recording fee went from $55.50 to $64.00, representing a 15.3% increase really cause us to have to re-disclose and delay closing (or eat the cost - which is what we would likely do)?
I almost wonder if we should over disclose on recording fees, just in case someone has a monster legal description, which will cost an extra $8.50.
Why on earth would they not have signature lines on the HUD?
Let me ask another question...let's say the HELOAN was NOT bank paid and instead the borrower was paying the closing costs.
Would the fact that the recording fee went from $55.50 to $64.00, representing a 15.3% increase really cause us to have to re-disclose and delay closing (or eat the cost - which is what we would likely do)?
I almost wonder if we should over disclose on recording fees, just in case someone has a monster legal description, which will cost an extra $8.50.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/22/10 09:47 PM
I would ALWAYS get the Settlement Statement signed. It's a closing document.
Posted By: AKA nan
Re: RESPA changes 1-1-10 - 01/23/10 12:37 AM
Originally Posted By: Comply Wren
Originally Posted By: raitchjay
There is intentionally no place to sign it and according to HUD, you are not supposed to add signature lines.
raitchjay, actually, if you look at 3500.9 of HUD's Reg X, the addition of signature lines is a permissible change on the Settlement Statement. You are expressly not permitted to add signature lines to the GFE.
You can't add signature lines to the GFE??
Posted By: Chance
Re: RESPA changes 1-1-10 - 01/23/10 12:58 AM
AKAnan - No, the GFE is a standardized form and may not be altered for signature lines. Refer to the FAQs under the General topic, page 9, questions 27 & 28.
Hope this helps!
Hope this helps!
Posted By: ahou
Re: RESPA changes 1-1-10 - 01/23/10 11:38 PM
Customer usually want us to overnight funds to payoff a loan at a 3rd party bank to avoid paying additional interest. The bank does not require this. Will this fee have to be in our origination charge, even if we are not requiring this service? If it doesn't go into our origination charge, where do we put it?
HUD-1 – General
1) Q: How are courier and overnight delivery fees shown on the HUD-1 Settlement Statement?
A: Courier and overnight delivery fees are considered to be fees for administrative or processing services. They are part of a primary service, such as the origination service or title service, and may not be separately itemized.
HUD-1 – General
1) Q: How are courier and overnight delivery fees shown on the HUD-1 Settlement Statement?
A: Courier and overnight delivery fees are considered to be fees for administrative or processing services. They are part of a primary service, such as the origination service or title service, and may not be separately itemized.
Posted By: pjs
Re: RESPA changes 1-1-10 - 01/25/10 12:53 PM
Originally Posted By: Sinatra Fan
Originally Posted By: QueenChop'dLiver
Originally Posted By: ktac MITCH
Originally Posted By: Sinatra Fan
This is going to sound harsh, and it's not meant to be. However, helping the consumer is not our primary concern; regulatory compliance is.
I know its only January, but for my money
This is Post of the Year
Just for you guys I created the following:
http://diy2.despair.com/spage/8240091.html
OH, that is too funny! Hey, can I get any royalties from the sale of that poster? I could use them to offset my increased expenses for Tums.
Love it. I have it as my background on computer! Thanks!
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/25/10 02:31 PM
Originally Posted By: ahou
Customer usually want us to overnight funds to payoff a loan at a 3rd party bank to avoid paying additional interest. The bank does not require this. Will this fee have to be in our origination charge, even if we are not requiring this service? If it doesn't go into our origination charge, where do we put it?
HUD-1 – General
1) Q: How are courier and overnight delivery fees shown on the HUD-1 Settlement Statement?
A: Courier and overnight delivery fees are considered to be fees for administrative or processing services. They are part of a primary service, such as the origination service or title service, and may not be separately itemized.
HUD-1 – General
1) Q: How are courier and overnight delivery fees shown on the HUD-1 Settlement Statement?
A: Courier and overnight delivery fees are considered to be fees for administrative or processing services. They are part of a primary service, such as the origination service or title service, and may not be separately itemized.
ahou, you are not requiring it so it will go in the 1300 section of the HUD (miscellaneous customer junk)
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/25/10 02:34 PM
Originally Posted By: Many Hats
Thank you for the clarification.
Why on earth would they not have signature lines on the HUD?
Let me ask another question...let's say the HELOAN was NOT bank paid and instead the borrower was paying the closing costs.
Would the fact that the recording fee went from $55.50 to $64.00, representing a 15.3% increase really cause us to have to re-disclose and delay closing (or eat the cost - which is what we would likely do)?
I almost wonder if we should over disclose on recording fees, just in case someone has a monster legal description, which will cost an extra $8.50.
Why on earth would they not have signature lines on the HUD?
Let me ask another question...let's say the HELOAN was NOT bank paid and instead the borrower was paying the closing costs.
Would the fact that the recording fee went from $55.50 to $64.00, representing a 15.3% increase really cause us to have to re-disclose and delay closing (or eat the cost - which is what we would likely do)?
I almost wonder if we should over disclose on recording fees, just in case someone has a monster legal description, which will cost an extra $8.50.
Did your total of all 10% items exceed 10%? Those items don't stand alone, it's an aggregate.
As far as delaying closing, it really shouldn't. It will be shown as a correction with you "eating" it and you go ahead and close. You will or should know this well in advance of closing in order to get the corrections made.
Curiously tho. How are you using a HUD-1A on a bank-paid closing cost loan..there's no 200 section.
Posted By: Brooks1435
Re: RESPA changes 1-1-10 - 01/25/10 02:50 PM
Our bank charges a $25 insurance non tracking fee on every real estate loan that goes to pay an annual insurance premium the bank has purchased. We show it as paid to the bank on the HUD even though it will be forwarded on to a third party eventually. Would this go in block 1 of the GFE or block 3?
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 01/25/10 02:54 PM
I will assume this is a service similar to a Tax Service fee. That charge would go in Block 3 and on the HUD you would have to identify the party the $25 is paid to. It would also be a PPFC.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/25/10 02:55 PM
If it's actually going to a 3rd party (eventually), you should be showing that in Block 3 and name the eventual party i the Paid to: on the HUD.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 01/25/10 11:36 PM
On the HUD, where are others listing the upfront MIP and VA Fundign fees??
Harland is telling us to report on line 902, which I am cautious of, but I cannot find a more reasonable place for it.
Harland is telling us to report on line 902, which I am cautious of, but I cannot find a more reasonable place for it.
Posted By: midwestgal
Re: RESPA changes 1-1-10 - 01/25/10 11:39 PM
Jay, we are putting the upfront MIP in 902, but the VA funding fees, FM fees, we are putting in 808-813.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 01/25/10 11:54 PM
that sounds reasonable.
Posted By: Will B
Re: RESPA changes 1-1-10 - 01/26/10 06:32 PM
If we failed to disclose Owners Title Insurance on the GFE then we have to cure it on the HUD-1. But what if it's being by the seller? Do we still have to issue the cure to the borrower?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/26/10 06:37 PM
This cure thing is my new focus issue too.
If the charge is NOT to the borrower, why would you have to reimburse them?
If there is a fee that is added on at the last minute but the bank elects to pay it, you redisclose the GFE but mark the HUD POCL, right? what's to reimburse?
If the charge is NOT to the borrower, why would you have to reimburse them?
If there is a fee that is added on at the last minute but the bank elects to pay it, you redisclose the GFE but mark the HUD POCL, right? what's to reimburse?
Posted By: jejo
Re: RESPA changes 1-1-10 - 01/26/10 07:12 PM
I saw some questions regarding this on 1/15/10 but I never found an answer. How do you disclose a single pay loan that is subject to RESPA on the GFE??
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 01/26/10 07:15 PM
Our bank is displaying 15 business day for line 2 in the important date section. If on day 16 we find out something unusal for the loan, we can disclose correct? What about if we already have obtain proceed to move forward?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/26/10 07:28 PM
Originally Posted By: Will B
If we failed to disclose Owners Title Insurance on the GFE then we have to cure it on the HUD-1. But what if it's being by the seller? Do we still have to issue the cure to the borrower?
Quote:
This cure thing is my new focus issue too.
If the charge is NOT to the borrower, why would you have to reimburse them?
If there is a fee that is added on at the last minute but the bank elects to pay it, you redisclose the GFE but mark the HUD POCL, right? what's to reimburse?
If the charge is NOT to the borrower, why would you have to reimburse them?
If there is a fee that is added on at the last minute but the bank elects to pay it, you redisclose the GFE but mark the HUD POCL, right? what's to reimburse?
There's a lot of things that bother me with the new RESPA rule, but this one takes the take. HUD says (my paraphrase) "it doesn't matter who paid the fee. You said this is the cost/credit. If if you're outside of tolerance, you must reimburse the borrower."
See FAQ #13 in the "Cure" section (currently on page 37). Also, see FAQ #4 in the "GFE-Block 2" section (currently page 25
Posted By: Will B
Re: RESPA changes 1-1-10 - 01/26/10 08:23 PM
Originally Posted By: David Dickinson
Originally Posted By: Will B
If we failed to disclose Owners Title Insurance on the GFE then we have to cure it on the HUD-1. But what if it's being by the seller? Do we still have to issue the cure to the borrower?
Quote:
This cure thing is my new focus issue too.
If the charge is NOT to the borrower, why would you have to reimburse them?
If there is a fee that is added on at the last minute but the bank elects to pay it, you redisclose the GFE but mark the HUD POCL, right? what's to reimburse?
If the charge is NOT to the borrower, why would you have to reimburse them?
If there is a fee that is added on at the last minute but the bank elects to pay it, you redisclose the GFE but mark the HUD POCL, right? what's to reimburse?
There's a lot of things that bother me with the new RESPA rule, but this one takes the take. HUD says (my paraphrase) "it doesn't matter who paid the fee. You said this is the cost/credit. If if you're outside of tolerance, you must reimburse the borrower."
See FAQ #13 in the "Cure" section (currently on page 37). Also, see FAQ #4 in the "GFE-Block 2" section (currently page 25
That's how it looked to me as well. So if we failed to disclose Owners Title insurance on the GFE and the actual cost was $500, we'll have a $500 difference in our 10% category on the HUD-1 comparison, correct?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/26/10 08:31 PM
Correct. You'll owe them the difference between these fee (and any others that go over and 10% of the total of the GFE fees in the "10% bucket".
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 01/27/10 02:49 PM
I think Judy from HUD is starting to flirt with me... just something I sense from the tone in her email replys to me... I think we might have something special starting here. 
Posted By: M Cockrell
Re: RESPA changes 1-1-10 - 01/27/10 02:53 PM
I think Judy is really Ellie Light.
Posted By: SaaL
Re: RESPA changes 1-1-10 - 01/27/10 03:04 PM
I need some help with the GFE, Summary of your loan section on a one time close construction loan. It's a fixed rate, 30/15, interest only during the draw period, payments for the remainder of the term, obivously with a balloon. I'm specifically concerned about "your initial monthly amount owed, and the "can your monthly payment rise" section.
Should I base the initial monthly payment on my Reg Z assumptions and show the first month's interest payment based on 1/2 of the balance outstanding? Or should I show one months interst assuming the balance is fully drawn at funding?
And based on that, how would I describe how payments can change?
What I'm thinking is that I should show the worst case scenario (fully drawn at funding) first interest payment as the initial payment, then I would show the p&I payment in the first amount it can rise to with the # of mos to the start of the perm, and then the maximum it can ever rise to would be the balloon plus interest due?
I apologize if this has been answered elsewhere but I didn't find my specific scenario addressed anywhere.
Thanks!
Should I base the initial monthly payment on my Reg Z assumptions and show the first month's interest payment based on 1/2 of the balance outstanding? Or should I show one months interst assuming the balance is fully drawn at funding?
And based on that, how would I describe how payments can change?
What I'm thinking is that I should show the worst case scenario (fully drawn at funding) first interest payment as the initial payment, then I would show the p&I payment in the first amount it can rise to with the # of mos to the start of the perm, and then the maximum it can ever rise to would be the balloon plus interest due?
I apologize if this has been answered elsewhere but I didn't find my specific scenario addressed anywhere.
Thanks!
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 01/27/10 03:08 PM
To answer your first question, my dear Judy just responded to me this morning on an almost smae question, how to reflect that first IO payment of a one close contr-perm loan:
"The amount would be interest times first draw amount based on one month."
"The amount would be interest times first draw amount based on one month."
Posted By: SaaL
Re: RESPA changes 1-1-10 - 01/27/10 03:50 PM
Hmmm - so what if we don't know the first draw amount? Should we assume half the loan amount?
If you're o.k. with it would you PM me the contact info for your beloved "Judy" and maybe I can try to contact her directly and get more clarification? I haven't had to contact them yet and I'm not sure of the best way to go about it to get a fairly quick answer.
If you're o.k. with it would you PM me the contact info for your beloved "Judy" and maybe I can try to contact her directly and get more clarification? I haven't had to contact them yet and I'm not sure of the best way to go about it to get a fairly quick answer.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 01/27/10 03:59 PM
I have returned another email asking the same question!
HSGRESPA@hud.gov - there is no such thing as a fairly quick answer... I waited two weeks for that one.
HSGRESPA@hud.gov - there is no such thing as a fairly quick answer... I waited two weeks for that one.
Posted By: SaaL
Re: RESPA changes 1-1-10 - 01/27/10 04:03 PM
Thanks so much for yuo help - that's what I was afraid of. My GFE is due out today so i'm just going to take my best shot...
Posted By: ahou
Re: RESPA changes 1-1-10 - 01/27/10 04:09 PM
[I think Judy from HUD is starting to flirt with me... just something I sense from the tone in her email replys to me... I think we might have something special starting here.]
Just Jay, since you now have "connections" at HUD, can you get us an answer on the LLPA fee?
Just Jay, since you now have "connections" at HUD, can you get us an answer on the LLPA fee?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 01/27/10 04:10 PM
See my post above... I have no more special connection than you do.
we are trying to keep our professional relationship separate from our fledging romance.
we are trying to keep our professional relationship separate from our fledging romance.
Posted By: stella
Re: RESPA changes 1-1-10 - 01/27/10 06:09 PM
question:
We receive a purchse contract calling for a termite, well and septic...we then, as a lender, require these services because they are in the contract, but we let them shop and pick who they want...we give a list with one provider name...we put the fee in block 6. If they pick the service provider off our list it will go on the HUD in the fees that can change by 10% "bucket", but if they pick someone not on our list it will go in the fees that can change unlimited "bucket". Am I getting this? Also how will the title company know if they picked someone off our list, won't they assume that since it is in block 6 that it will be in the unlimited bucket?
Thanks!
We receive a purchse contract calling for a termite, well and septic...we then, as a lender, require these services because they are in the contract, but we let them shop and pick who they want...we give a list with one provider name...we put the fee in block 6. If they pick the service provider off our list it will go on the HUD in the fees that can change by 10% "bucket", but if they pick someone not on our list it will go in the fees that can change unlimited "bucket". Am I getting this? Also how will the title company know if they picked someone off our list, won't they assume that since it is in block 6 that it will be in the unlimited bucket?
Thanks!
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 01/27/10 06:18 PM
Originally Posted By: stella
question:
Also how will the title company know if they picked someone off our list, won't they assume that since it is in block 6 that it will be in the unlimited bucket?
Also how will the title company know if they picked someone off our list, won't they assume that since it is in block 6 that it will be in the unlimited bucket?
Stella, you as the lender are responsible for providing the settlement agent with the information necessary to complete the last page of the new HUD-1 or HUD-1A form. You will need to find out from your customer what company they went with.
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 01/27/10 07:22 PM
Originally Posted By: stella
question:
We receive a purchse contract calling for a termite, well and septic...we then, as a lender, require these services because they are in the contract, but we let them shop and pick who they want
Thanks!
We receive a purchse contract calling for a termite, well and septic...we then, as a lender, require these services because they are in the contract, but we let them shop and pick who they want
Thanks!
I'm not sure I agree that you as a lender require them simply because it's in the contract. Our question - in line with "if you insist, it's on the list" - is will I allow this loan to close without <fill in the blank>. If the answer is yes, then we're not putting it on the GFE and letting the item to go into the 1300 section of the HUD-1. If the answer is no, then it needs to be on the GFE with a vendor.
My two cents (is that four cents with inflation?)
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/27/10 08:36 PM
I agree with RESPA Queen. This is one of the areas that I don't believe HUD has answered well. I'm going with "if you don't require it and the title company doesn't require it, it doesn't go on the GFE.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/27/10 08:44 PM
Originally Posted By: SaaL
Thanks so much for yuo help - that's what I was afraid of. My GFE is due out today so i'm just going to take my best shot...
Because we have no clue about the first draw (usually) we have elected to show the fully drawn payment which also prevents having to check yes on your payment can change.
Right, wrong, or indifferent...no one can say it's not worst case.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/27/10 08:46 PM
Originally Posted By: respa queen
Originally Posted By: stella
question:
We receive a purchse contract calling for a termite, well and septic...we then, as a lender, require these services because they are in the contract, but we let them shop and pick who they want
Thanks!
We receive a purchse contract calling for a termite, well and septic...we then, as a lender, require these services because they are in the contract, but we let them shop and pick who they want
Thanks!
I'm not sure I agree that you as a lender require them simply because it's in the contract. Our question - in line with "if you insist, it's on the list" - is will I allow this loan to close without <fill in the blank>. If the answer is yes, then we're not putting it on the GFE and letting the item to go into the 1300 section of the HUD-1. If the answer is no, then it needs to be on the GFE with a vendor.
My two cents (is that four cents with inflation?)
I, for one, totally agree, RQ...as HUD says..the contract is "meaningless". the lender either requires it or they don't.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 01/27/10 08:52 PM
Originally Posted By: RR joker
Originally Posted By: SaaL
Thanks so much for yuo help - that's what I was afraid of. My GFE is due out today so i'm just going to take my best shot...
Because we have no clue about the first draw (usually) we have elected to show the fully drawn payment which also prevents having to check yes on your payment can change.
Right, wrong, or indifferent...no one can say it's not worst case.
My follow-up answer (from two HUD reps... yup, Gina is moving into Judy's territory here
) "The amount for the initial monthly payment is whatever amount if due at the first payment and does not take into account any conditional features such as a draw. " and "In that case, please use N/A."Both of these answers, while I suppose technically correct, are pretty boneheaded to us.
We have decided to do what Joker is doing as well... far more accurate in our opinion.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/27/10 08:59 PM
before it's over, us banker's will end up training the examiner's AND HUD on this.
Posted By: M Cockrell
Re: RESPA changes 1-1-10 - 01/27/10 09:00 PM
We can finally train them the "right" way!
Can we sign members of Congress up?
Can we sign members of Congress up?
Posted By: Princess Romeo
Re: RESPA changes 1-1-10 - 01/27/10 10:13 PM
Originally Posted By: David Dickinson
Correct. You'll owe them the difference between these fee (and any others that go over and 10% of the total of the GFE fees in the "10% bucket".
HOWEVER(comma), if you provided a List of Service Providers and allowed the borrower to "shop" and a different Title Company was selected, then your in the "no limit" bucket.
Another reason to provide a List of Service Providers and limit your list to one provider per service.
Posted By: SaaL
Re: RESPA changes 1-1-10 - 01/27/10 10:33 PM
Originally Posted By: Just Jay
Originally Posted By: RR joker
Originally Posted By: SaaL
Thanks so much for yuo help - that's what I was afraid of. My GFE is due out today so i'm just going to take my best shot...
Because we have no clue about the first draw (usually) we have elected to show the fully drawn payment which also prevents having to check yes on your payment can change.
Right, wrong, or indifferent...no one can say it's not worst case.
My follow-up answer (from two HUD reps... yup, Gina is moving into Judy's territory here
) "The amount for the initial monthly payment is whatever amount if due at the first payment and does not take into account any conditional features such as a draw. " and "In that case, please use N/A."Both of these answers, while I suppose technically correct, are pretty boneheaded to us.
We have decided to do what Joker is doing as well... far more accurate in our opinion.
I submitted my question to HUD and proposed the solution exactly as I did in my post above. Miraculously, I already received a reply - here's what they said:
"You could use a worst case scenario, as you describe. Also, please remember to disclose that the loan has a balloon payment after 15 years. Thank you."
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/27/10 11:27 PM
Originally Posted By: RR joker
before it's over, us banker's will end up training the examiner's AND HUD on this.
That's already begun. I've had many local examiners call me asking for instructions and opinions. Probably one every 2 days.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 01/28/10 03:08 AM
Quote:
My contact at HUD told me that if the seller "typically pays" the fees in the market in question, then no - they are not on the GFE. We have various states we are working with, and we are only disclosing the fees that are "typically" paid by the borrower.
Quote:
We are going with "typical" on everything but transfer taxes if not state-specifically required by seller, and of course, owner's title insurance on purchases.
Can anyone point me in the right direction for a correct accurate reasonable whatever, we just need an answer? We had a debate with a title company today about transfer taxes. The transfer taxes must be listed on the GFE. It is “typical” for the seller to pay for the transfer taxes but not a state or local law. They listed the transfer taxes in the seller column of the HUD. We asked them to move it to the borrower side and give a buyer/seller credit. They didn’t want to do that because 1) it was a seller cost and 2) because the training they attended said it must be listed on the seller side. I have read the guide and the FAQ and am still struggling with what to do. This is what we sent them from the FAQ. We said because we disclosed it on the borrower’s GFE (which is required, we can’t not do it!), it must be done…..
2) Q: If the seller has agreed to pay charges that were disclosed on the borrower‘s GFE, how are these charges listed on the HUD-1?
A: The charge for any service which is disclosed on the borrower‘s GFE is listed in the borrower‘s column on the HUD-1. The amount charged to the borrower is offset by a credit in that amount in Lines 204-209 and by a charge to the seller in that amount in Lines 506-509 on page 1 of the HUD-1.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/28/10 03:31 AM
I had an exchange of emails with HUD on this issue. Here's my analysis:
Whether it is typical or not, if the borrower COULD pay transfer taxes, they want it listed. IOW, they want a worse case scenario for a GFE. Unless State law requires the seller to pay the transfer taxes, you should list them.
If you list it on the GFE, it MUST be listed on the HUD-1 as a borrower fee and then you list a credit in the 200s.
Whether it is typical or not, if the borrower COULD pay transfer taxes, they want it listed. IOW, they want a worse case scenario for a GFE. Unless State law requires the seller to pay the transfer taxes, you should list them.
If you list it on the GFE, it MUST be listed on the HUD-1 as a borrower fee and then you list a credit in the 200s.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 01/28/10 03:54 AM
Exactly, now how do we get the title company to understand the reg. We "typically" do our own closings, aren't they required to complete the HUD like we are? Or at least to complete it the way we request (unless it's not legal of course).
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/28/10 04:02 AM
Good question. They are responsible to know the law if they are in this industry. Unfortunately, HUD says "the lender is responsible". They should complete them correctly. Tough battle.
Posted By: Kathleen O. Blanchard
Re: RESPA changes 1-1-10 - 01/28/10 05:09 AM
This is where a good post close review process can help. Track vendor (attorney, title company, etc.) errors, review with them, drop them if they do not improve. Provide your requirements up front of course.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 01/28/10 12:10 PM
Easier said than done. We own a 49% share in the TC.
Posted By: Bville
Re: RESPA changes 1-1-10 - 01/28/10 01:39 PM
An appraisal comes back saying the roof needs to be repaired and the appraiser needs to do a follow-up inspection. The bank won't make the loan unless the roof is repaired. My lenders say sometimes the borrower actually pays to have the roof repaired before they even own the house. They want to give a revised GFE to include the roof repair, but they can't get bids back in 3 days from the time they know of the changed circumstance and therefore don't know how much to put on the GFE.
Can the repair be left off the GFE because it's not a settlement cost?
But, if the repair is financed as part of the loan, it would have to be included.
Any suggestions? I think they're going to have to just make a wild guess and cross their fingers hoping they're close to correct.
Can the repair be left off the GFE because it's not a settlement cost?
But, if the repair is financed as part of the loan, it would have to be included.
Any suggestions? I think they're going to have to just make a wild guess and cross their fingers hoping they're close to correct.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/28/10 01:53 PM
Bville, I believe the cursed common sense approach may work here. You know what's needed and it may affect the loan amount, which in turn affects fees.
Have whomever get the estimates and then start your clock from that point. With good documentation, I don't see any other good way to handle that issue.
Have whomever get the estimates and then start your clock from that point. With good documentation, I don't see any other good way to handle that issue.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/28/10 02:41 PM
Another good example of real world vs "HUD world" Bville. I agree with Joker, but I bet it's going to be challenged by examiners.
Posted By: DoorKey
Re: RESPA changes 1-1-10 - 01/28/10 02:47 PM
Has the new RESPA changes taken away our ability to provide customer service? Here's my issue: We allow the applicant to shop for title insurance. We provide a list of one provider. We tell the applicant that he may shop for this service. Applicant would like to find better prices, but has no idea who to call or what to ask for. Can we provide some customer service here and tell the applicant the names of other providers? Can we help the applicant by calling other providers for him and asking the questions for him, even in his presence? OR must we simply say "You're on your own here buddy"? If we do provide this service, have we now moved the provider that is off our list onto our list?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/28/10 02:54 PM
If you're willing to provide other names of providers, why wouldn't you put them on your list? That's what the "list" is all about - providing good customer service for something they have no clue about.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/28/10 03:14 PM
As usual, I agree with David, here. We have numerous closer's on our lists in each market. I don't agree with limiting the list just for the sake of avoiding a tolerance issue. Customer service as well as not "black-listing" any of our approved attorneys is way more important, IMHO.
Posted By: DoorKey
Re: RESPA changes 1-1-10 - 01/28/10 03:58 PM
I understand the reasons for having one or more than one provider on a list. However, if the bank has elected to stay with only one, then will any assistance by us to help the applicant find a different provider put us in the position of having the provider considered "on the list" and thus subject to the 10% tolerance?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/28/10 04:05 PM
I would think not. I also think assisting them doesn't make it so, either!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/28/10 04:10 PM
I agree that assisting them doesn't make it 10% tolerance.
My point is it sounds like you want to have your cake and eat it too. You say "the bank has elected to stay with only one" yet you also say you want to give them info on other providers. Sounds like you aren't following your bank's policy on this. If you want to give them info on other providers, RESPA says to put that info on a list.
My point is it sounds like you want to have your cake and eat it too. You say "the bank has elected to stay with only one" yet you also say you want to give them info on other providers. Sounds like you aren't following your bank's policy on this. If you want to give them info on other providers, RESPA says to put that info on a list.
Posted By: Pounder
Re: RESPA changes 1-1-10 - 01/28/10 04:56 PM
Closed our first loan under new rules. Found out 2 days after closing that we collected too much for escrow. Since this is a "Charge that can change", can we just reimburse the borrower and memo the file without doing a new settlement statement?
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 01/28/10 05:30 PM
Question, If you quote an appraisal fee on the GFE, but Fannie comes back and says, they approve without an appraisal, so you don't order one. Do we send a new GFE w/o the appraisal fee or should we leave it on there and enjoy the cushion on the tolerance bucket?
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 01/28/10 05:45 PM
Originally Posted By: DD Regs
Question, If you quote an appraisal fee on the GFE, but Fannie comes back and says, they approve without an appraisal, so you don't order one. Do we send a new GFE w/o the appraisal fee or should we leave it on there and enjoy the cushion on the tolerance bucket?
We've already had this happen. In our case, we considered it a changed circumstance, sent out a new GFE with the appraisal fee removed and increased Block 1 by the $75 fee. Hope we did the right thing!
Posted By: Bullseye
Re: RESPA changes 1-1-10 - 01/28/10 05:52 PM
Just in case you have one hair left you'd like to pull out :
Line 904/905 like it did before. You can find all of these answers in Appendix A.
Q: (asked 12/1) I would like to hear from you your organization’s recommendation on where to put premiums for optional credit life and accident and health insurance on the settlement statement. I am getting mixed information – some saying it goes in the 900 series and others stating it goes in the 1300 series since it is optional and not disclosed on the GFE. What are HUD’s expectations?
A: (rec'd 1/28) Please refer to Federal Reserve Board in Regulation Z regarding credit life. This is optional to the buyer and not a requirement of the loan it goes in the 1300 series.
:Originally Posted By: David Dickinson
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.
Q: (asked 12/1) I would like to hear from you your organization’s recommendation on where to put premiums for optional credit life and accident and health insurance on the settlement statement. I am getting mixed information – some saying it goes in the 900 series and others stating it goes in the 1300 series since it is optional and not disclosed on the GFE. What are HUD’s expectations?
A: (rec'd 1/28) Please refer to Federal Reserve Board in Regulation Z regarding credit life. This is optional to the buyer and not a requirement of the loan it goes in the 1300 series.
Posted By: RobinB
Re: RESPA changes 1-1-10 - 01/28/10 05:52 PM
Originally Posted By: Princess Rooney
Originally Posted By: David Dickinson
Correct. You'll owe them the difference between these fee (and any others that go over and 10% of the total of the GFE fees in the "10% bucket".
HOWEVER(comma), if you provided a List of Service Providers and allowed the borrower to "shop" and a different Title Company was selected, then your in the "no limit" bucket.
Another reason to provide a List of Service Providers and limit your list to one provider per service.
When preparing a new GFE, we have to contact the title company they choose (if not ours) for their numbers. What if we send out the GFE and borrower then picks a different title company?
Is this a changed circumstance?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/28/10 05:57 PM
Originally Posted By: Pounder
Closed our first loan under new rules. Found out 2 days after closing that we collected too much for escrow. Since this is a "Charge that can change", can we just reimburse the borrower and memo the file without doing a new settlement statement?
Good question. There's no guidance for things found out after closing. I think HUD would say you should issue an amended Settlement Statement and send it with the check. Just my opinion.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/28/10 05:59 PM
Originally Posted By: respa queen
Originally Posted By: DD Regs
Question, If you quote an appraisal fee on the GFE, but Fannie comes back and says, they approve without an appraisal, so you don't order one. Do we send a new GFE w/o the appraisal fee or should we leave it on there and enjoy the cushion on the tolerance bucket?
We've already had this happen. In our case, we considered it a changed circumstance, sent out a new GFE with the appraisal fee removed and increased Block 1 by the $75 fee. Hope we did the right thing!
I would NOT issue a new GFE. Why lower the total of your tolerance bucket? You don't have to issue a new GFE even when there is a changed circumstance. The point is the borrower is wiling to do the loan at $X. If the final costs are lower than $X, they would be willing to close, wouldn't they? By lowering your 10% tolerance bucket total, you're cutting your throat on other overruns.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/28/10 06:16 PM
Not only that, but that wouldn't be a reason to increase Block 1. If you did opt to redisclose, probably all you could do is increase Block 2.
I still have a problem with this type block 2 stuff because it really has zero to do with costs for the "specific interest rate chosen", but it's the only solution HUD has offered.
I still have a problem with this type block 2 stuff because it really has zero to do with costs for the "specific interest rate chosen", but it's the only solution HUD has offered.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/28/10 06:24 PM
Originally Posted By: Bullseye
Just in case you have one hair left you'd like to pull out :
Line 904/905 like it did before. You can find all of these answers in Appendix A.
Q: (asked 12/1) I would like to hear from you your organization’s recommendation on where to put premiums for optional credit life and accident and health insurance on the settlement statement. I am getting mixed information – some saying it goes in the 900 series and others stating it goes in the 1300 series since it is optional and not disclosed on the GFE. What are HUD’s expectations?
A: (rec'd 1/28) Please refer to Federal Reserve Board in Regulation Z regarding credit life. This is optional to the buyer and not a requirement of the loan it goes in the 1300 series.
:Originally Posted By: David Dickinson
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.
Q: (asked 12/1) I would like to hear from you your organization’s recommendation on where to put premiums for optional credit life and accident and health insurance on the settlement statement. I am getting mixed information – some saying it goes in the 900 series and others stating it goes in the 1300 series since it is optional and not disclosed on the GFE. What are HUD’s expectations?
A: (rec'd 1/28) Please refer to Federal Reserve Board in Regulation Z regarding credit life. This is optional to the buyer and not a requirement of the loan it goes in the 1300 series.
According to page 68245 of the FR, I would say they are wrong and that it goes in the 900 series. Also note...if it's for the LOL, that should be noted as well.
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 01/28/10 06:41 PM
Originally Posted By: RR joker
Not only that, but that wouldn't be a reason to increase Block 1. If you did opt to redisclose, probably all you could do is increase Block 2.
I still have a problem with this type block 2 stuff because it really has zero to do with costs for the "specific interest rate chosen", but it's the only solution HUD has offered.
I still have a problem with this type block 2 stuff because it really has zero to do with costs for the "specific interest rate chosen", but it's the only solution HUD has offered.
I understand what you're saying and I'm not disagreeing - but here is my thought process -
The Fannie appraisal waiver fee is an administrative cost of making the loan (GFE Block 1 Q2 p.23 - all loan originator charges including processing, application, administration fees, underwriting...yadda yadda yadda". It is not an appraisal fee - we won't get an appraisal. Because it's not a point or charge, I'm not sure I could put it in Block 2.
So while I've already had to stronghold people into not updating the appraised value when the invoice comes in lower, I'm concerned about the results of an audit when the examiners come in.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/28/10 07:31 PM
I don't know the answer RQ...I just know they've held their feet to the fire on Block 1 and that isn't a program or loan amount change, and if it was, it's not based on a percentage.
Posted By: Reed
Re: RESPA changes 1-1-10 - 01/28/10 09:57 PM
Maybe a dumb question, but...
For Freddie loans we have the borrower fill out an IRS form 4506 but we don't collect the filing fee or send it out unless it is selected for quality control. The filing fee doesn't have to be listed on the GFE/HUD does it?
For Freddie loans we have the borrower fill out an IRS form 4506 but we don't collect the filing fee or send it out unless it is selected for quality control. The filing fee doesn't have to be listed on the GFE/HUD does it?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/29/10 12:41 AM
Isn't this a fee your bank would be paying after the closing IF the loan was chosen to QC? Were you paying the fee pre-1/1/10? We do a second appraisal on certain loans chosen by the auditor and pay for it. It is never considered a part of the loan. Seems to me this is the same type of thing for you.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 01/29/10 12:47 AM
respa queen, your question sent me to my underwriter to talk this one out. Seems we run the DU as part of pulling the cbr so we'll know if the loan qualifies for the appraisal waiver fee before preparing the GFE. Then we can include the $75 in the Block 1 origination fee.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 01/29/10 02:49 AM
Originally Posted By: David Dickinson
Originally Posted By: Pounder
Closed our first loan under new rules. Found out 2 days after closing that we collected too much for escrow. Since this is a "Charge that can change", can we just reimburse the borrower and memo the file without doing a new settlement statement?
Good question. There's no guidance for things found out after closing. I think HUD would say you should issue an amended Settlement Statement and send it with the check. Just my opinion.
Not sure if what we doing is correct but when we do our post closing review and find that the intital escrow account disclosure is incorrect, we prepare a new statement and send them a letter explaining our error. If we collected too much, we send them a check, if we did not collect enough, we give them the option of spreading the shortage over the next 12 months or paying the amount in full. This has been our policy and procedure for at least 10 years.
Posted By: Goodnews
Re: RESPA changes 1-1-10 - 01/29/10 01:46 PM
How is everyone handling P.O.C. items? One publication says not to use P.O.C. and another says it's ok. Our problem - We charge everyone a $400 application fee up front. It is included in line 801 of our GFE "Origination Charges" with other fees too, which total $650. When we get to closing, they have already paid the $400, so they only owe us $250. How do we show the $400 credit? One attorney told us to put it on page 1 of the HUD under line 215 as a credit. Any ideas?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/29/10 02:52 PM
Originally Posted By: Goodnews
How is everyone handling P.O.C. items? One publication says not to use P.O.C. and another says it's ok. Our problem - We charge everyone a $400 application fee up front. It is included in line 801 of our GFE "Origination Charges" with other fees too, which total $650. When we get to closing, they have already paid the $400, so they only owe us $250. How do we show the $400 credit? One attorney told us to put it on page 1 of the HUD under line 215 as a credit. Any ideas?
You can't put POC on lines 801-803. I agree with the attorney. Put the $400 deposit in the 200s. It will offset against the fees from page 2.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 01/29/10 02:53 PM
Goodnews...POC isn't allowed on the GFE, but is allowed on the HUD. The way your attorney suggests should work fine...show the total charge, and then the portion they already paid in the credit. Look at the section 200 language "amounts paid BY or in behalf of borrowers.
Since it's a non-itemized item, that will be your best, or really only bet, IMO because it's a part of the total origination charge.
Since it's a non-itemized item, that will be your best, or really only bet, IMO because it's a part of the total origination charge.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 01/29/10 05:00 PM
NEW FAQ just posted. Going thorugh it now. I don't like this one though.
33) Q: Can loan originators request verification documents or charge fees prior to issuing a prequalification or preapproval?
A: No. In order to prevent over burdensome documentation demands on mortgage applicants, and to facilitate shopping by borrowers, the final rule specifically prohibits the loan originator from requiring an applicant, as a condition for providing a GFE, to submit supplemental documentation to verify the information provided by the applicant on the application. Loan originators, however, can require applicants to provide such verification information after the GFE has been provided, in order to complete final underwriting. In addition, the rule does not bar a loan originator from using its own sources before issuing a GFE to independently verify the information provided by the applicant.
Similarly, HUD has long supported a public policy goal of creating a circumstance where consumers can shop for a mortgage loan among loan originators without paying significant upfront fees that impede shopping. To this end, and consistent with the Federal Reserve Board’s recently issued revised regulations limiting the fees that a consumer may be charged for the delivery of TILA disclosures, loan originators may not charge consumers anything more than the cost of a credit report prior to issuing a GFE.
33) Q: Can loan originators request verification documents or charge fees prior to issuing a prequalification or preapproval?
A: No. In order to prevent over burdensome documentation demands on mortgage applicants, and to facilitate shopping by borrowers, the final rule specifically prohibits the loan originator from requiring an applicant, as a condition for providing a GFE, to submit supplemental documentation to verify the information provided by the applicant on the application. Loan originators, however, can require applicants to provide such verification information after the GFE has been provided, in order to complete final underwriting. In addition, the rule does not bar a loan originator from using its own sources before issuing a GFE to independently verify the information provided by the applicant.
Similarly, HUD has long supported a public policy goal of creating a circumstance where consumers can shop for a mortgage loan among loan originators without paying significant upfront fees that impede shopping. To this end, and consistent with the Federal Reserve Board’s recently issued revised regulations limiting the fees that a consumer may be charged for the delivery of TILA disclosures, loan originators may not charge consumers anything more than the cost of a credit report prior to issuing a GFE.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/29/10 05:38 PM
That's what I was telling everyone. I don't agree with it technically, but that's certainly what HUD was saying.
Posted By: Pounder
Re: RESPA changes 1-1-10 - 01/29/10 06:47 PM
If we do not have any charges in blocks 1-3 (Origination charges)of the GFE we are putting "$0" on the GFE. My question is about the comparision chart on the HUD1 page 3. I thought we would list "$0" in this section of the chart. Our loan doc processors say that we do not have to put anything on page 3 of the HUD1 since we did not have a charge. That part of the comparision should be left blank. Any opinions?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/29/10 07:01 PM
I don't think there's any guidance for your situation.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 01/29/10 07:17 PM
OK, having a loan system problem and I am trying to find a work around. We have a 2nd mortgage (Closed End Home Equity) that we advertise as only costing say $500. We issue a GFE showing that it will only be $500.
We quoted on the GFE (Numbers are not actual just for illustrative purposes)
Appraisal $300
Title $100
Recording $100
The actual numbers came in at:
Appraisal $400
Title $200
Recording $125
Since this is done on a HUD1a, do we make the adjustment for each of these as follows:
Appraisal adjusted for tolerence on line 809 showing $100 POC L
Title adjusted for tolerence Line 1109 showing $100 POC L
Recording Fee adjusted for tolerence line 1207 showing $25 POC L
The probelm I am having is the laser Pro will not print line 1109 or 1207. Could I just give a credit on line 802 and then show the actual cost for each item so that it nets out as $500 in the end.
Sorry for the long question.
We quoted on the GFE (Numbers are not actual just for illustrative purposes)
Appraisal $300
Title $100
Recording $100
The actual numbers came in at:
Appraisal $400
Title $200
Recording $125
Since this is done on a HUD1a, do we make the adjustment for each of these as follows:
Appraisal adjusted for tolerence on line 809 showing $100 POC L
Title adjusted for tolerence Line 1109 showing $100 POC L
Recording Fee adjusted for tolerence line 1207 showing $25 POC L
The probelm I am having is the laser Pro will not print line 1109 or 1207. Could I just give a credit on line 802 and then show the actual cost for each item so that it nets out as $500 in the end.
Sorry for the long question.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/29/10 07:22 PM
You could do a HUD-1 and put each credit in the 200s.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 01/29/10 07:27 PM
That was my other thought, just trying to fiugre out how to use the HUD 1a.
But could I do like a "No Cost Loan" and give them credit in line 802 if Laser pro can't fix theother lines?
The only thing I don't like about that (Line 802) solution is the GFE said one thing, the HUD will say another for as each item, but the net answer is the same $500. Should I give a corrected GFE at closing that explains the credit in Box 2 in the GFE that will relate to the credit in line 802 HUD.
But could I do like a "No Cost Loan" and give them credit in line 802 if Laser pro can't fix theother lines?
The only thing I don't like about that (Line 802) solution is the GFE said one thing, the HUD will say another for as each item, but the net answer is the same $500. Should I give a corrected GFE at closing that explains the credit in Box 2 in the GFE that will relate to the credit in line 802 HUD.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 01/29/10 07:37 PM
Quote:
The only thing I don't like about that (Line 802) solution is the GFE said one thing, the HUD will say another for as each item, but the net answer is the same $500. Should I give a corrected GFE at closing that explains the credit in Box 2 in the GFE that will relate to the credit in line 802 HUD.
I have the same concern about the GFE and HUD not matching. That's why I suggested a HUD-1.
I don't think you have a changed circumstance. Therefore, you can't issue a new GFE at closing - even though nothings really changing.
Posted By: RUKiddingMe
Re: RESPA changes 1-1-10 - 01/29/10 07:42 PM
DDRegs - I know that this is contrary to what the general consensus thinks, but to me, there is no harm to the borrower by showing the credit in the 800 series of the HUD 1A vs. pg 1 of a HUD 1. In either situation it can be clearly labled as a Tolerance Cure. We are currently showing the multiple POC(L) entries as you suggest on the HUD 1A...we desparately don't want to use a HUD 1 for these types of situations!
Posted By: CSB98
Re: RESPA changes 1-1-10 - 02/01/10 04:30 PM
We are refinancing a 1st REM through Freddie. Customer has 2nd REM at another financial institution. We will need to get that subordinated. We have already issued the GFE, come to find out that the other FI is charging a $50 fee to "research" whether or not they will issue the subordination. If we have to reissue a new GFE, where would this go?
Posted By: PhantomSage
Re: RESPA changes 1-1-10 - 02/01/10 05:52 PM
If you DO have a "changed circumstance" and such changed circumstance affects tolearance that you have to push closing back for MDIA, do you also have to encompass a new 10-day shopping period? (not saying that they must be hand-in-hand)
Has this been asked before?
Has this been asked before?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/01/10 06:00 PM
According to the newest Q&A...once intent has been expressed, you maintain the original 10-day date on future GFE's.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 02/01/10 06:33 PM
CSB1, Based on 2) under changed circumstances, I think you could successfully argue that this would be a changed circumstance and I'd put the fee in Block 3...they can't shop for it. You're going to have to add the recording fee for the subordination to Block 7 too.
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 02/01/10 06:37 PM
Playing devils advocate - sounds like CSB1 knew there was a 2nd to be subordinated, thus should have anticicapted a subordination fee. IMO that would not be a changed circumstance. Just another opinion.
Posted By: CSB98
Re: RESPA changes 1-1-10 - 02/01/10 08:39 PM
Old School . . . this fee has never been charged in the past. I suspect it's another way to generate some revenue and has recently been implemented.
Also, 90% of our applications are completed through MortgageBot and the GFE is automatically given based on the information input. We have no way at that time to determine whether there is a junior lien on the property. We probably should address this issue, though for future reference.
Also, 90% of our applications are completed through MortgageBot and the GFE is automatically given based on the information input. We have no way at that time to determine whether there is a junior lien on the property. We probably should address this issue, though for future reference.
Posted By: Em
Re: RESPA changes 1-1-10 - 02/02/10 02:28 PM
I know the discussion has been brought up, but am still confused.
We charge a set dollar amount for construction inspections done by an appraiser upfront at time of closing. Where does this go on the HUD? We are not completing the inspection, so i have a problem lumping them with origination charges? Any insight...
We charge a set dollar amount for construction inspections done by an appraiser upfront at time of closing. Where does this go on the HUD? We are not completing the inspection, so i have a problem lumping them with origination charges? Any insight...
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/02/10 02:36 PM
Required inspections being done by a 3rd party. Ours go in the 800 section of the HUD, just like the appraisal and flood cert, for instance.
Posted By: stella
Re: RESPA changes 1-1-10 - 02/02/10 04:14 PM
juust when I thought I was out of questions...a couple more...
1. On page 3 of the HUD is there any requirement that the closing fee and title insurance fee be seperated? or can they be shown in one lump sum?
2. How do you calculate the tolerance on page 3 of the GFE?...I have diffent title companies doing it different ways...some take the difference between the GFE and the actual HUD charges and divide that number into the amount on the GFE and I have some that divide that number into the amount on the HUD.
3. We issue a GFE on a preapproval and it expires within 10 business days. If the borrower converts to an actual application before the expiration of the GFE are we allowed to issue a new GFE...we do not have a property when we issue our preapproval GFE so there are may factors that can change including loan amount, purchase price, etc. that make our preapproval GFE way off.
Thanks!
1. On page 3 of the HUD is there any requirement that the closing fee and title insurance fee be seperated? or can they be shown in one lump sum?
2. How do you calculate the tolerance on page 3 of the GFE?...I have diffent title companies doing it different ways...some take the difference between the GFE and the actual HUD charges and divide that number into the amount on the GFE and I have some that divide that number into the amount on the HUD.
3. We issue a GFE on a preapproval and it expires within 10 business days. If the borrower converts to an actual application before the expiration of the GFE are we allowed to issue a new GFE...we do not have a property when we issue our preapproval GFE so there are may factors that can change including loan amount, purchase price, etc. that make our preapproval GFE way off.
Thanks!
Posted By: ahou
Re: RESPA changes 1-1-10 - 02/02/10 04:19 PM
For the comparison chart, our software is putting a negative amount and negative percentage in the line "Increase between GFE and HUD-1 Charges" for the 10% category when the HUD-1 total is less than the GFE. It looks so weird. Is anyone else's software doing this?
Posted By: Comply Wren
Re: RESPA changes 1-1-10 - 02/02/10 06:34 PM
1. I believe in general these should be shown as a lump sum. However, if your state requires it, you can itemize. They address it in the FAQ's
2. The tolerance is a percentage above what was disclosed on the GFE. To me that means that you should be dividing by the amount from the GFE.
3. This issue has been debated not only in this thread but several others. In addition to making sure you have documented adequate changed circumstances, you can only change those items on the GFE impacted by the change. IMO, too risky on a preapproval. We have elected to save the GFE until we have a full application as defined in RESPA, and developed a "closing cost estimate sheet" to give to our preapproval applicants.
2. The tolerance is a percentage above what was disclosed on the GFE. To me that means that you should be dividing by the amount from the GFE.
3. This issue has been debated not only in this thread but several others. In addition to making sure you have documented adequate changed circumstances, you can only change those items on the GFE impacted by the change. IMO, too risky on a preapproval. We have elected to save the GFE until we have a full application as defined in RESPA, and developed a "closing cost estimate sheet" to give to our preapproval applicants.
Posted By: mmason
Re: RESPA changes 1-1-10 - 02/02/10 09:14 PM
Apparently I did not understand how POCs would affect the comparison chart on the HUD, at least when it's a POC that the customer is not paying. Here are a couple of scenerios we've run into:
1. The GFE for a home equity loan disclosed an amount for a limited appraisal. During processing, we determined we were able to use a full appraisal from a recent mortgage instead of ordering a new one. On the comparison chart it will show $75 more on the HUD even though the customer isn't paying anything. This is out-of-tolerance so we would have to reimburse. The alternative is to order a limited appraisal and charge the customer.
2. Loan officer did GFEs for both a mortgage and home equity loan at same time. He disclosed the heloan fees as typical fees. We actually used the same appraisal, title, credit, etc, but they all cost more for the mortgage. So the comparison chart for the heloan will result in a large reimbursement.
Reimbursements in either of these cases make no sense at all. Am I misunderstanding something, or will we really have to double order everything to keep the costs for the heloan in line with what we disclosed?
Help:(
1. The GFE for a home equity loan disclosed an amount for a limited appraisal. During processing, we determined we were able to use a full appraisal from a recent mortgage instead of ordering a new one. On the comparison chart it will show $75 more on the HUD even though the customer isn't paying anything. This is out-of-tolerance so we would have to reimburse. The alternative is to order a limited appraisal and charge the customer.
2. Loan officer did GFEs for both a mortgage and home equity loan at same time. He disclosed the heloan fees as typical fees. We actually used the same appraisal, title, credit, etc, but they all cost more for the mortgage. So the comparison chart for the heloan will result in a large reimbursement.
Reimbursements in either of these cases make no sense at all. Am I misunderstanding something, or will we really have to double order everything to keep the costs for the heloan in line with what we disclosed?
Help:(
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/02/10 09:22 PM
1)Why will it show $75.00 more? YOu didn't have to order the limited and used an older appraisal that really isn't costing and won't be reflected on the HUD. It should be less.
2) I think you are misunderstanding, m&m.
2) I think you are misunderstanding, m&m.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 02/02/10 10:40 PM
Arrrghhh... seller paid OTI: borrowers or sellers column?
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 02/02/10 11:18 PM
Originally Posted By: Just Jay
Arrrghhh... seller paid OTI: borrowers or sellers column?
Put the charge in the borrower's column on line 1103 of the HUD-1 then show a credit in the 204 - 209 series and then a charge in the 506 - 509 series. The following is from page 42 of 57 of the 1/28/10 FAQs.
HUD-1 – Seller-paid items
1) Q: What if at closing the seller is paying for a settlement service that was listed on the GFE, such as the Owner‘s title insurance policy? How is this shown on the HUD-1?
A: If the seller is paying for a service that was on the GFE, such as Owner‘s title insurance, the charge remains in the borrower‘s column on the HUD-1. A credit from the seller to the borrower to offset the charge should be listed on the first page of the HUD-1 in Lines 204-209 and Lines 506-509 respectively.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 02/02/10 11:56 PM
Beautiful! I totally agree!!!!
Now can you tell me why my local title companies, as well as our LOS are telling us, they don't have to and won't?
Anyone having issues with your HUD line 603 now as a result of this guidance?
Now can you tell me why my local title companies, as well as our LOS are telling us, they don't have to and won't?
Anyone having issues with your HUD line 603 now as a result of this guidance?
Posted By: ahou
Re: RESPA changes 1-1-10 - 02/03/10 01:40 PM
The Q & A states to show the cure in the comparison table. Exactly how do you do that?
Q: May a credit for a tolerance cure be listed on page 1 of the HUD-1?
A: The cure for a potential tolerance violation may be listed as a credit to the borrower on page 1 of the HUD-1 with a description of the service(s) the credit is applied to. If the tolerance cure is applied to the overall tolerance category ―Charges That in Total Cannot Increase More Than 10%, the tolerance cure credit may be listed as a lump sum amount on a blank line in Lines 204 thru 209 with a description of the tolerance category cure. The comparison chart on page 3 of the HUD-1 should reflect the credit given for that service to cure the potential tolerance violation in the appropriate tolerance category.
Q: May a credit for a tolerance cure be listed on page 1 of the HUD-1?
A: The cure for a potential tolerance violation may be listed as a credit to the borrower on page 1 of the HUD-1 with a description of the service(s) the credit is applied to. If the tolerance cure is applied to the overall tolerance category ―Charges That in Total Cannot Increase More Than 10%, the tolerance cure credit may be listed as a lump sum amount on a blank line in Lines 204 thru 209 with a description of the tolerance category cure. The comparison chart on page 3 of the HUD-1 should reflect the credit given for that service to cure the potential tolerance violation in the appropriate tolerance category.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/03/10 01:42 PM
Send them the goods, JJ. It's becoming very obvious, every day, that the title companies/attorneys have NOT put the time into this that we have.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/03/10 01:44 PM
Originally Posted By: ahou
The Q & A states to show the cure in the comparison table. Exactly how do you do that?
Q: May a credit for a tolerance cure be listed on page 1 of the HUD-1?
A: The cure for a potential tolerance violation may be listed as a credit to the borrower on page 1 of the HUD-1 with a description of the service(s) the credit is applied to. If the tolerance cure is applied to the overall tolerance category ―Charges That in Total Cannot Increase More Than 10%, the tolerance cure credit may be listed as a lump sum amount on a blank line in Lines 204 thru 209 with a description of the tolerance category cure. The comparison chart on page 3 of the HUD-1 should reflect the credit given for that service to cure the potential tolerance violation in the appropriate tolerance category.
Q: May a credit for a tolerance cure be listed on page 1 of the HUD-1?
A: The cure for a potential tolerance violation may be listed as a credit to the borrower on page 1 of the HUD-1 with a description of the service(s) the credit is applied to. If the tolerance cure is applied to the overall tolerance category ―Charges That in Total Cannot Increase More Than 10%, the tolerance cure credit may be listed as a lump sum amount on a blank line in Lines 204 thru 209 with a description of the tolerance category cure. The comparison chart on page 3 of the HUD-1 should reflect the credit given for that service to cure the potential tolerance violation in the appropriate tolerance category.
My guess would be to use the net (charge minus credit) and put that in so the totals will now be under 10%.
Posted By: ahou
Re: RESPA changes 1-1-10 - 02/03/10 04:54 PM
Loan closes. A recording fee comes in for $25. We can't collect more from the customer after closing. So we'd pay it. But what if the expected cost on the HUD was listed as $35 and we get the actual bill after closing and it is only $25.
We have to refund the $10 difference don't we, vs correcting the comparison chart to see if we are out 10%?
We have to refund the $10 difference don't we, vs correcting the comparison chart to see if we are out 10%?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/03/10 04:56 PM
I would rather refund the difference considering upcharging is a no-no!
Posted By: mmason
Re: RESPA changes 1-1-10 - 02/03/10 07:04 PM
Originally Posted By: RR joker
1)Why will it show $75.00 more? YOu didn't have to order the limited and used an older appraisal that really isn't costing and won't be reflected on the HUD. It should be less.
2) I think you are misunderstanding, m&m.
2) I think you are misunderstanding, m&m.
I hope you are right, but let me give an example. On the GFE we disclosed $350 assuming a limited appraisal. We then determined we could use the appraisal from the mtg which cost $425. The way our consultants explained it to me this week is that we must show the $425 as a POC on the HUD which must be carried forward to the comparison chart even though it is not being paid with this loan. IF we do that, it will result in a $75 overage.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/03/10 07:07 PM
Actually, and David or Dan or somebody correct me if I'm running on overload today, but although you show those "ghost" fees on the GFE, if there really is no charge on the HUD, it will reflect that fact, not POC.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 02/04/10 02:17 AM
Originally Posted By: RR joker
Send them the goods, JJ. It's becoming very obvious, every day, that the title companies/attorneys have NOT put the time into this that we have.
And my sales manager is getting all mad at me because I refuse to go to a RESPA symposium sponsered and put on by a local title company next week, because we will look 'snotty' if we don't send our compliance people.
grrrr....
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 02/04/10 03:20 AM
Originally Posted By: RR joker
I would rather refund the difference considering upcharging is a no-no!
However, according to HUD you can disclose your GFE with worse case scenerio pricing. For instance we are listing our appraisals at $350.00. Due to HVCC the lender doesn't know which appraiser will get the order, therefore we disclosure the fee of the highest appraiser.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 02/04/10 03:48 AM
Originally Posted By: Reads Regs
Originally Posted By: Just Jay
Arrrghhh... seller paid OTI: borrowers or sellers column?
Put the charge in the borrower's column on line 1103 of the HUD-1 then show a credit in the 204 - 209 series and then a charge in the 506 - 509 series. The following is from page 42 of 57 of the 1/28/10 FAQs.
HUD-1 – Seller-paid items
1) Q: What if at closing the seller is paying for a settlement service that was listed on the GFE, such as the Owner‘s title insurance policy? How is this shown on the HUD-1?
A: If the seller is paying for a service that was on the GFE, such as Owner‘s title insurance, the charge remains in the borrower‘s column on the HUD-1. A credit from the seller to the borrower to offset the charge should be listed on the first page of the HUD-1 in Lines 204-209 and Lines 506-509 respectively.
Arrrghhh... seller paid transfer taxes: borrowers or sellers column?
I am still waiting for HUD to answer me as to whether this FAQ also applies to transfer taxes.
Posted By: E Street
Re: RESPA changes 1-1-10 - 02/04/10 12:43 PM
Good Morning,
I think Old School is reading too much into the regulation as many of us do. First we must keep in mid that that we are at the mecry of what the applicant tells us. In my opinion even if the tell us that a second is at another institution, how do we know until we contact the other isntitution that a fee is going to be charged. A filing fee yes but a fee to subrdinate ---- who would know. Same thing could be said if another bank charges a payoff fee or requires a overnight mail instead of a wire. We do not know the fees until we contact them. That is why we have Changed Circumstance. To quote my wife -- I am not a mind reader. Neither are we. Let's take a step back and understand the full dynamics of the transaction and when we find out a new fee is going to be charged.
Okay - off my oap box and back to my coffee.
E Street
I think Old School is reading too much into the regulation as many of us do. First we must keep in mid that that we are at the mecry of what the applicant tells us. In my opinion even if the tell us that a second is at another institution, how do we know until we contact the other isntitution that a fee is going to be charged. A filing fee yes but a fee to subrdinate ---- who would know. Same thing could be said if another bank charges a payoff fee or requires a overnight mail instead of a wire. We do not know the fees until we contact them. That is why we have Changed Circumstance. To quote my wife -- I am not a mind reader. Neither are we. Let's take a step back and understand the full dynamics of the transaction and when we find out a new fee is going to be charged.
Okay - off my oap box and back to my coffee.
E Street
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 02/04/10 01:04 PM
Originally Posted By: CSB1
Old School . . . this fee has never been charged in the past. I suspect it's another way to generate some revenue and has recently been implemented.
Also, 90% of our applications are completed through MortgageBot and the GFE is automatically given based on the information input. We have no way at that time to determine whether there is a junior lien on the property. We probably should address this issue, though for future reference.
Also, 90% of our applications are completed through MortgageBot and the GFE is automatically given based on the information input. We have no way at that time to determine whether there is a junior lien on the property. We probably should address this issue, though for future reference.
This is where we truly need HUD to weigh in.
Since we are a Credit Union, we are disclosing any subordination fees that we may charge because it is us that is insisting on the fee.
If it's another lender, the answer becomes a lot muddier. Is it a service that we insist on? (no - all we're insisting on is being in first lien position). Is the fee a part of this transaction? (Nope - the fee affects a loan offered by another lender and 99.99% of the time the transaction is handled completely and utterly outside of closing and is not on the HUD-1).
We've been to more than one seminar where the speaker has taken this position - but well, they're not HUD.
HUD - It's your turn
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 02/04/10 01:05 PM
Originally Posted By: CSB1
Old School . . . this fee has never been charged in the past. I suspect it's another way to generate some revenue and has recently been implemented.
Also, 90% of our applications are completed through MortgageBot and the GFE is automatically given based on the information input. We have no way at that time to determine whether there is a junior lien on the property. We probably should address this issue, though for future reference.
Also, 90% of our applications are completed through MortgageBot and the GFE is automatically given based on the information input. We have no way at that time to determine whether there is a junior lien on the property. We probably should address this issue, though for future reference.
CSB - we are a MBot user as well. I would get with your rep - you can get this information through your application path - if your applicant completes the app right.
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 02/04/10 01:09 PM
Originally Posted By: RR joker
Send them the goods, JJ. It's becoming very obvious, every day, that the title companies/attorneys have NOT put the time into this that we have.
Agreed - we even had a title company tell us yesterday (and I am in fact quoting here) "we're making this up as we go along"
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/04/10 01:26 PM
Originally Posted By: jlroberts
Originally Posted By: Reads Regs
Originally Posted By: Just Jay
Arrrghhh... seller paid OTI: borrowers or sellers column?
Put the charge in the borrower's column on line 1103 of the HUD-1 then show a credit in the 204 - 209 series and then a charge in the 506 - 509 series. The following is from page 42 of 57 of the 1/28/10 FAQs.
HUD-1 – Seller-paid items
1) Q: What if at closing the seller is paying for a settlement service that was listed on the GFE, such as the Owner‘s title insurance policy? How is this shown on the HUD-1?
A: If the seller is paying for a service that was on the GFE, such as Owner‘s title insurance, the charge remains in the borrower‘s column on the HUD-1. A credit from the seller to the borrower to offset the charge should be listed on the first page of the HUD-1 in Lines 204-209 and Lines 506-509 respectively.
Arrrghhh... seller paid transfer taxes: borrowers or sellers column?
I am still waiting for HUD to answer me as to whether this FAQ also applies to transfer taxes.
If it was on your GFE in the borrower's column (because state law doesn't require the seller to pay it), you show it in the borrower's column on the HUD, then 500 and 200 series for seller.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/04/10 01:40 PM
Originally Posted By: jlroberts
Originally Posted By: RR joker
I would rather refund the difference considering upcharging is a no-no!
However, according to HUD you can disclose your GFE with worse case scenerio pricing. For instance we are listing our appraisals at $350.00. Due to HVCC the lender doesn't know which appraiser will get the order, therefore we disclosure the fee of the highest appraiser.
That's true jl..no arguments, but in this case, that wasn't the issue. They put $35 on the HUD, but the bill was only $25.00 (post-closing)
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 02/04/10 05:27 PM
Anyone else having a problem running these through DU where it is taking the credit from block 2 and turning it into an absolute charge once it hits DU, and thus increasing the funds borrower need to bring???
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/04/10 06:12 PM
that's just weird, JJ.
Posted By: ahou
Re: RESPA changes 1-1-10 - 02/04/10 06:15 PM
Here is HUD's answer to my question on how to show a cr in the comparison chart when there is a tolerance violation.
"This will depend on the location of the charge that is subject to the cure. If a lump sum credit is being provided to cure a potential violation in the 10% tolerance category, the credit can be added to the comparison chart on an additional line as a negative number and added to the calculation of the 10% amount in the HUD-1 column. If the cure relates to a cure of a zero tolerance item, this cannot be done. For a cure related to transfer taxes, please see FAQ #9 in under the “Section 4 and 5 – Right to cure and tolerance violation” section of the 01/28/10 FAQ document. For a cures related to Lines 801, 802 or 803, the actual charge to the borrower can be entered on page 2 of the HUD-1, which will show a correction on the comparison chart."
"This will depend on the location of the charge that is subject to the cure. If a lump sum credit is being provided to cure a potential violation in the 10% tolerance category, the credit can be added to the comparison chart on an additional line as a negative number and added to the calculation of the 10% amount in the HUD-1 column. If the cure relates to a cure of a zero tolerance item, this cannot be done. For a cure related to transfer taxes, please see FAQ #9 in under the “Section 4 and 5 – Right to cure and tolerance violation” section of the 01/28/10 FAQ document. For a cures related to Lines 801, 802 or 803, the actual charge to the borrower can be entered on page 2 of the HUD-1, which will show a correction on the comparison chart."
Posted By: BNKO
Re: RESPA changes 1-1-10 - 02/04/10 07:03 PM
Please forgive me for asking this question, but I have been in the middle of a bank acquisition for the last few weeks and seemed to have RESPA amnesia!
Here's the situation:
LO registered a loan in 2009 and only pulled credit, but provided a GFE (old form). The complete application was received on 1/7, but no new GFE was provided. Do we keep with the old GFE, or do we need to redisclose using the new (I think the new because the application date is 1/7/10)? If the new, can we change terms, fees, etc., or are we stuck with what was originally disclosed on the old GFE form?
Here's the situation:
LO registered a loan in 2009 and only pulled credit, but provided a GFE (old form). The complete application was received on 1/7, but no new GFE was provided. Do we keep with the old GFE, or do we need to redisclose using the new (I think the new because the application date is 1/7/10)? If the new, can we change terms, fees, etc., or are we stuck with what was originally disclosed on the old GFE form?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 02/04/10 07:31 PM
Originally Posted By: RR joker
that's just weird, JJ.
I am hating my LOS system right now then...
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/04/10 08:33 PM
kill it and cook it for supper then!
Cute groundhogbeaver, btw! That is a groundhog, right?
Cute groundhogbeaver, btw! That is a groundhog, right?
Posted By: kwest2457
Re: RESPA changes 1-1-10 - 02/04/10 09:03 PM
Our department is disagreeing on where to put the Fannie Mae Loan Level Price Adjustment. We treat this as a CASH fee that is calculated based on various catagories, and we simply pass the adjustment on to the borrower. Should this fee be placed in Section 3 of the GFE since it is a third party fee? It has been suggested it be placed in the origination charge? This can in fact change due to an appraised value difference, manufactured housing, etc...so we are thinking since you can't change section 1 for any reason, we may get bit in the behind if we miscalculate this fee...Any suggestions?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/04/10 09:09 PM
Originally Posted By: kwest2457
Our department is disagreeing on where to put the Fannie Mae Loan Level Price Adjustment. We treat this as a CASH fee that is calculated based on various catagories, and we simply pass the adjustment on to the borrower. Should this fee be placed in Section 3 of the GFE since it is a third party fee? It has been suggested it be placed in the origination charge? This can in fact change due to an appraised value difference, manufactured housing, etc...so we are thinking since you can't change section 1 for any reason, we may get bit in the behind if we miscalculate this fee...Any suggestions?
Try this thread
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 02/04/10 10:34 PM
Originally Posted By: RR joker
kill it and cook it for supper then!
Cute groundhogbeaver, btw! That is a groundhog, right?
Cute groundhogbeaver, btw! That is a groundhog, right?
Unfortunately, not everyone felt the same way!
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 02/05/10 04:27 AM
Originally Posted By: RR joker
Originally Posted By: jlroberts
Originally Posted By: Reads Regs
Originally Posted By: Just Jay
Arrrghhh... seller paid OTI: borrowers or sellers column?
Put the charge in the borrower's column on line 1103 of the HUD-1 then show a credit in the 204 - 209 series and then a charge in the 506 - 509 series. The following is from page 42 of 57 of the 1/28/10 FAQs.
HUD-1 – Seller-paid items
1) Q: What if at closing the seller is paying for a settlement service that was listed on the GFE, such as the Owner‘s title insurance policy? How is this shown on the HUD-1?
A: If the seller is paying for a service that was on the GFE, such as Owner‘s title insurance, the charge remains in the borrower‘s column on the HUD-1. A credit from the seller to the borrower to offset the charge should be listed on the first page of the HUD-1 in Lines 204-209 and Lines 506-509 respectively.
Arrrghhh... seller paid transfer taxes: borrowers or sellers column?
I am still waiting for HUD to answer me as to whether this FAQ also applies to transfer taxes.
If it was on your GFE in the borrower's column (because state law doesn't require the seller to pay it), you show it in the borrower's column on the HUD, then 500 and 200 series for seller.
Thanks RR, that is exactly how I understood it but the settlement agent was not agreeing. I got my answer from HUD today and my answer was confirmed.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 02/05/10 01:34 PM
I would love to chat with someone via a pm who uses Harland's E3, and runs DU.
Posted By: Noogabanker
Re: RESPA changes 1-1-10 - 02/05/10 05:23 PM
I've searched and also put a post out with no response, any help is appreciated:
We charge customers for a future deed release fee at closing. Where should this go on the new GFE and HUD?
Thanks,
We charge customers for a future deed release fee at closing. Where should this go on the new GFE and HUD?
Thanks,
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 02/05/10 05:27 PM
GFE = I don't think it goes on the GFE. Block 7 is only for "fees for recording the loan . . . "
Settlement Statement = 1200s - line 1206.
Settlement Statement = 1200s - line 1206.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/05/10 06:38 PM
We have been showing it in Block 7 and then under releases in 1202. The more I think about this tho..I believe it would actually be a Block 1 fee (since it's a future charge, but required).
food for more thought.
food for more thought.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 02/05/10 06:50 PM
I agree and most likely it should be treated as a PPFC as it is not actually being paid to a public official until way off sometime in the future and who knows what the charge may be at that point. The reconciliation of this fee holding account must be a nightmare.........
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/05/10 07:18 PM
Randy, according to confirmation I received from the FRB in regard to the following, they confirmed regardless of when paid, it isn't a FC.
(e) Certain security interest charges. If itemized and disclosed, the following charges may be excluded from the finance charge:
(1) Taxes and fees prescribed by law that actually are or will be paid to public officials for determining the existence of or for perfecting, releasing, or satisfying a security interest.
After refreshing my memory on this..I believe part of the above is why we made the decision to place it in block 7 and itemize in 1202 (included intotal 1201)
(e) Certain security interest charges. If itemized and disclosed, the following charges may be excluded from the finance charge:
(1) Taxes and fees prescribed by law that actually are or will be paid to public officials for determining the existence of or for perfecting, releasing, or satisfying a security interest.
After refreshing my memory on this..I believe part of the above is why we made the decision to place it in block 7 and itemize in 1202 (included intotal 1201)
Posted By: Parker Wilson
Re: RESPA changes 1-1-10 - 02/05/10 07:19 PM
Originally Posted By: David Dickinson
Originally Posted By: respa queen
Originally Posted By: DD Regs
Question, If you quote an appraisal fee on the GFE, but Fannie comes back and says, they approve without an appraisal, so you don't order one. Do we send a new GFE w/o the appraisal fee or should we leave it on there and enjoy the cushion on the tolerance bucket?
We've already had this happen. In our case, we considered it a changed circumstance, sent out a new GFE with the appraisal fee removed and increased Block 1 by the $75 fee. Hope we did the right thing!
I would NOT issue a new GFE. Why lower the total of your tolerance bucket? You don't have to issue a new GFE even when there is a changed circumstance. The point is the borrower is wiling to do the loan at $X. If the final costs are lower than $X, they would be willing to close, wouldn't they? By lowering your 10% tolerance bucket total, you're cutting your throat on other overruns.
I figured if we disclosed a 400.00 appraisal fee that we never need, and then charge the borrower 75.00 on the HUD, we should still have 325.00 left "in the bucket" for our tolerance calculations. He told me that you can not do that.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/05/10 07:22 PM
Hummm..I'm not so sure but what I have now lost faith in Mr. Friend's responses. That makes no sense and goes against the longtime requirement to show "would have been" fees.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 02/05/10 07:30 PM
Parker, did he tell you this in writing? If so, will you post his response? If not, can you get him to do so in writing? As joker said, this goes against all prior knowledge on how to handle these things, most noteably, the sacrosanct Block 1 rule.
Posted By: Parker Wilson
Re: RESPA changes 1-1-10 - 02/05/10 07:31 PM
I have a question. One of our loan officers disclosed the incorrect amount of transfer taxes in MD. The loan amount then decreased, allowing us to issue a revised GFE. My question is, can we correct the transfer tax due to the loan amount change. I would tend to say no, since a decrease in loan amount should lead to a decrease in transfer taxes. In this case, a decrease in loan amount is going to lead to an increase in transfer taxes due to the fact it was disclosed incorrectly originally.
Posted By: Parker Wilson
Re: RESPA changes 1-1-10 - 02/05/10 07:43 PM
Originally Posted By: Truffle Royale
Parker, did he tell you this in writing? If so, will you post his response? If not, can you get him to do so in writing? As joker said, this goes against all prior knowledge on how to handle these things, most noteably, the sacrosanct Block 1 rule.
Another issue...and I think I saw somebody mention this...but is anybody not sure how to update their system as things change? We use calyx, and in the past our processors would revise the GFE in calyx as we found out the actual cost of certain services. The problem with that is, if they update the title fees...and then we have a changed circumstance for something unrelated to title fees, our revised GFE is going to show revised title fees as well, and we all know that we can only revise fees impacted by the changed circumstance. How are you guys dealing with this issue?
Posted By: Parker Wilson
Re: RESPA changes 1-1-10 - 02/05/10 07:58 PM
Technical HUD question:
One of our first loans we did on the new GFE and HUD are causing us some problems. The borrower got a survey on the property, even though it wasn't required to close the loan. This survey was never disclosed to the borrower on the GFE. Now we are trying to figure out where to put in on the HUD. It wasn't a required service, so I don't think it goes in Block 3. I'm worried about putting it in the 1300 section, because we didn't provide the borrower with a provider list as required for blocks 4-6. On top of all that, the attorney is refusing to put it 1301, and showing the amount outside of the column in 1303 because it wasn't disclosed on the GFE. I honestly have no idea where it goes.
Secondly, if the borrower selects their own attorney, where do we show the title services on the comparison chart on page 3? The attorney is trying to keep it in the 10% category. I think it needs to be moved down "charges that can change section." Am i correct?
One of our first loans we did on the new GFE and HUD are causing us some problems. The borrower got a survey on the property, even though it wasn't required to close the loan. This survey was never disclosed to the borrower on the GFE. Now we are trying to figure out where to put in on the HUD. It wasn't a required service, so I don't think it goes in Block 3. I'm worried about putting it in the 1300 section, because we didn't provide the borrower with a provider list as required for blocks 4-6. On top of all that, the attorney is refusing to put it 1301, and showing the amount outside of the column in 1303 because it wasn't disclosed on the GFE. I honestly have no idea where it goes.
Secondly, if the borrower selects their own attorney, where do we show the title services on the comparison chart on page 3? The attorney is trying to keep it in the 10% category. I think it needs to be moved down "charges that can change section." Am i correct?
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 02/05/10 08:09 PM
If the survey wasn't lender required, it goes into the 1300 series. If it wasn't lender required, why would it be on the GFE?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 02/05/10 08:16 PM
Randy's right. See FAQ #1 in the "GFE-Block 6" section. If it's not required by the lender, it doesn't go on the GFE.
Posted By: Amos
Re: RESPA changes 1-1-10 - 02/05/10 08:23 PM
Also see FAQ #9 in the "HUD-1 - General" section:
9) Q: Where should the survey fee be disclosed on the HUD-1?
A: The location of the survey fee on the HUD-1 is determined as follows:
(a) if the loan originator required a survey as a condition of the loan and selected the settlement service provider, the charge for the survey must be listed on a blank line in the 800 series in the borrower‘s column;
(b) if the loan originator required a survey as a condition of the loan and the borrower selected the settlement service provider, the charge for the survey must be listed as part of the total in Line 1301 of the HUD-1 and itemized as applicable;
(c) if a survey was required to issue a lender‘s or owner‘s title insurance policy, the charge for the survey is part of the charge in Line 1101 and must be further itemized if performed by a third party;
(d) if the borrower elected to obtain a survey that was neither required by the loan originator nor required to issue a lender‘s or owner‘s title insurance policy, then the charge is listed in the borrower‘s column on a blank line in the 1300 series.
9) Q: Where should the survey fee be disclosed on the HUD-1?
A: The location of the survey fee on the HUD-1 is determined as follows:
(a) if the loan originator required a survey as a condition of the loan and selected the settlement service provider, the charge for the survey must be listed on a blank line in the 800 series in the borrower‘s column;
(b) if the loan originator required a survey as a condition of the loan and the borrower selected the settlement service provider, the charge for the survey must be listed as part of the total in Line 1301 of the HUD-1 and itemized as applicable;
(c) if a survey was required to issue a lender‘s or owner‘s title insurance policy, the charge for the survey is part of the charge in Line 1101 and must be further itemized if performed by a third party;
(d) if the borrower elected to obtain a survey that was neither required by the loan originator nor required to issue a lender‘s or owner‘s title insurance policy, then the charge is listed in the borrower‘s column on a blank line in the 1300 series.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/05/10 08:43 PM
Borrower got his own survey - goes in the 1300 section-other
Should go in column unless borrower paid POC-then goes inside.
If the attorney that was selected was on your list, your attorney is right. If it's outside of your list, there is no tolerance issue (it can change)
Should go in column unless borrower paid POC-then goes inside.
If the attorney that was selected was on your list, your attorney is right. If it's outside of your list, there is no tolerance issue (it can change)
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 02/05/10 08:47 PM
Originally Posted By: RR joker
We have been showing it in Block 7 and then under releases in 1202. The more I think about this tho..I believe it would actually be a Block 1 fee (since it's a future charge, but required).
First, it's absolutely not a FC (as Joker pointed out).
Second, I don't think it's a Block 1 fee - it's not part of the origination and it's not paid to the lender.
I can see this in Block 7, but Appendix C makes it sound like Block 7 is only for the recording of that loan. If that's true, I don't think this fee would be listed on the GFE.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 02/05/10 08:50 PM
None of the software systems are working right yet. Your processors are going to have to do and undo and redo to get the GFE to show only the allowable fees as changed on a revised GFE. Tell them it's the same thing all the rest of us are doing until the software providers get this all fixed and working. Our first corrective update to the 1/1/10 corrections is scheduled to come out in March. (FICS)
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 02/05/10 08:56 PM
Question regarding FHA Origination fee. If going into the loan we know it is an FHA loan and will have this 1% origination charge, we are including it with the Origination fees that are part of Block 1 of the GFE.
My question is if something happens and loan amount changes, this would change the amount in the sacred Box 1. Am I correct to think it is OK to change the amount in Block one based on the below FAQ?
8) Q: When the interest rate goes from float to rate lock, may Block 1 on the GFE change?
A: No. However, Block 1 can increase due to a changed circumstance if the change affects the loan amount and all or a portion of the Origination Charges were calculated as a percentage of the loan amount. Block 1 may also increase if the borrower either requests a different loan product or the borrower is no longer eligible for the loan product contained in the initial GFE, but is eligible for a different loan product.
My question is if something happens and loan amount changes, this would change the amount in the sacred Box 1. Am I correct to think it is OK to change the amount in Block one based on the below FAQ?
8) Q: When the interest rate goes from float to rate lock, may Block 1 on the GFE change?
A: No. However, Block 1 can increase due to a changed circumstance if the change affects the loan amount and all or a portion of the Origination Charges were calculated as a percentage of the loan amount. Block 1 may also increase if the borrower either requests a different loan product or the borrower is no longer eligible for the loan product contained in the initial GFE, but is eligible for a different loan product.
Posted By: ahou
Re: RESPA changes 1-1-10 - 02/05/10 08:57 PM
My question to HUD: Customer usually want us to overnight funds to payoff a loan at a 3rd party bank to avoid paying additional interest. The bank does not require this. Will this fee have to be in our origination charge, even if we are not requiring this service? If it doesn't go into our origination charge, where do we put it?
HUD-1 – General
1) Q: How are courier and overnight delivery fees shown on the HUD-1 Settlement Statement?
A: Courier and overnight delivery fees are considered to be fees for administrative or processing services. They are part of a primary service, such as the origination service or title
service, and may not be separately itemized.
HUD’s answer:
If it is customary for your customer to request the use of a courier for the delivery of the payoff than this charge would be classified as an administrative or processing fee. See FAQ listed below.
(FAQ’s Posted 12/31/2009)
HUD-1 – General (Page 36) Question 1
1) Q: How are courier and overnight delivery fees shown on the HUD-1 Settlement Statement?
A: Courier and overnight delivery fees are considered to be fees for administrative or processing services. They are part of a primary service, such as the origination service or title service, and may not be separately itemized.
GFE- General (Page 6) Question 12
2)
Q: What are processing and administrative services?
A: Processing and administrative services are those services required to perform the functions involved in title service and origination service. Processing and administrative services include, but are not limited to the following: document delivery, document preparation, copying, and wiring, preparing endorsements, document handling and notarization.
HUD-1 – General
1) Q: How are courier and overnight delivery fees shown on the HUD-1 Settlement Statement?
A: Courier and overnight delivery fees are considered to be fees for administrative or processing services. They are part of a primary service, such as the origination service or title
service, and may not be separately itemized.
HUD’s answer:
If it is customary for your customer to request the use of a courier for the delivery of the payoff than this charge would be classified as an administrative or processing fee. See FAQ listed below.
(FAQ’s Posted 12/31/2009)
HUD-1 – General (Page 36) Question 1
1) Q: How are courier and overnight delivery fees shown on the HUD-1 Settlement Statement?
A: Courier and overnight delivery fees are considered to be fees for administrative or processing services. They are part of a primary service, such as the origination service or title service, and may not be separately itemized.
GFE- General (Page 6) Question 12
2)
Q: What are processing and administrative services?
A: Processing and administrative services are those services required to perform the functions involved in title service and origination service. Processing and administrative services include, but are not limited to the following: document delivery, document preparation, copying, and wiring, preparing endorsements, document handling and notarization.
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 02/05/10 09:04 PM
The key to that answer is "If it is customary".
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/05/10 09:07 PM
Originally Posted By: David Dickinson
Originally Posted By: RR joker
We have been showing it in Block 7 and then under releases in 1202. The more I think about this tho..I believe it would actually be a Block 1 fee (since it's a future charge, but required).
First, it's absolutely not a FC (as Joker pointed out).
Second, I don't think it's a Block 1 fee - it's not part of the origination and it's not paid to the lender.
I can see this in Block 7, but Appendix C makes it sound like Block 7 is only for the recording of that loan. If that's true, I don't think this fee would be listed on the GFE.
I would agree with that logic, David, except because HUD has lumped many things in Block 2 that have NOTHING to do with the interest rate...I have to err on the side of...this is a GOOD faith estimate..we're charging and by golly we'll put in on the GFE in the same area it will appear on the HUD...whew..I feel better now.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/05/10 09:09 PM
Originally Posted By: DD Regs
Question regarding FHA Origination fee. If going into the loan we know it is an FHA loan and will have this 1% origination charge, we are including it with the Origination fees that are part of Block 1 of the GFE.
My question is if something happens and loan amount changes, this would change the amount in the sacred Box 1. Am I correct to think it is OK to change the amount in Block one based on the below FAQ?
8) Q: When the interest rate goes from float to rate lock, may Block 1 on the GFE change?
A: No. However, Block 1 can increase due to a changed circumstance if the change affects the loan amount and all or a portion of the Origination Charges were calculated as a percentage of the loan amount. Block 1 may also increase if the borrower either requests a different loan product or the borrower is no longer eligible for the loan product contained in the initial GFE, but is eligible for a different loan product.
My question is if something happens and loan amount changes, this would change the amount in the sacred Box 1. Am I correct to think it is OK to change the amount in Block one based on the below FAQ?
8) Q: When the interest rate goes from float to rate lock, may Block 1 on the GFE change?
A: No. However, Block 1 can increase due to a changed circumstance if the change affects the loan amount and all or a portion of the Origination Charges were calculated as a percentage of the loan amount. Block 1 may also increase if the borrower either requests a different loan product or the borrower is no longer eligible for the loan product contained in the initial GFE, but is eligible for a different loan product.
Yes, your loan amount changed.
Posted By: "Rita"
Re: RESPA changes 1-1-10 - 02/05/10 09:48 PM
OK, I just got on to read about RESPA and frankly I think we all need to go to the funny farm.
I'm a little new posting questions AND I am really behind in RESPA but I have a question that I'm not sure I saw addressed in previous posts.
With regard to the Lender chosen service providers - How are banks supposed to list a charge for a bank chosen Appraiser and still remain within the 10% tolerance requirements of block 3? Also with respect to covered construction loans - How is everyone disclosing on the GFE the 1st initial payment due amount when it is an interest only payment?
Sorry if these are remedial questions.
I'm a little new posting questions AND I am really behind in RESPA but I have a question that I'm not sure I saw addressed in previous posts.
With regard to the Lender chosen service providers - How are banks supposed to list a charge for a bank chosen Appraiser and still remain within the 10% tolerance requirements of block 3? Also with respect to covered construction loans - How is everyone disclosing on the GFE the 1st initial payment due amount when it is an interest only payment?
Sorry if these are remedial questions.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 02/05/10 10:10 PM
From the RESPA FAQ Page 23 under GFE-Summary of your loan.
2) Q: How should the loan originator complete the ―Your initial monthly amount owed for principal, interest, and any mortgage insurance is‖ in the ―Summary of your loan‖ section of the GFE for a loan that begins as an interest-only and then becomes fully amortized?
A: Regardless of the type of loan, the loan originator must fill in the initial monthly amount owed for principal, interest, and any mortgage insurance. The amount shown must be the greater of: (1) The required monthly payment for principal and interest for the first regularly scheduled payment, plus any monthly mortgage insurance payment; or (2) the accrued interest for the first regularly scheduled payment, plus any monthly mortgage insurance payment.
This thread may help also:
http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1312782
2) Q: How should the loan originator complete the ―Your initial monthly amount owed for principal, interest, and any mortgage insurance is‖ in the ―Summary of your loan‖ section of the GFE for a loan that begins as an interest-only and then becomes fully amortized?
A: Regardless of the type of loan, the loan originator must fill in the initial monthly amount owed for principal, interest, and any mortgage insurance. The amount shown must be the greater of: (1) The required monthly payment for principal and interest for the first regularly scheduled payment, plus any monthly mortgage insurance payment; or (2) the accrued interest for the first regularly scheduled payment, plus any monthly mortgage insurance payment.
This thread may help also:
http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1312782
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 02/05/10 10:11 PM
Quote:
With regard to the Lender chosen service providers - How are banks supposed to list a charge for a bank chosen Appraiser and still remain within the 10% tolerance requirements of block 3?
The point is - if you know the provider, you should know their fees. Live by what you know. If you put your "consumer hat" on, how is it fair for you to tell me one fee and have it be more later?
Quote:
Also with respect to covered construction loans - How is everyone disclosing on the GFE the 1st initial payment due amount when it is an interest only payment?
If it is an interest only loan, the monthly payment is $0 and give the full amount to be paid at the end as a balloon payment.
Posted By: stella
Re: RESPA changes 1-1-10 - 02/05/10 10:24 PM
2 quick quesions:
1. Do we have to redisclose for changes in interest, escrow or homeowners insurance since they can change unlimited?
2. Is anyone giving a GFE on preapprovals?
Thanks!
1. Do we have to redisclose for changes in interest, escrow or homeowners insurance since they can change unlimited?
2. Is anyone giving a GFE on preapprovals?
Thanks!
Posted By: "Rita"
Re: RESPA changes 1-1-10 - 02/05/10 10:50 PM
So David
If you have a list of appraisers and prices vary with each appraiser and each loan, how do you properly disclose the fee when the appraiser is engaged independently of the production side (i.e. by credit admin) and usually is not even determined at the time the GFE is required by law to be delivered?
Sorry to be a pain!
If you have a list of appraisers and prices vary with each appraiser and each loan, how do you properly disclose the fee when the appraiser is engaged independently of the production side (i.e. by credit admin) and usually is not even determined at the time the GFE is required by law to be delivered?
Sorry to be a pain!
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 02/05/10 11:04 PM
Disclose the highest fee of all appraisers. The GFE is a worse-case-scenario.
Posted By: Parker Wilson
Re: RESPA changes 1-1-10 - 02/08/10 05:03 PM
Originally Posted By: rlcarey
If the survey wasn't lender required, it goes into the 1300 series. If it wasn't lender required, why would it be on the GFE?
If it wasn't a lender required service, where does it go on the comparison chart on page 3?
Posted By: MarieR
Re: RESPA changes 1-1-10 - 02/08/10 05:09 PM
In prepareing our first HUD 1 with lenders title insurance we have run across an issue I'd appreciate some feedback on.
On line 1104 we listed the total for lender's title insurance premium. Then on lines 1106 and 1107 we listed the portion of the premium being paid to the agent and underwriter respectfully. The problem is that there are taxes included in the total premium on 1104 that are not accounted for on lines 1106/1107 so they do not total line 1104.
My question - do these lines have to total or do we need to disclose this tax on a blank line in the 1100 series? Given the fact that most of the HUD doesn't make sense to me and HUD doesn't seem to care if the final receipant is listed, I am leaning toward not needing to seperate out the tax as long as it is included in the total premium amount on line 1104. I have emialed HUD for their answer, but wanted to check here to get opinions.
Thanks
On line 1104 we listed the total for lender's title insurance premium. Then on lines 1106 and 1107 we listed the portion of the premium being paid to the agent and underwriter respectfully. The problem is that there are taxes included in the total premium on 1104 that are not accounted for on lines 1106/1107 so they do not total line 1104.
My question - do these lines have to total or do we need to disclose this tax on a blank line in the 1100 series? Given the fact that most of the HUD doesn't make sense to me and HUD doesn't seem to care if the final receipant is listed, I am leaning toward not needing to seperate out the tax as long as it is included in the total premium amount on line 1104. I have emialed HUD for their answer, but wanted to check here to get opinions.
Thanks
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 02/08/10 05:11 PM
If the survey is not a lender required service it does not go on the GFE nor does it go in a comparison chart on the HUD.
Posted By: nelender
Re: RESPA changes 1-1-10 - 02/08/10 07:28 PM
I apologize if this has been previously addressed, but is there anything definitive on where to place the payment of real estate taxes on the HUDI Settlement Statement?
Posted By: Still Smiling
Re: RESPA changes 1-1-10 - 02/08/10 10:31 PM
Question on borrower changed circumstances: If a borrower decides to pay all closing cost out of pocket after the GFE has been provided, do we consider this a changed circumstance and provide a revised GFE without the fees?
Posted By: Still Smiling
Re: RESPA changes 1-1-10 - 02/08/10 11:07 PM
In thinking my question through, I think this may be incorrect. It would seem that this could be shown on the HUD, but how?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 02/08/10 11:19 PM
Instead of having a higher loan amount and deducting all the fees, the borrower will just have to bring more to closing. That's assuming you're going to cut the checks and pay the bills.
Posted By: Runreb
Re: RESPA changes 1-1-10 - 02/08/10 11:56 PM
Would you need to redisclose the GFE in this scenario?
The appraisal was ordered. But it came back subject to an engineer's report. The borrower ordered the engineer's report and paid for it. Therefore, the engineer's report will not have to be paid at closing. Since it was required on the appraisal would we have to put the engineer's report fee on the GFE and redisclose?
The appraisal was ordered. But it came back subject to an engineer's report. The borrower ordered the engineer's report and paid for it. Therefore, the engineer's report will not have to be paid at closing. Since it was required on the appraisal would we have to put the engineer's report fee on the GFE and redisclose?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 02/09/10 03:19 AM
Originally Posted By: nelender
I apologize if this has been previously addressed, but is there anything definitive on where to place the payment of real estate taxes on the HUDI Settlement Statement?
Taxes are not a settlement service, so they are not listed on the GFE.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 02/09/10 03:22 AM
Originally Posted By: Still Smiling
Question on borrower changed circumstances: If a borrower decides to pay all closing cost out of pocket after the GFE has been provided, do we consider this a changed circumstance and provide a revised GFE without the fees?
No. How the fees are paid is not a factor for the GFE, so a revised GFE shouldn't be issued. Just list the fees on the Settlement Statement as POC. They still must be listed in the tolerance tables.
Posted By: Still Smiling
Re: RESPA changes 1-1-10 - 02/09/10 01:45 PM
Thanks for the clarification
Posted By: drobrtsn
Re: RESPA changes 1-1-10 - 02/09/10 08:45 PM
I have read conflicting information and need clarification. Is the escrow requirement for first-lien loans with an "application date of April 1, 2010 or later" or is the requirement for first-lien loans with a "closing date of April 1, 2010 or later"???
Posted By: Amos
Re: RESPA changes 1-1-10 - 02/09/10 08:57 PM
It's applications received on or after April 1, 2010 (date for manufactured homes is October 1, 2010). And this is not a RESPA change. This is a Regulation Z change.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 02/09/10 09:08 PM
On a refinance, if we are not ordering new documents, we must list the price and then give a credit in block 2? We are not getting a new title opinion but relying on teh exisitng one. When the loas was first done they consumer paide $295 for title opionion. So on the new loan, we disclose $295 for the title opionion and hten give a credit of $295 in block 2 on the GFE?
Posted By: drobrtsn
Re: RESPA changes 1-1-10 - 02/09/10 09:25 PM
Thanks for the clarification Amos. That is what I thought it was also.
Yes, I do know it is a Reg. Z change and not a RESPA change, but it was amoung these postings were the conflicting information was that I was referring to and why I put the posting here.
Thanks again.
Yes, I do know it is a Reg. Z change and not a RESPA change, but it was amoung these postings were the conflicting information was that I was referring to and why I put the posting here.
Thanks again.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 02/09/10 11:32 PM
Conflicting training...does the title insurance premium have to be broken into agent and underwriter portions in the 1100 section on the new HUD-1? Lots of title companies just quote a single premium. Thanks for your help.
Posted By: In the middle of it
Re: RESPA changes 1-1-10 - 02/10/10 12:22 AM
Another changed circumstance question: 3500.7(f)(2) discusses changes affecting loan terms. If the loan amount decreases, but charges do not change, do you reissue the GFE? The language is the same as for increased costs - "may reissue" - and since terms are repeated on the HUD, the question has come up. Do the terms on the GFE and the HUD need to match???
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 02/10/10 03:37 AM
If the loan amount decreases we would have fees that would change such as the origination fee and title insurance premium (on a refinance), so we would issue a new GFE.
Are you charging a flat origination charge for all your loans, is that why your fees would not change? We have heard that some lenders in our area are going to a flat fee so I am curious how this would work, would a borrower applying for a 50K loan have the same origination fee as a borrower applying for a 500K loan?
Are you charging a flat origination charge for all your loans, is that why your fees would not change? We have heard that some lenders in our area are going to a flat fee so I am curious how this would work, would a borrower applying for a 50K loan have the same origination fee as a borrower applying for a 500K loan?
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 02/10/10 02:22 PM
JJR - if the origination charge is truly reflecting the cost to originate a loan, are the lender's costs different for a 50K loan versus a 500K loan?
We charge a flat fee with the only variables being loans with a subordination being higher.
We charge a flat fee with the only variables being loans with a subordination being higher.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 02/10/10 02:34 PM
Originally Posted By: Truffle Royale
Conflicting training...does the title insurance premium have to be broken into agent and underwriter portions in the 1100 section on the new HUD-1? Lots of title companies just quote a single premium. Thanks for your help.
You must list the agent's/underwriter's portion, but it could be combined. See FAQ #9 & 22 in the "HUD-1 1100" section.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 02/10/10 02:39 PM
Originally Posted By: ahkcompliance
On a refinance, if we are not ordering new documents, we must list the price and then give a credit in block 2? We are not getting a new title opinion but relying on the existing one. When the loan was first done they consumer paid $295 for title opinion. So on the new loan, we disclose $295 for the title opinion and then give a credit of $295 in block 2 on the GFE?
First, I have seen conflicting emails from HUD on this. My read of the regulation is you must list all settlement services even if you're relying on previous services (appraisal, credit report, flood determination, etc.). I'd love to see HUD issue a FAQ that says we don't have to.
If you're listing a previously paid for service, you DON'T list a credit in Block 2. Block 2 is used to list credits for fees the LENDER is paying for. You're not paying for these services again, you're only saying they are required. On the HUD-1/1A, you'll list these fees as "POC (Borrower)" to the left of the borrower's column, indicating they have already paid for these services (with the prior loan).
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/10/10 03:27 PM
Originally Posted By: David Dickinson
Originally Posted By: nelender
I apologize if this has been previously addressed, but is there anything definitive on where to place the payment of real estate taxes on the HUDI Settlement Statement?
Taxes are not a settlement service, so they are not listed on the GFE.
but, on the HUD, if you are requiring them to be paid, you can put them in the 900 section.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/10/10 03:38 PM
Quote:
Quote:
Also with respect to covered construction loans - How is everyone disclosing on the GFE the 1st initial payment due amount when it is an interest only payment?
Also with respect to covered construction loans - How is everyone disclosing on the GFE the 1st initial payment due amount when it is an interest only payment?
Quote:
If it is an interest only loan, the monthly payment is $0 and give the full amount to be paid at the end as a balloon payment.
David, this is not how we are handling an interest only loan. We show the maximum draw interest in the payment section. (If you don't, your balloon will be very incorrect). We would handle a "all due at maturity" loan in the manner you have described.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 02/10/10 03:42 PM
Taxes are NOT a settlement service, so they should NOT be listed in Section L (including the 900s). They would be listed in the 100s (first page of the HUD-1). If you read the instructions for 104/105, they appear to go there.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/10/10 03:53 PM
Well, I'd say that could depend. If this is a sale, and previously paid taxes are being prorated, then the 100 section is the proper placement. BUT, if they are delinquent or due taxes and the lender is requiring them to be paid, I would still consider that a 900 item.
when I answered above, I was thinking about this as "due/pastdue" and didn't take into consideration it could be a pro-rated situation.
David, do you still disagree?
when I answered above, I was thinking about this as "due/pastdue" and didn't take into consideration it could be a pro-rated situation.
David, do you still disagree?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 02/10/10 03:58 PM
I do disagree. Prorated taxes are a CREDIT to the borrower (500/200). Delinquent taxes or taxes due before the first payment are a CHARGE to the borrower. They go in the 100s. Taxes are NOT a settlement service - it's not in the RESPA definition.
Posted By: DoorKey
Re: RESPA changes 1-1-10 - 02/10/10 04:02 PM
On our new construction loans and major home improvement loans, we have an appraisal done by a third party appraiser to determine value. After the loan is closed and the construction is fully completed, we will send the appraiser back out to the property to confirm that the work was performed and that the value is still valid. We refer to this as an appraisal recertification. We charge the borrower for both the initial appraisal and for the appraisal recertification. With the new RESPA changes, should the cost for the appraisal recertification by listed on the GFE in Block 1 or Block 3? We were thinking that because the appraisal recertification is performed AFTER the loan closing that it should be in Block 1; however, it is performed by the appraiser and maybe it should be in Block 3. Which Block should it really go in?
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 02/10/10 04:09 PM
I posed my question early to HUD about re-using settlement services. Here is my response I got from HUD:
If you do not require a service (using a previous appraisal etc) it is not required to disclose it on the GFE.
If you do not require a service (using a previous appraisal etc) it is not required to disclose it on the GFE.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 02/10/10 04:13 PM
We've always done the same as RR Joker. Taxes in the Items required by Lender to be paid in advance/900 section, right after the insurance policy. You're saying this is wrong, DAvid?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 02/10/10 04:15 PM
I've got just the opposite answer from HUD - and so did someone else that posted it to BOL. I'd love to see this in a FAQ from HUD so we stop getting conflicting answers.
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 02/10/10 04:31 PM
Our state banking association got the same answer as I did. And HUD expects us to do it right when they give conflicting answers.
Posted By: hoegie
Re: RESPA changes 1-1-10 - 02/10/10 06:27 PM
I have a question. If you have a changed circumstance, and you re-issue a new GFE, how long do you have to wait before you can close the loan? Also, does a change in the amount of certain fees (attorneys fees, appraisal fee, etc...) count as a changed circumstance?
Posted By: rsanders
Re: RESPA changes 1-1-10 - 02/10/10 06:31 PM
Are there any requirements on what the list you give customers to pick from must look like for the services they can select?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 02/10/10 06:34 PM
We have opted to continue doing preapprovals, thus we issue a GFE w/o a property address so we can obtain verfication documents.
When would the applicant have to demonstrate intent to proceed?
Because this is the scenario I am running into, and not sure how to deal with: Preapproval applied for, GFE issued, preapproval underwritten and approved with conditions, applicant finds property and locks rate, intent is normally singed at rate lock.
Often the time between application and locating a property is more than 10 days, so we have a case to redo our GFE to show the lock, and adjust charges as needed, including and changres that my be a result of defining a property.
Something in this scenario is not sitting right with me, and I cannot quite put my finger on it, but I am afraid Iam not getting/documenting true intent early enough... thoughts?
When would the applicant have to demonstrate intent to proceed?
Because this is the scenario I am running into, and not sure how to deal with: Preapproval applied for, GFE issued, preapproval underwritten and approved with conditions, applicant finds property and locks rate, intent is normally singed at rate lock.
Often the time between application and locating a property is more than 10 days, so we have a case to redo our GFE to show the lock, and adjust charges as needed, including and changres that my be a result of defining a property.
Something in this scenario is not sitting right with me, and I cannot quite put my finger on it, but I am afraid Iam not getting/documenting true intent early enough... thoughts?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 02/10/10 06:36 PM
Originally Posted By: David Dickinson
I've got just the opposite answer from HUD - and so did someone else that posted it to BOL. I'd love to see this in a FAQ from HUD so we stop getting conflicting answers.
I got two responses from HUD on this one, one said yes, one said no
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 02/10/10 06:47 PM
Its scary that HUD conflicts themselves. I really don't see how the can enforce us to be in compliance. I think we may need longer than the 120 days.
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 02/10/10 06:48 PM
I've been under the impression Jay that if you give a GFE on a preapproval without a property address, you are assumed to have that property address, so your post about adjusting charges as needed including "changes that may be a result of defining a property" doesn't sound like it will work to me.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 02/10/10 06:53 PM
Originally Posted By: hoegie
I have a question. If you have a changed circumstance, and you re-issue a new GFE, how long do you have to wait before you can close the loan? Also, does a change in the amount of certain fees (attorneys fees, appraisal fee, etc...) count as a changed circumstance?
1) No waiting period under RESPA, but you may need to redisclose under Reg Z and adhere to the appropriate waiting period under MDIA that went into effect last July;
2) Only if there is a "change of circumstance" as defined by HUD. For example, if the customer indicated that the property was a single family home and you disclosed your appraisal fee based on that info but later find out it is a multi unit leading to a higher appraisal fee, you could redisclose reflecting the higher fee.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 02/10/10 06:55 PM
Originally Posted By: hoegie
If you have a changed circumstance, and you re-issue a new GFE, how long do you have to wait before you can close the loan? Also, does a change in the amount of certain fees (attorneys fees, appraisal fee, etc...) count as a changed circumstance?
1. There is no delay between delivering the GFE and closing the loan. If a change affects the APR, MDIA requires a 3 day wait, but not RESPA.
2. A change in fees by themselves is not a changed circumstance. Why did the fee change? Maybe the cause of it is a changed circumstance.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 02/10/10 06:58 PM
The "Recommend Provider" list has no instructions. I would list the contact info and a disclaimer that indicates you don't warranty the service of the providers.
Posted By: DoorKey
Re: RESPA changes 1-1-10 - 02/10/10 07:02 PM
I forwarded my question to HUD regarding appraisal recertifications.
Here is the response from HUD:
If an appraisal recretification is performed by a third party and the lender selects the provider it is part of Block 3 of the GFE.
Here is the response from HUD:
If an appraisal recretification is performed by a third party and the lender selects the provider it is part of Block 3 of the GFE.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/10/10 07:05 PM
Originally Posted By: rsanders
Are there any requirements on what the list you give customers to pick from must look like for the services they can select?
no
Posted By: rsanders
Re: RESPA changes 1-1-10 - 02/10/10 07:09 PM
Thanks everyone.
Posted By: upstateNY
NCC Mortgages Again - 02/10/10 07:23 PM
I think this has been beaten to death, but we're still struggling. We pay all fees for a no closing cost mortgage, and for that the customer pays a slightly higher rate of interest. Included in Block 2 are charges that are subject to 10% tolerance. I have read and re-read Q&A page 27, question 4. It makes absolutely no sense to me that if the closing costs are less at settlement we cannot reduce the amount of the credit to reflect exactly what the bank is paying. We are still paying it, the customer is not effected in any way.
But I do have a question - included in the total credit in Block 2 of the GFE are fees that are subject to the 10% tolerance. Does that mean that we can still use the tolerances when calculating what we owe the customer? OR, since the $ in Block 2 can never change must we give the customer back the exact difference between the NCC fees disclosured on the GFE and what we actually paid.
And AARRGGHH!!!!!!!!! This is NUTS!!!!!!!!!!
But I do have a question - included in the total credit in Block 2 of the GFE are fees that are subject to the 10% tolerance. Does that mean that we can still use the tolerances when calculating what we owe the customer? OR, since the $ in Block 2 can never change must we give the customer back the exact difference between the NCC fees disclosured on the GFE and what we actually paid.
And AARRGGHH!!!!!!!!! This is NUTS!!!!!!!!!!
Posted By: slatts
Re: RESPA changes 1-1-10 - 02/10/10 07:30 PM
This is the question about pre-approvals I posed and was answered by HUD. The first time I posed the preapproval question, they just copied question 33 and answer, so I asked for further clarifiction:
Q)Thank you very much for responding. However it is the response to question 33 that we are seeking clarification on. Is HUD saying that a pre-approval application, which normally requires verified information but not a GFE since no property has been identified, is the same application once a property is eventually identified and would then have a GFE provided? Are we violating RESPA by treating them as 2 unrelated applications?
The clarification is needed by the industry. Some are continuing with this practice, others are taking the strict interpretation. Real estate brokers and first time homebuyer counselors are still telling potential applicants that they need the formal preapproval.
A) (from HUD) Pre-approvals necessitate the verfication of information that is not permitted prior to issuing the GFE, the borrower receiving the GFE and the borrower indicating the intent to proceed. There are a few caveats: the borrower may voluntarily provide certain documentation or the loan originator may use its own systems to verify.
As a pre-approval typically would precede a GFE depending on the process involved it may work or may not work as far as Rule compliance is concerned.
Q)Thank you very much for responding. However it is the response to question 33 that we are seeking clarification on. Is HUD saying that a pre-approval application, which normally requires verified information but not a GFE since no property has been identified, is the same application once a property is eventually identified and would then have a GFE provided? Are we violating RESPA by treating them as 2 unrelated applications?
The clarification is needed by the industry. Some are continuing with this practice, others are taking the strict interpretation. Real estate brokers and first time homebuyer counselors are still telling potential applicants that they need the formal preapproval.
A) (from HUD) Pre-approvals necessitate the verfication of information that is not permitted prior to issuing the GFE, the borrower receiving the GFE and the borrower indicating the intent to proceed. There are a few caveats: the borrower may voluntarily provide certain documentation or the loan originator may use its own systems to verify.
As a pre-approval typically would precede a GFE depending on the process involved it may work or may not work as far as Rule compliance is concerned.
Posted By: Princess Romeo
Re: NCC Mortgages Again - 02/10/10 07:34 PM
I guess that HUD's viewpoint is that the customer IS affected since you are charging a higher rate as compensation for covering the closing costs.
So this would be a time when you may want to Good-Faith-Guestimate on the low side of the charges so that you will not have an overage due to the customer.
The two areas where HUD has not done ANYONE (especially consumers) any favors are:
1. The craziness over Pre-Approvals since folks WANT to be pre-approved and not simply pre-qualed
2. The craziness on No-Cost Loans.
I think the issues could be cleared up if HUD would simply approve two qualifying statements to be added to the GFE or provided with a supplementary disclosure:
1. This Good Faith Estimate is being provided to accomodate your request to be pre-approved for a loan prior to your finding a property. Please be advised that the charges may increase or decrease depending on the value and location of the property you find. A new Good Faith Estimate will be issued once you have identified the property since we will be able to more accurately disclose your costs.
2. We are offering a "no-cost" loan which means that we are absorbing the costs normally associated with providing a mortgage loan. These costs include items such as Appraisal, Title Insurance, recording fees, documentation, notary, and courier. We are required to disclose our ESTIMATE of what these charges cost us, however if the actual cost of these items are lower than our estimate, we will not owe a refund to you. Your other choice would be to pay all of these costs separately.
Of course, these disclosure might actually be MEANINGFUL to a consumer and that seems to be something beyond HUD's comprehension.
Stepping down from soapbox...
So this would be a time when you may want to Good-Faith-Guestimate on the low side of the charges so that you will not have an overage due to the customer.
The two areas where HUD has not done ANYONE (especially consumers) any favors are:
1. The craziness over Pre-Approvals since folks WANT to be pre-approved and not simply pre-qualed
2. The craziness on No-Cost Loans.
I think the issues could be cleared up if HUD would simply approve two qualifying statements to be added to the GFE or provided with a supplementary disclosure:
1. This Good Faith Estimate is being provided to accomodate your request to be pre-approved for a loan prior to your finding a property. Please be advised that the charges may increase or decrease depending on the value and location of the property you find. A new Good Faith Estimate will be issued once you have identified the property since we will be able to more accurately disclose your costs.
2. We are offering a "no-cost" loan which means that we are absorbing the costs normally associated with providing a mortgage loan. These costs include items such as Appraisal, Title Insurance, recording fees, documentation, notary, and courier. We are required to disclose our ESTIMATE of what these charges cost us, however if the actual cost of these items are lower than our estimate, we will not owe a refund to you. Your other choice would be to pay all of these costs separately.
Of course, these disclosure might actually be MEANINGFUL to a consumer and that seems to be something beyond HUD's comprehension.
Stepping down from soapbox...
Posted By: upstateNY
Re: NCC Mortgages Again - 02/10/10 07:41 PM
Originally Posted By: Princess Rooney
I guess that HUD's viewpoint is that the customer IS affected since you are charging a higher rate as compensation for covering the closing costs.
So this would be a time when you may want to Good-Faith-Guestimate on the low side of the charges so that you will not have an overage due to the customer.
The two areas where HUD has not done ANYONE (especially consumers) any favors are:
1. The craziness over Pre-Approvals since folks WANT to be pre-approved and not simply pre-qualed
2. The craziness on No-Cost Loans.
I think the issues could be cleared up if HUD would simply approve two qualifying statements to be added to the GFE or provided with a supplementary disclosure:
1. This Good Faith Estimate is being provided to accomodate your request to be pre-approved for a loan prior to your finding a property. Please be advised that the charges may increase or decrease depending on the value and location of the property you find. A new Good Faith Estimate will be issued once you have identified the property since we will be able to more accurately disclose your costs.
2. We are offering a "no-cost" loan which means that we are absorbing the costs normally associated with providing a mortgage loan. These costs include items such as Appraisal, Title Insurance, recording fees, documentation, notary, and courier. We are required to disclose our ESTIMATE of what these charges cost us, however if the actual cost of these items are lower than our estimate, we will not owe a refund to you. Your other choice would be to pay all of these costs separately.
Of course, these disclosure might actually be MEANINGFUL to a consumer and that seems to be something beyond HUD's comprehension.
Stepping down from soapbox...
So this would be a time when you may want to Good-Faith-Guestimate on the low side of the charges so that you will not have an overage due to the customer.
The two areas where HUD has not done ANYONE (especially consumers) any favors are:
1. The craziness over Pre-Approvals since folks WANT to be pre-approved and not simply pre-qualed
2. The craziness on No-Cost Loans.
I think the issues could be cleared up if HUD would simply approve two qualifying statements to be added to the GFE or provided with a supplementary disclosure:
1. This Good Faith Estimate is being provided to accomodate your request to be pre-approved for a loan prior to your finding a property. Please be advised that the charges may increase or decrease depending on the value and location of the property you find. A new Good Faith Estimate will be issued once you have identified the property since we will be able to more accurately disclose your costs.
2. We are offering a "no-cost" loan which means that we are absorbing the costs normally associated with providing a mortgage loan. These costs include items such as Appraisal, Title Insurance, recording fees, documentation, notary, and courier. We are required to disclose our ESTIMATE of what these charges cost us, however if the actual cost of these items are lower than our estimate, we will not owe a refund to you. Your other choice would be to pay all of these costs separately.
Of course, these disclosure might actually be MEANINGFUL to a consumer and that seems to be something beyond HUD's comprehension.
Stepping down from soapbox...
Thanks for letting me vent. Just to clarify, the interest rate is the same whether the closing costs that we pay are $100.00 or $4,000.00. I know that makes no difference to HUD.
But how do we calculate the amount we owe the customer? Can we use the 10% tolerance?
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 02/10/10 07:50 PM
Originally Posted By: raitchjay
I've been under the impression Jay that if you give a GFE on a preapproval without a property address, you are assumed to have that property address, so your post about adjusting charges as needed including "changes that may be a result of defining a property" doesn't sound like it will work to me.
But that is just it... if they have not indicated any intent to proceed (we required signed), which generally in the terms of a preapproval they are not doing so until several days have passed, usually well over the 10 business days. Generally the intent is obtained once they locate a property and lock the rate.
Something is still bugging me about this though.
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 02/10/10 08:42 PM
Originally Posted By: Just Jay
Originally Posted By: David Dickinson
I've got just the opposite answer from HUD - and so did someone else that posted it to BOL. I'd love to see this in a FAQ from HUD so we stop getting conflicting answers.
I got two responses from HUD on this one, one said yes, one said no
ME TOO! I sent the question in last month and got one answer, then sent it in on Monday and got the opposite answer.
Posted By: Princess Romeo
Re: RESPA changes 1-1-10 - 02/10/10 08:45 PM
Here is my response copied and pasted from the thread about NCC Mortgages:
The two areas where HUD has not done ANYONE (especially consumers) any favors are:
1. The craziness over Pre-Approvals since folks WANT to be pre-approved and not simply pre-qualed
2. The craziness on No-Cost Loans.
I think the issues could be cleared up if HUD would simply approve two qualifying statements to be added to the GFE or provided with a supplementary disclosure:
1. This Good Faith Estimate is being provided to accomodate your request to be pre-approved for a loan prior to your finding a property. Please be advised that the charges may increase or decrease depending on the value and location of the property you find. A new Good Faith Estimate will be issued once you have identified the property since we will be able to more accurately disclose your costs.
2. We are offering a "no-cost" loan which means that we are absorbing the costs normally associated with providing a mortgage loan. These costs include items such as Appraisal, Title Insurance, recording fees, documentation, notary, and courier. We are required to disclose our ESTIMATE of what these charges cost us, however if the actual cost of these items are lower than our estimate, we will not owe a refund to you. Your other choice would be to pay all of these costs separately.
Of course, these disclosure might actually be MEANINGFUL to a consumer and that seems to be something beyond HUD's comprehension.
Stepping down from soapbox...
The two areas where HUD has not done ANYONE (especially consumers) any favors are:
1. The craziness over Pre-Approvals since folks WANT to be pre-approved and not simply pre-qualed
2. The craziness on No-Cost Loans.
I think the issues could be cleared up if HUD would simply approve two qualifying statements to be added to the GFE or provided with a supplementary disclosure:
1. This Good Faith Estimate is being provided to accomodate your request to be pre-approved for a loan prior to your finding a property. Please be advised that the charges may increase or decrease depending on the value and location of the property you find. A new Good Faith Estimate will be issued once you have identified the property since we will be able to more accurately disclose your costs.
2. We are offering a "no-cost" loan which means that we are absorbing the costs normally associated with providing a mortgage loan. These costs include items such as Appraisal, Title Insurance, recording fees, documentation, notary, and courier. We are required to disclose our ESTIMATE of what these charges cost us, however if the actual cost of these items are lower than our estimate, we will not owe a refund to you. Your other choice would be to pay all of these costs separately.
Of course, these disclosure might actually be MEANINGFUL to a consumer and that seems to be something beyond HUD's comprehension.
Stepping down from soapbox...
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 02/10/10 08:56 PM
Originally Posted By: OldSchoolBanker
JJR - if the origination charge is truly reflecting the cost to originate a loan, are the lender's costs different for a 50K loan versus a 500K loan?
We charge a flat fee with the only variables being loans with a subordination being higher.
We charge a flat fee with the only variables being loans with a subordination being higher.
What I am asking is if you charge a flat fee, lets say $1,000.00, does a person applying for a 50K loan and a person applying for a 500K loan both pay $1,000.00.
Currenty we charge 1% plus $300.00 so the 50K person would be charged $800.00 and the 500K person would be chrged 5,300.00. There is a big difference between 800 and 5300 so I was trying to figure out how the flat fee system works.
Posted By: Parker Wilson
Re: RESPA changes 1-1-10 - 02/10/10 08:57 PM
How do we disclose lender paid PMI? Do we show it in the borrower's column, and then give a lender credit on page 1?
Or do we even have to disclose it at all?
Or do we even have to disclose it at all?
Posted By: Parker Wilson
Re: RESPA changes 1-1-10 - 02/10/10 09:06 PM
Originally Posted By: Truffle Royale
If the survey is not a lender required service it does not go on the GFE nor does it go in a comparison chart on the HUD.
Here is the response I got from HUD regarding where to put a survey that the lender did not require.
"If the survey was not required by the lender or the title services provider, the blank line in the 1300s, the way you have it disclosed, looks perfect.
Line 1102 should not be itemized unless required by state law or a governmental loan program as it is not conducted by a third party."
Thanks,
Laura Gipe
Posted By: stella
Re: RESPA changes 1-1-10 - 02/11/10 06:37 PM
I have a loan that is closing and we are paying off 9 credit cards at closing. The title company is telling me they can't put the total payoff amount for the credit cards on page 1 of the HUD (which is where the payoff for the 1st mortgage goes) and then attach a page 4 "supplemental summary". They are telling me they have to put the total of credit card payouts on line 808.
That does not seem right to me...the TC is saying they can't put anything from page 1 of the HUD on the supplemental summary....
Thoughts anyone?
That does not seem right to me...the TC is saying they can't put anything from page 1 of the HUD on the supplemental summary....
Thoughts anyone?
Posted By: Cloud9
Re: RESPA changes 1-1-10 - 02/11/10 07:00 PM
FlamingoGal and 80's Lady,
Did you ever receive a response on your questions concerning ARM loans and the Summary of Your Loan section of GFE?
Did you ever receive a response on your questions concerning ARM loans and the Summary of Your Loan section of GFE?
Posted By: upstateNY
Re: NCC Mortgages Again - 02/11/10 07:57 PM
Originally Posted By: Princess Rooney
I guess that HUD's viewpoint is that the customer IS affected since you are charging a higher rate as compensation for covering the closing costs.
So this would be a time when you may want to Good-Faith-Guestimate on the low side of the charges so that you will not have an overage due to the customer.
The two areas where HUD has not done ANYONE (especially consumers) any favors are:
1. The craziness over Pre-Approvals since folks WANT to be pre-approved and not simply pre-qualed
2. The craziness on No-Cost Loans.
I think the issues could be cleared up if HUD would simply approve two qualifying statements to be added to the GFE or provided with a supplementary disclosure:
1. This Good Faith Estimate is being provided to accomodate your request to be pre-approved for a loan prior to your finding a property. Please be advised that the charges may increase or decrease depending on the value and location of the property you find. A new Good Faith Estimate will be issued once you have identified the property since we will be able to more accurately disclose your costs.
2. We are offering a "no-cost" loan which means that we are absorbing the costs normally associated with providing a mortgage loan. These costs include items such as Appraisal, Title Insurance, recording fees, documentation, notary, and courier. We are required to disclose our ESTIMATE of what these charges cost us, however if the actual cost of these items are lower than our estimate, we will not owe a refund to you. Your other choice would be to pay all of these costs separately.
Of course, these disclosure might actually be MEANINGFUL to a consumer and that seems to be something beyond HUD's comprehension.
Stepping down from soapbox...
So this would be a time when you may want to Good-Faith-Guestimate on the low side of the charges so that you will not have an overage due to the customer.
The two areas where HUD has not done ANYONE (especially consumers) any favors are:
1. The craziness over Pre-Approvals since folks WANT to be pre-approved and not simply pre-qualed
2. The craziness on No-Cost Loans.
I think the issues could be cleared up if HUD would simply approve two qualifying statements to be added to the GFE or provided with a supplementary disclosure:
1. This Good Faith Estimate is being provided to accomodate your request to be pre-approved for a loan prior to your finding a property. Please be advised that the charges may increase or decrease depending on the value and location of the property you find. A new Good Faith Estimate will be issued once you have identified the property since we will be able to more accurately disclose your costs.
2. We are offering a "no-cost" loan which means that we are absorbing the costs normally associated with providing a mortgage loan. These costs include items such as Appraisal, Title Insurance, recording fees, documentation, notary, and courier. We are required to disclose our ESTIMATE of what these charges cost us, however if the actual cost of these items are lower than our estimate, we will not owe a refund to you. Your other choice would be to pay all of these costs separately.
Of course, these disclosure might actually be MEANINGFUL to a consumer and that seems to be something beyond HUD's comprehension.
Stepping down from soapbox...
Thanks, I saw your post. But still wonder if we can use the tolerance rules in calculating what we owe the borrower when NCC are less at the time of closing than what is disclosred on the GFE.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 02/11/10 08:07 PM
Originally Posted By: stella
I have a loan that is closing and we are paying off 9 credit cards at closing. The title company is telling me they can't put the total payoff amount for the credit cards on page 1 of the HUD (which is where the payoff for the 1st mortgage goes) and then attach a page 4 "supplemental summary". They are telling me they have to put the total of credit card payouts on line 808.
That does not seem right to me...the TC is saying they can't put anything from page 1 of the HUD on the supplemental summary....
Thoughts anyone?
That does not seem right to me...the TC is saying they can't put anything from page 1 of the HUD on the supplemental summary....
Thoughts anyone?
Section L (including the 800s) is for settlement services. The CC's should be listed in the 100s.
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 02/11/10 08:22 PM
Originally Posted By: Cloud9
FlamingoGal and 80's Lady,
Did you ever receive a response on your questions concerning ARM loans and the Summary of Your Loan section of GFE?
Did you ever receive a response on your questions concerning ARM loans and the Summary of Your Loan section of GFE?
I preface this by stating that I got the following answer from HUD, but another bank got a different answer (what else is new), and I've read varying opinions here and elsewhere, so take it for what it's worth....
Although stated previously, just so you can look at this one item and see both the question and the answer together, I've reposted the question we presented to HUD:
Question:
Our question relates to how to properly complete the "Summary Of Your Loan" section of the new GFE for an ARM loan - specifically, the payment fields that come at first adjustment and the maximum the payment can rise to over the life of the loan.
On Page 1 of the GFE, in the "Summary of your loan" section, the 7th box down asks: "Even if you make your payment on time, can your monthly amount owed for P & I , and any mortgage insurance rise?" On an adjustable rate loan, this will be answered "yes, the first increase can be in __(#1)___ months and the monthly amount owed can rise to $ (#2) . The maximum it can ever rise to is $ (#3)." My questions are relating to the blanks listed as 1, 2 & 3.
Let's say it's a 5 year adjustable on a 30 year note, with caps of 1% each adjustment, 5% cap over life of loan. Rate starting at 6.00% .
Obviously #1 will show 60 months. (side bar - should have said 61 mos.)
#2 will have a payment amount that it will be what it adjusts to at the 5 year point at the 1% adjustment. I need to know what balance this payment is to be calculated from: the current balance at the 5 year point (amortized balance), or the original loan amount? The original loan amount doesn't make sense to me, but we are getting three different figures from 3 different mortgage systems and can't tell what that payment is to be calculated from. I have not been able to find guidance on this in the regulation, instructions to the GFE, or in the FAQ.
#3 is to show what the maximum monthly amount it can ever rise to. Again...what balance is to be used to calculate this payment? On that loan scenario above, the max rate is could go up to would be 11.00% over the life of the loan...what balance is used to calculate that payment?
HUD's Answer:
Quote:
The amounts to be disclosed in your scenario are:
#2: This amount is the maximum amount the monthly PIMI could rise to at the time of first payment change. This would be based upon applying the maximum rate that could occur at that time of the change to the maximum principal that could occur at the change. If in your example the loan does not allow for interest only or negative amortization, then the amortized principal balance at the time of change would be the maximum principal amount.
#3 Similarly the amount in this block is the maximum PIMI that could ever occur during the life of the loan. This would be based upon any combination of maximum principal and maximum interest rate throughout the life of the loan. Again if in your example the loan does not contain any interest only or negative amortization features then the scheduled amortization would be used in the calculation.
PIMI= Principal, Interest and any Mortgage Insurance
Kevin Stevens
Program Specialist
U.S. Dept of Housing & Urban Development
Office of RAMH
#2: This amount is the maximum amount the monthly PIMI could rise to at the time of first payment change. This would be based upon applying the maximum rate that could occur at that time of the change to the maximum principal that could occur at the change. If in your example the loan does not allow for interest only or negative amortization, then the amortized principal balance at the time of change would be the maximum principal amount.
#3 Similarly the amount in this block is the maximum PIMI that could ever occur during the life of the loan. This would be based upon any combination of maximum principal and maximum interest rate throughout the life of the loan. Again if in your example the loan does not contain any interest only or negative amortization features then the scheduled amortization would be used in the calculation.
PIMI= Principal, Interest and any Mortgage Insurance
Kevin Stevens
Program Specialist
U.S. Dept of Housing & Urban Development
Office of RAMH
Posted By: jlroberts
Re: RESPA changes 1-1-10 - 02/11/10 09:11 PM
I think HUD has block my email address.......
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 02/11/10 09:13 PM
Maybe your total number of emails exceeded their tolerance.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 02/11/10 09:22 PM
I just got an answer back today I sent on December 30th!
totally forgot I sent that question, and it was a good one!
totally forgot I sent that question, and it was a good one!
Posted By: Princess Romeo
Re: RESPA changes 1-1-10 - 02/11/10 09:59 PM
Originally Posted By: Just Jay
I just got an answer back today I sent on December 30th!
totally forgot I sent that question, and it was a good one!
totally forgot I sent that question, and it was a good one!
So are you going to share?
Posted By: QueenBB
Re: RESPA changes 1-1-10 - 02/11/10 10:35 PM
So....a broker issued a GFE for a fixed rate loan, then asked us to make the loan. We would consider an ARM, but not a fixed rate. I don't believe this is a changed circumstance. Is there any way to issue a new GFE? Do we deny the loan? Make a counteroffer? Is there a way for the customer to request a new GFE? Does a different product constitute a different GFE?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 02/11/10 10:47 PM
I struggle with this too as the FAQ do state "IF you accept the GFE". I believe you have the right to not accept the application from the broker.
You could also counter-offer the customer and if they accept your count-offer, you have a borrower requested change (a changed circumstance).
You could also counter-offer the customer and if they accept your count-offer, you have a borrower requested change (a changed circumstance).
Posted By: Brock
Re: RESPA changes 1-1-10 - 02/12/10 03:48 PM
I have two questions regarding changed circumstances.
1) The first has to do with appraisal charges. My company deals primarily with VA loans. Sometimes the VA will select an appraiser outside of the area where the property is located. My question is whether or not it would be an acceptable changed circumstance to increase the appraisal fee for milage charges that are charged by the appraiser? As a side note there is really no way for the lender to know where the appraiser will come from or if they are going to charge for mileage at the time the GFE is issued. Any help would be appreciated.
2) My second question is a little more complicated. My company operates as both a direct lender and a mortgage broker. There are situations when a loan is initially intended to be underwritten and closed in the name of our company but for one reason or another we cannot do the loan. So we now want to send the loan to an outside lender. The question is could this be considered a changed circumstance? I know HUD has stated that non-acceptace of a broker issued GFE by a lender does not consitute a changed circumstance, but this seems to be a different situation. Of course the real problem here is that there is no yield spread disclosed on our in house loan where it would have to be disclosed on the brokered loan. What we would like to do is add the ysp to block 1 and give the credit in block 2 as a result of this changed circumstance. Any help would be appreciated.
1) The first has to do with appraisal charges. My company deals primarily with VA loans. Sometimes the VA will select an appraiser outside of the area where the property is located. My question is whether or not it would be an acceptable changed circumstance to increase the appraisal fee for milage charges that are charged by the appraiser? As a side note there is really no way for the lender to know where the appraiser will come from or if they are going to charge for mileage at the time the GFE is issued. Any help would be appreciated.
2) My second question is a little more complicated. My company operates as both a direct lender and a mortgage broker. There are situations when a loan is initially intended to be underwritten and closed in the name of our company but for one reason or another we cannot do the loan. So we now want to send the loan to an outside lender. The question is could this be considered a changed circumstance? I know HUD has stated that non-acceptace of a broker issued GFE by a lender does not consitute a changed circumstance, but this seems to be a different situation. Of course the real problem here is that there is no yield spread disclosed on our in house loan where it would have to be disclosed on the brokered loan. What we would like to do is add the ysp to block 1 and give the credit in block 2 as a result of this changed circumstance. Any help would be appreciated.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 02/12/10 04:07 PM
Brock, I sent this question to HUD the other day. Depending on what the reason is that your bank can't do the loan, this might answer your second question above.
Q: The borrower still wants a 30 yr fixed rate loan. After the original GFE has been delivered, there is a changed circumstance in the loan that makes it no longer qualify for the original product offered. We have to find another investor willing to make the loan. Normally this means a change in fees and/or rate because we are no longer able to give the borrower the best possible rate that Investor A offered.
A: It seems like if there was a change in the borrower's eligibility it could be considered a changed circumstance affecting loan and a revised GFE could be provided.
As to your first question, everything that I've read says mileage charges that raise an appraisal fee do not qualify for a changed circumstance. That's why a lot of lenders are high balling the appraisal fee. Makes absolutely no sense if the intent of this new RESPA was to allow comparison shopping, I know. But that's DUHHUD for ya'.
Q: The borrower still wants a 30 yr fixed rate loan. After the original GFE has been delivered, there is a changed circumstance in the loan that makes it no longer qualify for the original product offered. We have to find another investor willing to make the loan. Normally this means a change in fees and/or rate because we are no longer able to give the borrower the best possible rate that Investor A offered.
A: It seems like if there was a change in the borrower's eligibility it could be considered a changed circumstance affecting loan and a revised GFE could be provided.
As to your first question, everything that I've read says mileage charges that raise an appraisal fee do not qualify for a changed circumstance. That's why a lot of lenders are high balling the appraisal fee. Makes absolutely no sense if the intent of this new RESPA was to allow comparison shopping, I know. But that's DUHHUD for ya'.
Posted By: Bville
Re: RESPA changes 1-1-10 - 02/12/10 05:47 PM
Where are subordination fees supposed to go on the GFE?
Posted By: Em
Construction-RESPA - 02/12/10 06:03 PM
We are doing a 9 month construction loan with no permanent commitment and the owner already owns the lot. Am I correct, that RESPA would not apply in this case and we would NOT have the use the new HUD, we can simply do a disbursement summary? THANKS
Posted By: RR Joker
Re: Construction-RESPA - 02/12/10 06:04 PM
yes, Em, you are safe!
err..one caveat, IMO, however. If they are going to be paying out WITH permanent financing, we would require a commitment from whomever, otherwise we "may" be doing the Perm by default and in that case, we would disclose both.
err..one caveat, IMO, however. If they are going to be paying out WITH permanent financing, we would require a commitment from whomever, otherwise we "may" be doing the Perm by default and in that case, we would disclose both.
Posted By: Em
Re: RESPA changes 1-1-10 - 02/12/10 06:04 PM
I believe Subordination Fee to 3rd party is located in Block 3, line 808.
Posted By: Em
Re: Construction-RESPA - 02/12/10 06:08 PM
Thank you. I get your point about the permanent.
Posted By: manylayers
Re: Construction-RESPA - 02/15/10 07:42 PM
Yet another changed circumstance question;
We have a customer that we approved with one of our investors sent out the GFE...he accepted, but then rates dropped with another investor of ours....customer comes back and says he wants to do the loan but with the investor offering the lower rate. Mostly, that's OK, except that this investor requires a more expensive appraisal.
Based upon HUD's FAQ page 18 xiii, I'm thinking maybe we CAN issue the revised GFE with the increased appraisal cost...but I wanted to be sure.
Thank you!
We have a customer that we approved with one of our investors sent out the GFE...he accepted, but then rates dropped with another investor of ours....customer comes back and says he wants to do the loan but with the investor offering the lower rate. Mostly, that's OK, except that this investor requires a more expensive appraisal.
Based upon HUD's FAQ page 18 xiii, I'm thinking maybe we CAN issue the revised GFE with the increased appraisal cost...but I wanted to be sure.
Thank you!
Posted By: Mrs. Rizzo
Re: Construction-RESPA - 02/15/10 07:59 PM
You could go with borrower requested changes and do a changed circumstance. Only fees relating to the CC would be changed and I'm thinking the tolerances would still apply.
Posted By: Dan Persfull
Re: Construction-RESPA - 02/15/10 08:11 PM
You need to read on down to xv on page 18:
xv) A mortgage broker issues a GFE based on one lender‘s loan products and origination fees, but places the loan with a different lender.
A: No, this would not constitute a changed circumstance.
I would question whether you have a changed circumstance.
I don't think you can rely on a "customer requested change" in this instance. Any customer is going to go with a cheaper interest rate if you offer it to them. So what's to keep you from estimating the cheapest closing costs based on the higher rate and then "bait and switch" them after they agree to proceed. Oh BTW, we have this cheaper product but your appraisal is going to be $600 instead of $400.
IMO you don't have a changed circumstance in this scenario.
xv) A mortgage broker issues a GFE based on one lender‘s loan products and origination fees, but places the loan with a different lender.
A: No, this would not constitute a changed circumstance.
I would question whether you have a changed circumstance.
I don't think you can rely on a "customer requested change" in this instance. Any customer is going to go with a cheaper interest rate if you offer it to them. So what's to keep you from estimating the cheapest closing costs based on the higher rate and then "bait and switch" them after they agree to proceed. Oh BTW, we have this cheaper product but your appraisal is going to be $600 instead of $400.
IMO you don't have a changed circumstance in this scenario.
Posted By: Truffle Royale
Re: Construction-RESPA - 02/15/10 08:16 PM
This is what kills me about the new RESPA.
Look at the answer I got from HUD above. Apparently if the borrower doesn't qualify for one investor's product, they say it IS a changed circumstance to switch investors.
BUT, if a good borrower wants to take advantage of a better interest rate it's NOT a changed circumstance?!
How does that work, exactly?
Look at the answer I got from HUD above. Apparently if the borrower doesn't qualify for one investor's product, they say it IS a changed circumstance to switch investors.
BUT, if a good borrower wants to take advantage of a better interest rate it's NOT a changed circumstance?!
How does that work, exactly?
Posted By: ComplyFunatic
Re: Construction-RESPA - 02/15/10 08:23 PM
Broker's GFE shows the credit for the YSP, however he simply for got to add it into the origination charges. :-o The loan hasn't locked yet. When the loan locks, it will be a changed circumstance, but the broker will not be able to then ADD a YSP in the orgination charges, right???
Posted By: Dan Persfull
Re: Construction-RESPA - 02/15/10 08:36 PM
The changes don't keep the customer from taking advantage of the better rate, it just prevents you from the bait and switch tactic. And the customer's credit quality has nothing to do with this particular change in rates.
That was one of the ploys used by unscrupulous brokers. They would quote the fees based on the higher rate then once they had the applicant hooked they would offer them a 1/8 to 1/2 percent lower rate if they wanted to pay higher fees which instead of $200 as in my example it was usually $2,000 to $4,000.
The only thing the borrower is requesting changed is the interest rate so the only fees that could be revised would be the fees that are dependent on the interest rate.
If the product is the same (30 year fixed for example) and the only difference is the investor and the fees then I don't think you can argue the borrower is changing products. However, if they are going to a different product, such as fixed to variable then you could possibly rely on the following from page 26:
8) Q: When the interest rate goes from float to rate lock, may Block 1 on the GFE change?
A: No. However, Block 1 can increase due to a changed circumstance if the change affects the loan amount and all or a portion of the Origination Charges were calculated as a percentage of the loan amount. Block 1 may also increase if the borrower either requests a different loan product or the borrower is no longer eligible for the loan product contained in the initial GFE, but is eligible for a different loan product.by the interest rate.
That was one of the ploys used by unscrupulous brokers. They would quote the fees based on the higher rate then once they had the applicant hooked they would offer them a 1/8 to 1/2 percent lower rate if they wanted to pay higher fees which instead of $200 as in my example it was usually $2,000 to $4,000.
The only thing the borrower is requesting changed is the interest rate so the only fees that could be revised would be the fees that are dependent on the interest rate.
If the product is the same (30 year fixed for example) and the only difference is the investor and the fees then I don't think you can argue the borrower is changing products. However, if they are going to a different product, such as fixed to variable then you could possibly rely on the following from page 26:
8) Q: When the interest rate goes from float to rate lock, may Block 1 on the GFE change?
A: No. However, Block 1 can increase due to a changed circumstance if the change affects the loan amount and all or a portion of the Origination Charges were calculated as a percentage of the loan amount. Block 1 may also increase if the borrower either requests a different loan product or the borrower is no longer eligible for the loan product contained in the initial GFE, but is eligible for a different loan product.by the interest rate.
Posted By: manylayers
Re: Construction-RESPA - 02/15/10 08:40 PM
I see your point....I think our customer just wants the lower rate..the first product he accepted required only a drive-by appraisal...but the investor that he now wants to go with requires a full walk through...which will cost more.
Thankfully, we are only a few bucks outside of tolerance..so will pay the difference...and be much more cautious about borrowers wanting to switch products...
thank you all for the good discussion!!!
Thankfully, we are only a few bucks outside of tolerance..so will pay the difference...and be much more cautious about borrowers wanting to switch products...
thank you all for the good discussion!!!
Posted By: ahou
Re: Construction-RESPA - 02/15/10 11:37 PM
Very often the recording fee quoted on the HUD-1 at closing will differ from the actual billing we get later(after closing) from the clerk of court.
Do we need to revise the HUD-1 to show the actual fee? (since the bank will have to pay the difference)
If so, is this an acceptable way to disclose the increase:
example: $50 shown on HUD-1 and $52 on actual billing
On line 1201 we put the final charge of $52 in the borrower column and a credit on line 204. Or do we put $50 in the borrower column, with POC(L) $2 outside the column - with nothing on the 1st page?
Do we need to revise the HUD-1 to show the actual fee? (since the bank will have to pay the difference)
If so, is this an acceptable way to disclose the increase:
example: $50 shown on HUD-1 and $52 on actual billing
On line 1201 we put the final charge of $52 in the borrower column and a credit on line 204. Or do we put $50 in the borrower column, with POC(L) $2 outside the column - with nothing on the 1st page?
Posted By: Brock
Re: Construction-RESPA - 02/16/10 03:22 PM
"..the first product he accepted required only a drive-by appraisal...but the investor that he now wants to go with requires a full walk through."
manylayers, I think this fact may alter the determination of whether or not there is a changed circumstance. This statement makes it seem like you are doing more than just switching lenders. It makes it seem like you are switching loan programs. And certainly switching loan programs would qualify as a changed circumstance and I would think that an increased appraisal cost is a reasonable cost to be affected by such a switch. I think what Dan was concerned with was just the fact of switching lenders alone would not allow you to increase the appraisal cost without any change the actual appraisal service being performed. But when you start talking about a requirement for a more extensive appraisal, that sounds like it could work. I think the point here is that in order to make a real determination we need all the facts. These are complicated questions and one little fact can make all the difference. All that being said, your gut reaction to eat the difference might still be the most prudent course of action.
manylayers, I think this fact may alter the determination of whether or not there is a changed circumstance. This statement makes it seem like you are doing more than just switching lenders. It makes it seem like you are switching loan programs. And certainly switching loan programs would qualify as a changed circumstance and I would think that an increased appraisal cost is a reasonable cost to be affected by such a switch. I think what Dan was concerned with was just the fact of switching lenders alone would not allow you to increase the appraisal cost without any change the actual appraisal service being performed. But when you start talking about a requirement for a more extensive appraisal, that sounds like it could work. I think the point here is that in order to make a real determination we need all the facts. These are complicated questions and one little fact can make all the difference. All that being said, your gut reaction to eat the difference might still be the most prudent course of action.
Posted By: Brock
Re: Construction-RESPA - 02/16/10 04:54 PM
Can anyone tell me what they are doing to adjust to the new GFE application requirements. We have been sending out the 1003, state disclosures, and program specific disclosures prior to obtaining a property address from the borrower and then only required a signed intent to proceed statement once a property address is obtained. We recently had one lender say they wanted all new signed disclosures. Anyone have any thoughts? Advice?
Posted By: trout22
Re: Construction-RESPA - 02/16/10 05:24 PM
I have a title company who just informed us that they can't issue a HUD under the new 2010 rules until they have a 2010 GFE - which is perfectly understandable except, this is a business loan (granted, it's for a consumer under her SSN) and we did not issue a GFE. My understanding is that RESPA excludes business purpose loans even if it is for a 1-4 family residential property? Our borrower is purchasing this as an investment to renovate and flip for a profit. Has anyone else run into this with their title company - and if so, how did you resolve it? I've given them an excerpt from RESPA's section 3500.5 explaining coverage/exemptions and Reg Z's section 226.3(a)(1) for the definition of a business purpose loan, just waiting on a reply. Anything else I should consider? Am I missing something? Thanks!
Posted By: RR Joker
Re: Construction-RESPA - 02/16/10 05:47 PM
Curiously, trout...you say this is for investment to renovate and flip...is this person in the business to do this? Is it supported by tax returns? If not, I'd consider this a personal investment rather than a business investment and would disclose it as a consumer loan.
If it truly is business, there's no need for a SS to be completed, so I'm not sure what the issue really is.
If it truly is business, there's no need for a SS to be completed, so I'm not sure what the issue really is.
Posted By: trout22
Re: Construction-RESPA - 02/16/10 05:56 PM
I haven't received full details yet, so maybe my understanding of the purpose was not correct. The lender told me it was documented and correct as a business purpose loan, but I will confirm once I get the docs myself Thanks for pointing that out!
I can certainly see where the title companies want to be careful about using the new HUD correctly, and I appreciate that.
Thanks for pointing that out!I can certainly see where the title companies want to be careful about using the new HUD correctly, and I appreciate that.
Posted By: RR Joker
Re: Construction-RESPA - 02/16/10 06:03 PM
Yes, it would be impossible to complete a new (2010) SS without the corresponding GFE.
For non-RESPA loans, I would rather see just a simple closing statement prepared, if anything.
About the purpose, trout...this is one of THE most frequent mistakes a LO makes, IMO. Calling it business, when it's not. In all due respect..it really can be confusing.
For non-RESPA loans, I would rather see just a simple closing statement prepared, if anything.
About the purpose, trout...this is one of THE most frequent mistakes a LO makes, IMO. Calling it business, when it's not. In all due respect..it really can be confusing.
Posted By: swiggles
Re: Construction-RESPA - 02/16/10 06:17 PM
Seriously! Who is going to nit pick this? House flipping doesn't have to be the borrower's main source of income. Perhaps it's the borrower's first splash and dash loan. And who's to say exactly how often a person must buy and sell before the practice is considered "business worthy?" Once per year?....10 times per year?....depending upon what market, what community? Our fix and flip loans are all considered business purpose.
Posted By: trout22
Re: Construction-RESPA - 02/16/10 06:38 PM
In our situation, the title company is the driving force behind this issue.
Upon further review, this is the borrower's first investment property, so no tax returns from prior endeavors. We'll take the LO's determination as he's the one who worked with the customer and has the best understanding of the actual purpose.
Update - I was able to speak to the title company's compliance person and apparently it was a bit of a misunderstanding... when they heard 'investment' they interpreted that as a personal loan instead of a business investment. With that information, they agreed that a GFE was not necessary. In the end, we got it all straightened out.
Thanks so much for all the input - I totally agree that purpose coding is anything but an exact science with all the variables involved!
Upon further review, this is the borrower's first investment property, so no tax returns from prior endeavors. We'll take the LO's determination as he's the one who worked with the customer and has the best understanding of the actual purpose.
Update - I was able to speak to the title company's compliance person and apparently it was a bit of a misunderstanding... when they heard 'investment' they interpreted that as a personal loan instead of a business investment. With that information, they agreed that a GFE was not necessary. In the end, we got it all straightened out.
Thanks so much for all the input - I totally agree that purpose coding is anything but an exact science with all the variables involved!
Posted By: swiggles
Re: Construction-RESPA - 02/16/10 06:41 PM
Fortunately for me, I didn't make the decision to call all of 'em business loans, and so I won't have to defend the decision should an examiner decide to "nit pick."
Posted By: RR Joker
Re: Construction-RESPA - 02/16/10 07:10 PM
swiggles, if you read the commentary for business purpose, I wouldn't considering this nit picking.
Posted By: swiggles
Re: Construction-RESPA - 02/16/10 07:30 PM
Yes, I've read it....many times. Like I said, fortunately I did not make the decision about how my bank will treat loans to purchase investment (non-rental) property. I expect we'll see what pans out during an exam.........
Posted By: RR Joker
Re: Construction-RESPA - 02/16/10 07:31 PM
It can easily become hit and miss, since during compliance exams they review very little on the "commercial" side anyway. We're just pretty strict where compliance is concerned. That ole "spirit and intent" thing.
Posted By: ahou
Re: Construction-RESPA - 02/17/10 02:15 PM
Originally Posted By: ahou
Very often the recording fee quoted on the HUD-1 at closing will differ from the actual billing we get later(after closing) from the clerk of court.
Do we need to revise the HUD-1 to show the actual fee? (since the bank will have to pay the difference)
If so, is this an acceptable way to disclose the increase:
example: $50 shown on HUD-1 and $52 on actual billing
On line 1201 we put the final charge of $52 in the borrower column and a credit on line 204. Or do we put $50 in the borrower column, with POC(L) $2 outside the column - with nothing on the 1st page?
Do we need to revise the HUD-1 to show the actual fee? (since the bank will have to pay the difference)
If so, is this an acceptable way to disclose the increase:
example: $50 shown on HUD-1 and $52 on actual billing
On line 1201 we put the final charge of $52 in the borrower column and a credit on line 204. Or do we put $50 in the borrower column, with POC(L) $2 outside the column - with nothing on the 1st page?
Here's HUD's response:
If the cure pertains to an item in the 0 or no tolerance category, the actual "cured" amount may replace the previously out of tolerance amount on page 3 of the HUD-1.
If the cure pertains to the 10% aggregate tolerance category, the amount may be listed on page 3 in the category as a negative number. See below:
From the FAQs, Tolerance Cures:
14) Q: In some areas the deed and deed of trust are recorded after a transaction closes and funds. If the actual amount of transfer taxes increases and the settlement agent later collects the increase from the borrower, would this be a tolerance violation even if it occurred after settlement?
A: Yes. Whether settlement charges are collected before, during or after settlement, if the charge exceeds the tolerance threshold, there is a tolerance violation.
15) Q: In some areas the deed and deed of trust are recorded after a transaction closes and funds. If the settlement agent pays the difference to get on record and intends to collect the increase from the borrower, may the lender reimburse the settlement agent directly to cure the potential tolerance violation?
A: If the settlement agent pays the difference in transfer tax on behalf of the borrower, the lender may reimburse the settlement agent. The settlement agent must prepare a revised HUD-1 showing the cure of the potential tolerance violation and send the revised HUD-1 to the parties in the transaction, as appropriate.
Posted By: Brock
Re: Construction-RESPA - 02/17/10 03:42 PM
Can someone give me some insight on how they are handling signatures on other required disclosures under the new GFE rules? Our stance is on a purchase transaction we will send out all disclosures with the exception of the GFE when the person wants to become prequalified. Then when the person has an address we require the GFE to be disclosed and an intent to proceed form to be signed and returned. The problem I am running into is that some investors are questioning why all the other disclosures are signed at a different time from the intent to proceed form. Are other people running into this? Is there any legal reason to require all disclosures (including the 1003) to be resigned after the GFE is delivered?
Posted By: swiggles
Re: Construction-RESPA - 02/17/10 05:26 PM
Originally Posted By: RR joker
It can easily become hit and miss, since during compliance exams they review very little on the "commercial" side anyway. We're just pretty strict where compliance is concerned. That ole "spirit and intent" thing.
Management here doesn't know the meaning of the words.....prefers to wait 'til stung....then adapt. If a reg doesn't say "you must do this in this exact manner" (black and white), they're going to go least amount of compliance first....see what examiners say. Grrr....
Posted By: nelender
Re: Construction-RESPA - 02/17/10 05:44 PM
In the 1/28/10 Q&A's, Q#30 on pg 10 and Q#4 on pg 21 both say that "Important Date" #4 on the GFE should state "NA" if the rate is locked. Q#6 on pg 21 states that "Important Date" #4 should state "NA" if a rate lock is not offered. This would seem to suggest that #4 should be NA in every case, but I can't imagine that was HUD's intention. Has anyone seen a clarification of this issue?
Posted By: Brock
Re: Construction-RESPA - 02/17/10 07:33 PM
You would enter a number in block four when you issue the GFE prior to locking (floating) and you require the person to lock a certain number of days prior to closing.
Posted By: Pounder
Re: Construction-RESPA - 02/17/10 08:47 PM
Was not sure where to put this questions-RESPA or Reg Z (HPML).
Our loan officers determine a HPML at loan approval with the APR in effect at that time and again re-verifying at consummation with the final APR.
If loan is not a HPML, we would not require an escrow account and this would be reflected on the GFE as “NO we do not require an escrow account for your loan”, however, at consummation a loan is determined to be a HPML now requiring escrow. Am I correct that this should not affect the GFE ? Am I comparing apples to oranges?
Our loan officers determine a HPML at loan approval with the APR in effect at that time and again re-verifying at consummation with the final APR.
If loan is not a HPML, we would not require an escrow account and this would be reflected on the GFE as “NO we do not require an escrow account for your loan”, however, at consummation a loan is determined to be a HPML now requiring escrow. Am I correct that this should not affect the GFE ? Am I comparing apples to oranges?
Posted By: KimD
Re: Construction-RESPA - 02/17/10 09:38 PM
Two Questions:
Our bank receives loan applications thru an online service with a property address, but not a legal description. A disclosure is give to the customer online with an estimated charge for a survey of $600.00. After we contact the customer and find out what the legal description is and it is for more than a lot and block legal (metes & bounds) can we increase the survey charge and re-disclose to the customer. Would this be considered a change circumstance?
The estimated charge for an appraisal in our immediate area is $450.00. Occasionally we may do a loan for property located 75 miles or more from our area and the appraiser may charge a lot more for the appraisal. Would this be considered a change circumstance since this is outside out our normal lending area?
Our bank receives loan applications thru an online service with a property address, but not a legal description. A disclosure is give to the customer online with an estimated charge for a survey of $600.00. After we contact the customer and find out what the legal description is and it is for more than a lot and block legal (metes & bounds) can we increase the survey charge and re-disclose to the customer. Would this be considered a change circumstance?
The estimated charge for an appraisal in our immediate area is $450.00. Occasionally we may do a loan for property located 75 miles or more from our area and the appraiser may charge a lot more for the appraisal. Would this be considered a change circumstance since this is outside out our normal lending area?
Posted By: Still Smiling
Re: Construction-RESPA - 02/17/10 09:47 PM
Pounder, I can see how it would affect the loan amount if you agree to finance the initial amout of the escrow reserve. I think if your loan amount changes, this changes the recording charge, so I think it would be a changed circumstance. Any thoughts anyone?
Posted By: jlroberts
Re: Construction-RESPA - 02/18/10 01:45 AM
Originally Posted By: Pounder
Was not sure where to put this questions-RESPA or Reg Z (HPML).
Our loan officers determine a HPML at loan approval with the APR in effect at that time and again re-verifying at consummation with the final APR.
If loan is not a HPML, we would not require an escrow account and this would be reflected on the GFE as “NO we do not require an escrow account for your loan”, however, at consummation a loan is determined to be a HPML now requiring escrow. Am I correct that this should not affect the GFE ? Am I comparing apples to oranges?
Our loan officers determine a HPML at loan approval with the APR in effect at that time and again re-verifying at consummation with the final APR.
If loan is not a HPML, we would not require an escrow account and this would be reflected on the GFE as “NO we do not require an escrow account for your loan”, however, at consummation a loan is determined to be a HPML now requiring escrow. Am I correct that this should not affect the GFE ? Am I comparing apples to oranges?
That is a changed circumstance and requires a new GFE within three buisness days. There is no waiting period to close. It is entirely possible to have a changed circumstance at the closing table, issue a new GFE and continue with the closing.
Posted By: RR Joker
Re: Construction-RESPA - 02/18/10 03:54 PM
Originally Posted By: jlroberts
Originally Posted By: Pounder
Was not sure where to put this questions-RESPA or Reg Z (HPML).
Our loan officers determine a HPML at loan approval with the APR in effect at that time and again re-verifying at consummation with the final APR.
If loan is not a HPML, we would not require an escrow account and this would be reflected on the GFE as “NO we do not require an escrow account for your loan”, however, at consummation a loan is determined to be a HPML now requiring escrow. Am I correct that this should not affect the GFE ? Am I comparing apples to oranges?
Our loan officers determine a HPML at loan approval with the APR in effect at that time and again re-verifying at consummation with the final APR.
If loan is not a HPML, we would not require an escrow account and this would be reflected on the GFE as “NO we do not require an escrow account for your loan”, however, at consummation a loan is determined to be a HPML now requiring escrow. Am I correct that this should not affect the GFE ? Am I comparing apples to oranges?
That is a changed circumstance and requires a new GFE within three buisness days. There is no waiting period to close. It is entirely possible to have a changed circumstance at the closing table, issue a new GFE and continue with the closing.
Unless, of course, if the new APR threw it out of the APR tolerance threshold!
Posted By: Brock
Re: Construction-RESPA - 02/18/10 05:05 PM
What is the penalty if the a revised GFE is not provided for a changed circumstance but the only thing that actually changed is the important dates section? I want to comply, but providing a new GFE just to tell the borrower that they have to close in 30 days in order to get the particular rate (when our company honors the rate anyway once the rate is locked - no extension fees) seems rediculous.
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 02/18/10 09:12 PM
I really thought I had read this somewhere - either here, in an email from HUD, in the FAQ....somewhere, but I can't seem to find that "somewhere" anywhere! Did a search of my email, search of the threads - apparently I'm not using the right search terms. I really thought it was an email from HUD, but today they are giving me a conflicting answer - which was combined with some other answers that conflict with the FAQ...so...I'm checking with the better experts....
1) No rate lock - Put "NA" on GFE for lines 1, 3, 4. I say yes, believe FAQs say yes. HUD said no in an email today - that line 1 must always have a date.
2) If your rate remains floating until closing, do you ever have to give a revised GFE? I would not think so, and I was pretty sure HUD had said no (still looking for that email) - otherwise, you could be issuing a GFE at the closing table along with the HUD-1. Today via email, HUD says you must eventually issue a revised GFE since the rate locks at some point even if its at the last minute. Our rates RARELY ever change from the time the loan officer puts it on a worksheet until closing, but periodically they do - we've determined that just because it's on a worksheet doesn't make it locked, so we've gone to lock agreements any time the rate is locked - without the agreement, the rate is considered floating.
1) No rate lock - Put "NA" on GFE for lines 1, 3, 4. I say yes, believe FAQs say yes. HUD said no in an email today - that line 1 must always have a date.
2) If your rate remains floating until closing, do you ever have to give a revised GFE? I would not think so, and I was pretty sure HUD had said no (still looking for that email) - otherwise, you could be issuing a GFE at the closing table along with the HUD-1. Today via email, HUD says you must eventually issue a revised GFE since the rate locks at some point even if its at the last minute. Our rates RARELY ever change from the time the loan officer puts it on a worksheet until closing, but periodically they do - we've determined that just because it's on a worksheet doesn't make it locked, so we've gone to lock agreements any time the rate is locked - without the agreement, the rate is considered floating.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 02/19/10 03:15 PM
From Compliance Coach:
Line 1. Insert the date (and time, if applicable) until which the stated interest rate will be available. If this does not apply, enter NA
Line 3. Enter the rate lock period in calendar days. If this does not apply, enter NA
Line 4. Specify the minimum number of days before settlement that the rate must be locked. If this does not apply, enter NA.
From the FAQ’s:
5)
Q: If a lender does not offer a rate lock, how should Line 1 in the Important dates 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.
From Vicki Botts, “In plain English” presentation, the only time there should be an NA is in line 4 after a rate lock.
Line 1. Insert the date (and time, if applicable) until which the stated interest rate will be available. If this does not apply, enter NA
Line 3. Enter the rate lock period in calendar days. If this does not apply, enter NA
Line 4. Specify the minimum number of days before settlement that the rate must be locked. If this does not apply, enter NA.
From the FAQ’s:
5)
Q: If a lender does not offer a rate lock, how should Line 1 in the Important dates 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.
From Vicki Botts, “In plain English” presentation, the only time there should be an NA is in line 4 after a rate lock.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 02/19/10 06:23 PM
Is it just me or is HUD beginning to sound like a bunch of dithering fools?
Kinda like that kids game where you sit in a circle and one person whispers something in the next one's ear and it keeps going around and the last person says what the first person did except it NEVER comes out to be that?
All this contradiction between FAQ and HUD answers and training is driving me bug nuts!
Kinda like that kids game where you sit in a circle and one person whispers something in the next one's ear and it keeps going around and the last person says what the first person did except it NEVER comes out to be that?
All this contradiction between FAQ and HUD answers and training is driving me bug nuts!
Posted By: ahkcompliance
Re: RESPA changes 1-1-10 - 02/22/10 03:56 PM
We just had a loan that we need to cure on. This is a refinance. Can you show a cure on a HUD 1A or do we have to use the HUD 1?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/22/10 05:49 PM
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.
Posted By: TryN2Comply
Re: RESPA changes 1-1-10 - 02/22/10 09:23 PM
Originally Posted By: ahkcompliance
We just had a loan that we need to cure on. This is a refinance. Can you show a cure on a HUD 1A or do we have to use the HUD 1?
You have to use a HUD-1 for tolerance cures.
Posted By: TryN2Comply
Re: RESPA changes 1-1-10 - 02/22/10 09:34 PM
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?
Posted By: Ninky
Re: RESPA changes 1-1-10 - 02/22/10 11:14 PM
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?
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 02/23/10 01:25 AM
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.”
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/23/10 01:55 PM
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.
We generally feel our rates ARE available for some amount of time, so that's why we don't generally use NA.
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - 02/23/10 01:58 PM
Thank you, RRJoker - had a short brief of panic.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 02/23/10 02:06 PM
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.
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.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/23/10 02:11 PM
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"! I prefer the date/time approach.
I prefer the date/time approach.
Posted By: Pounder
Re: RESPA changes 1-1-10 - 02/23/10 05:47 PM
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".
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".
Posted By: ahou
Re: RESPA changes 1-1-10 - 02/24/10 01:13 PM
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.
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.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 02/24/10 02:49 PM
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.
Posted By: tcredle
Re: RESPA changes 1-1-10 - 02/24/10 09:43 PM
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?
Does anyone have any suggestions?
Posted By: HTP
Re: RESPA changes 1-1-10 - 02/24/10 11:28 PM
I agree with the Fair Lending potential problem your process could cause.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/25/10 04:19 PM
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?
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.
Posted By: Kahola
Re: RESPA changes 1-1-10 - 02/25/10 04:29 PM
FHLMC Delivery fees
In Block 1 we do include any FHLMC add-ons here. Do we need to inlcude FHLMC's delivery fee?
In Block 1 we do include any FHLMC add-ons here. Do we need to inlcude FHLMC's delivery fee?
Posted By: Moman
Re: RESPA changes 1-1-10 - 02/25/10 05:22 PM
Dovetailing into Kahola's question - should block 1 includ the FHLMC Loan Prospector (or DU) fee paid by the bank?
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 02/25/10 06:01 PM
MoMan In my opinion these are lender processing fees and underwriting fees which are block 1. FAQ page 25 answers this question.
Posted By: OldSchoolBanker
Re: RESPA changes 1-1-10 - 02/25/10 06:06 PM
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.
If your auditors are inflexible - recommend an email to HUD to get clarification.
Posted By: SuperBanker
Re: RESPA changes 1-1-10 - 02/25/10 08:09 PM
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?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 02/25/10 08:13 PM
Calculate the total interest that could be due if all principal is advanced. That's your monthly payment.
Posted By: SuperBanker
Re: RESPA changes 1-1-10 - 02/25/10 08:32 PM
Would you divide it by the number of months the loan would be outstanding?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 02/25/10 09:09 PM
Yes. Or just caluclate the monthly amount on the entire principal.
Posted By: MyScamper
Re: RESPA changes 1-1-10 - 02/26/10 04:20 PM
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?
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?
Posted By: pacar
Re: RESPA changes 1-1-10 - 02/26/10 05:59 PM
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?
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?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 02/26/10 07:02 PM
[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.
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.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 02/26/10 07:03 PM
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.
Our lists given from the secondary market vs the "traditional" lender are not necessarily the same list.
Posted By: pacar
Re: RESPA changes 1-1-10 - 02/26/10 07:09 PM
OK. Now I'm really confused.
From the HUD Website:
Section 9 of RESPA prohibits a seller from requiring the home buyer to use a particular title insurance company, either directly or indirectly, as a condition of sale. Buyers may sue a seller who violates this provision for an amount equal to three times all charges made for the title insurance
How can we require the providor and not be in violation? Am I trying to compare an apple to a carrot?
From the HUD Website:
Section 9 of RESPA prohibits a seller from requiring the home buyer to use a particular title insurance company, either directly or indirectly, as a condition of sale. Buyers may sue a seller who violates this provision for an amount equal to three times all charges made for the title insurance
How can we require the providor and not be in violation? Am I trying to compare an apple to a carrot?
Posted By: pacar
Re: RESPA changes 1-1-10 - 02/26/10 07:12 PM
...also, I just finished listening to an archived webinar on the HUD site. In that, the presenter stated that if you did not include the providor on the list it would be presumed that the price on the GFE would be accurate for all providors and, as such, would be a 0% tolerance.
I need to go home....my head hurts...
I need to go home....my head hurts...
Posted By: Kathleen O. Blanchard
Re: RESPA changes 1-1-10 - 02/26/10 07:13 PM
You are not the seller, unless you are selling bank-owned property.
Posted By: pacar
Re: RESPA changes 1-1-10 - 02/26/10 07:17 PM
Thanks, KB, for pointing out the terminology I missed. That makes sense.
However, MN does have a statute that reads:
(a) No real estate salesperson, broker, attorney, auctioneer, builder, title company, financial institution, or other person making a mortgage loan may require a person to use any particular licensed attorney, real estate broker, real estate salesperson, or real estate closing agent in connection with a residential real estate closing.
My understanding is that Title Services are a part of this, so I'm still stuck with having them shop....I think.
However, MN does have a statute that reads:
(a) No real estate salesperson, broker, attorney, auctioneer, builder, title company, financial institution, or other person making a mortgage loan may require a person to use any particular licensed attorney, real estate broker, real estate salesperson, or real estate closing agent in connection with a residential real estate closing.
My understanding is that Title Services are a part of this, so I'm still stuck with having them shop....I think.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 02/26/10 07:57 PM
Have you tried contacting the MN Bankers Association on the statute vs RESPA? We do some loans in MN so I'd be thankful if you would pm me or post any guidance they give you.
If it turns out the law requires you must give them a choice, let's look at a theoretical application to Lender Joe who likes to use title company A.
For this loan, you put the title costs, including closing, mortgage policy, etc., in Block 4.
You put the cost of the owners policy in Block 5.
You give the borrower a list with just the name of company A on it.
The list has language on it that tells them they can go with company A or choose their own.
If they stay with A, you have 10% tolerance on the fees.
If they go with any other company, (even if it's a company another lender at your bank likes to use) you do not have to worry about tolerance on this loan.
If it turns out the law requires you must give them a choice, let's look at a theoretical application to Lender Joe who likes to use title company A.
For this loan, you put the title costs, including closing, mortgage policy, etc., in Block 4.
You put the cost of the owners policy in Block 5.
You give the borrower a list with just the name of company A on it.
The list has language on it that tells them they can go with company A or choose their own.
If they stay with A, you have 10% tolerance on the fees.
If they go with any other company, (even if it's a company another lender at your bank likes to use) you do not have to worry about tolerance on this loan.
Posted By: pacar
Re: RESPA changes 1-1-10 - 02/26/10 08:07 PM
TR -
I have posted this to the MBA, and also a state compliance group. I will certainly PM you when I get the responses.
I have posted this to the MBA, and also a state compliance group. I will certainly PM you when I get the responses.
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - FHA disallow. fee - 02/26/10 08:28 PM
I did a search, and haven't really seen anything specifically on this. When we have a charge "typically" payable by a borrower, we will include it on the GFE. Then, if the seller's paying the fee, on the HUD-1, we'll show it as a credit in the 200 series with the offset on the seller's side in the 500 series - all per the FAQs.
However, what do you do in the case of an FHA loan where you have a fee that FHA says you cannot charge to the borrower - the sellers always pay it ("disallowable" fee - i.e. tax service)? To me, it seams that would mean you would not put it on the GFE since that is supposed to represent the fees the borrower typically pays - in a "normal" transaction, yes the borrower would typically pay it, but for an FHA loan, the borrower would never pay it. I'm reviewing HUD Mortgagee Letter 2009-53, and it seems to support still showing these kinds of fees on the GFE. Because of this and the FAQs, we've been putting it on the GFE, but it just seems odd to if the borrower will never pay it on an FHA loan.
Thoughts?
However, what do you do in the case of an FHA loan where you have a fee that FHA says you cannot charge to the borrower - the sellers always pay it ("disallowable" fee - i.e. tax service)? To me, it seams that would mean you would not put it on the GFE since that is supposed to represent the fees the borrower typically pays - in a "normal" transaction, yes the borrower would typically pay it, but for an FHA loan, the borrower would never pay it. I'm reviewing HUD Mortgagee Letter 2009-53, and it seems to support still showing these kinds of fees on the GFE. Because of this and the FAQs, we've been putting it on the GFE, but it just seems odd to if the borrower will never pay it on an FHA loan.
Thoughts?
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - FHA disallow. fee - 03/01/10 02:25 PM
Just a note to add to this - I did email HUD and ask the question, and they told me to contact FHA. I don't agree that it's a question for FHA - I think it's question of proper GFE/HUD-1 completion that should be able to be answered by HUD, but what are you going to do?
I don't agree that it's a question for FHA - I think it's question of proper GFE/HUD-1 completion that should be able to be answered by HUD, but what are you going to do?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - FHA disallow. fee - 03/01/10 02:50 PM
FlamingoGal, that 'seems' to pertain to Block 1 and 2 charges. Since Tax service is a block 3 charge and it's required to be paid by the seller, I would not show it. It's a 10% tolerance, it will be a seller charge, so there is no harm done and your numbers are a bit more accurate.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - FHA disallow. fee - 03/01/10 03:41 PM
Flamingo, I think I'd treat it the same way I do fees that state law says the seller must pay and leave them off the GFE. If questioned by examiners, I'd use that as my support argument too. Not doing FHA yet tho it is in our future, I'm told.
Posted By: mmason
Re: RESPA changes 1-1-10 - 03/01/10 09:49 PM
Originally Posted By: David Dickinson
[quote=Will B]If we failed to disclose Owners Title Insurance on the GFE then we have to cure it on the HUD-1. But what if it's being by the seller? Do we still have to issue the cure to the borrower?
Quote:
This cure thing is my new focus issue too.
If the charge is NOT to the borrower, why would you have to reimburse them?
If there is a fee that is added on at the last minute but the bank elects to pay it, you redisclose the GFE but mark the HUD POCL, right? what's to reimburse?
If the charge is NOT to the borrower, why would you have to reimburse them?
If there is a fee that is added on at the last minute but the bank elects to pay it, you redisclose the GFE but mark the HUD POCL, right? what's to reimburse?
There's a lot of things that bother me with the new RESPA rule, but this one takes the take. HUD says (my paraphrase) "it doesn't matter who paid the fee. You said this is the cost/credit. If if you're outside of tolerance, you must reimburse the borrower."
Concerning owners title policy, what if it is on a refinance? We don't include an estimate on the GFE for refis, but what if the customer decides they want it? Does it still go in the 10% tolerance section on the comparisom chart on the HUD?
Posted By: CalifDreamin
Re: RESPA changes 1-1-10 - FHA disallow. fee - 03/01/10 11:14 PM
Originally Posted By: RR joker
FlamingoGal, that 'seems' to pertain to Block 1 and 2 charges. Since Tax service is a block 3 charge and it's required to be paid by the seller, I would not show it. It's a 10% tolerance, it will be a seller charge, so there is no harm done and your numbers are a bit more accurate.
Quote:
Flamingo, I think I'd treat it the same way I do fees that state law says the seller must pay and leave them off the GFE. If questioned by examiners, I'd use that as my support argument too. Not doing FHA yet tho it is in our future, I'm told.
Yes, that's what I thought, too, until I read HUD's Response (had to read it again to be sure) - they don't really answer it directly per se, but she does say ALL fees must go on the GFE.
HUD's Answer:
Quote:
RESPA states that all lender required third party charges must be disclosed on the GFE.
RESPA cannot speak to FHA guidelines.
For all FHA mortgage related questions, you should contact the FHA Resource Center http://www.hud.gov/offices/hsg/sfh/fharesourcectr.cfm. In the future, you may contact them by calling 1-800-CALL FHA (1-800-225-5342), select option 2 for housing industry, then 3; or by email info@fhaoutreach.com.
RESPA cannot speak to FHA guidelines.
For all FHA mortgage related questions, you should contact the FHA Resource Center http://www.hud.gov/offices/hsg/sfh/fharesourcectr.cfm. In the future, you may contact them by calling 1-800-CALL FHA (1-800-225-5342), select option 2 for housing industry, then 3; or by email info@fhaoutreach.com.
That just doesn't make any sense. Can I just pretend she didn't answer that way, and do it the way I think we should do it (same as y'all stated above) until this is answered in the FAQs?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - FHA disallow. fee - 03/02/10 12:56 AM
Quote:
RESPA states that all lender required third party charges must be disclosed on the GFE.
I'm relatively certain HUD isn't keeping track of which banks contacted them and what they replied, especially in light of the contradictory stuff we've gotten from them.
It sounds to me like the person at HUD gave you a blanket 'RESPA says' followed by a punt to FHA. We've all gotten similar non-answers from HUD-RESPA and been left to muddle through.
imho, you're overreading the response from HUD. Write FHA and see what they say. You might start a seperate thread on this topic and see if someone else doing FHA responds with their way of doing it.
Posted By: ComplyFunatic
Re: RESPA changes 1-1-10 - FHA disallow. fee - 03/02/10 01:14 AM
Flamingo - it is in a FAQ - Page 11 Q 32 - the answer states all 3rd party services must be listed on the GFE and on the HUD-1 regardless of who pays for them.
Hard enough for us Compliance folks to get it... anyone else getting grief from the sales/processing/closing staff??? On top of that... some of us have to try and make sure Brokers are in compliance!
Anyone working with Brokers? We charge the brokers a flat fee which they include in Block 1. I have explained to staff that the lender paid fees that would be in Block 3 should be itemized there and should be shown as POC on the HUD-1. The fees would also be a part of the 10% tolerance bucket on page three. Staff does NOT want to do this saying that they feel the customer is being charged twice since its part of the Block 1/801 lump sum fee. Furthermore... they for sure think I am crazy for telling them that the Borrower would get a refund if the 10% bucket is out of tolerance, even if the seller or lender paid the fee.
UGH! I thought we'd have this figured out by now! Ha!
Hard enough for us Compliance folks to get it... anyone else getting grief from the sales/processing/closing staff??? On top of that... some of us have to try and make sure Brokers are in compliance!
Anyone working with Brokers? We charge the brokers a flat fee which they include in Block 1. I have explained to staff that the lender paid fees that would be in Block 3 should be itemized there and should be shown as POC on the HUD-1. The fees would also be a part of the 10% tolerance bucket on page three. Staff does NOT want to do this saying that they feel the customer is being charged twice since its part of the Block 1/801 lump sum fee. Furthermore... they for sure think I am crazy for telling them that the Borrower would get a refund if the 10% bucket is out of tolerance, even if the seller or lender paid the fee.
UGH! I thought we'd have this figured out by now! Ha!
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - FHA disallow. fee - 03/02/10 01:29 AM
I think the length of this thread proves that nothing is as cut and dried as presented.
We are NOT showing the Transfer Tax on GFEs for loans in states that the law says the seller must pay.
I stand by my statement that I don't think this FHA fee should be shown on the GFE either because it CANNOT be paid by the borrower.
We are NOT showing the Transfer Tax on GFEs for loans in states that the law says the seller must pay.
I stand by my statement that I don't think this FHA fee should be shown on the GFE either because it CANNOT be paid by the borrower.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - FHA disallow. fee - 03/02/10 01:50 PM
I also concur with TR with those fees that are prohibited by whomever's "law".
ComplyFuntic...are you saying you are putting the broker fee in Block 1 AND in Block 3? I would NOT agree with that. All lender fees (including the broker) should be in Block 1. YSP's, however, would be in block 2.
ComplyFuntic...are you saying you are putting the broker fee in Block 1 AND in Block 3? I would NOT agree with that. All lender fees (including the broker) should be in Block 1. YSP's, however, would be in block 2.
Posted By: Mortimer
Requiring escrow for existing loans - 03/02/10 03:12 PM
We have several customers who have trouble paying their real estate taxes so we end up paying them. Can we force an existing account to establish an escrow?
Posted By: ComplyFunatic
Re: Requiring escrow for existing loans - 03/02/10 03:21 PM
RR - I agree with you totally, the broker fee does go in Block 1; YSP in Block 2, but if we (the lender) cover the cost of the appraisal, credit report, flood determination and tax sevice fee (non-processing and admin fees)it should show in Block 3 according to the FAQ # 32 on page 11. And if it's in Block 3... it becomes part of the 10% tolerance.
Posted By: David Dickinson
Re: Requiring escrow for existing loans - 03/02/10 04:13 PM
Originally Posted By: FABulous
We have several customers who have trouble paying their real estate taxes so we end up paying them. Can we force an existing account to establish an escrow?
Yes, but review your loan contract first.
Posted By: mmason
Re: Requiring escrow for existing loans - 03/02/10 04:23 PM
I have a couple of questions regarding owner's title insurance.
1) We do not need to show an amount for owner's title insurance for refinance, but what if the customer does end up wanting it? Is that a change circumstance and we issue a new GFE?
2) We do construction/perm mortgages. I'm assuming we do need to disclose the owner's title insurance on the GFE since this is considered a purchase?
1) We do not need to show an amount for owner's title insurance for refinance, but what if the customer does end up wanting it? Is that a change circumstance and we issue a new GFE?
2) We do construction/perm mortgages. I'm assuming we do need to disclose the owner's title insurance on the GFE since this is considered a purchase?
Posted By: David Dickinson
Re: Requiring escrow for existing loans - 03/02/10 04:47 PM
1. Voluntary fees are not listed on the GFE. Therefore, you wouldn't issue a new GFE - not a changed circumstance.
2. Yes.
2. Yes.
Posted By: KimD
Re: Requiring escrow for existing loans - 03/02/10 09:15 PM
After the rate is locked and there is a changed circumstance that does not effect the APR tolerance, does the lender have to wait 3 day before the loan can be closed?
New construction loans-Does the 60 day disclosure mean that the lender must give the new GFE, no later than 60 days prior to closing, or with in 60 days of closing?
If the Doc. Prep. Fee is included in the Origination charges and the seller pays a portion of the cost at closing, does the lender show a credit in Blk 2 of the GFE or is a credit shown on the page 1 of the HUD I.
New construction loans-Does the 60 day disclosure mean that the lender must give the new GFE, no later than 60 days prior to closing, or with in 60 days of closing?
If the Doc. Prep. Fee is included in the Origination charges and the seller pays a portion of the cost at closing, does the lender show a credit in Blk 2 of the GFE or is a credit shown on the page 1 of the HUD I.
Posted By: Dan Persfull
Re: Requiring escrow for existing loans - 03/02/10 09:19 PM
There is no waiting period on a revised GFE unless mailed, then you must allow 3 business days for receipt.
60 days prior to closing.
Show a credit in the 200 series on the HUD 1.
60 days prior to closing.
Show a credit in the 200 series on the HUD 1.
Posted By: #Just Jay
Re: Requiring escrow for existing loans - 03/02/10 11:56 PM
I am not sure who I am more frustrated with right now: HUD and their backward rules and competing answers from different reps to the same question (I emailed 2 questions to them before I left for vacation and had 5 replys when I got back... 2 differing ones for each question I asked, and another from a question I asked 6 weeks ago and already got an answer on, but the new answer contradicts the first answer ), or our crazy secondary market investor from the SUNny south that I do not totally TRUST right now, who is making up their own settlement statement requirements, TIL requirements, and making us reimburse borrowers or take the loan back when they do not like how we listed a cost, even though I have email proof from HUD endorsing/directing our decision!!!!
I wish we only did commercial lending... I can handle flood and ECOA.
), or our crazy secondary market investor from the SUNny south that I do not totally TRUST right now, who is making up their own settlement statement requirements, TIL requirements, and making us reimburse borrowers or take the loan back when they do not like how we listed a cost, even though I have email proof from HUD endorsing/directing our decision!!!!I wish we only did commercial lending... I can handle flood and ECOA.
Posted By: Truffle Royale
Re: Requiring escrow for existing loans - 03/03/10 12:39 AM
I think those Sunny changes contributed to the mother of all migraines I got today. We just got rid of the Appraisal Receipt and now I have to bring it back and show fully indexed ARM rates, etc., ad nauseum. Of course they know they're the only game in town so we have no choice but to comply with their 'make it up at our whim' garbage. Yea, JJ, I truly FEEL your pain.
Posted By: CalifDreamin
Re: Requiring escrow for existing loans - 03/03/10 02:03 PM
We are in the exact same boat Just Jay and it's very frustrating for all of us....making our jobs way more stressful than they really should be. When staff asks questions, now I always begin the response with - TODAY....but I can't guarantee what the answer might be tomorrow....and forget what I told you yesterday......I'm just thankful to have the emails from HUD to validate the insanity.
Posted By: #Just Jay
Re: Requiring escrow for existing loans - 03/03/10 02:07 PM
So what are you doing when an investor starts to act like this... we almost feel that we have to extend the same 'rules' to our other investor and portfolio loans as well, otherwise we risk making mistakes, and really musk up the processors and closers. So frustrating... Like Truff said though, in terms of pricing, really the only game in town right now.
Posted By: Truffle Royale
Re: Requiring escrow for existing loans - 03/03/10 03:56 PM
Flamingo, I've taken to using a line my father used to use...subject to change without notice.
We're still stewing but will probably go with adding it for all loans just like you are, JJ. What other option do we have, really?
This is just BS. That Sunny unTrustworthy place must be jealous of the government's new hoops so they decided to get their own for us to jump thru. Maybe if enough of us make enough noise we can get them to reconsider? No, huh?
We're still stewing but will probably go with adding it for all loans just like you are, JJ. What other option do we have, really?
This is just BS. That Sunny unTrustworthy place must be jealous of the government's new hoops so they decided to get their own for us to jump thru. Maybe if enough of us make enough noise we can get them to reconsider? No, huh?
Posted By: alwood
Re: Requiring escrow for existing loans - 03/03/10 03:58 PM
Originally Posted By: Dan Persfull
There is no waiting period on a revised GFE unless mailed, then you must allow 3 business days for receipt.
Can you point me to where it says you have to wait until receipt? I acknowledge that the GFE must be received before fees are charged, but as far as redisclosure after a changed circumstance goes, I read RESPA to say that the GFE just has to be "provided."
Posted By: Dan Persfull
Re: Requiring escrow for existing loans - 03/03/10 04:54 PM
You have to provide the GFE before you can charge any fees, other than a credit report fee, and if there are changed circumstance you have to provide a revised GFE if you wish to change the affected fees.
I did misquote in sayng business days. It's acutally calendar days.
3500.7(b)(4)
If the GFE is mailed to the applicant, the applicant is considered to have received the GFE 3 calendar days after it is mailed, not including Sundays and the legal public holidays specified in 5 U.S.C. 6103(a).
However, note that is says Sundays and Holidays are not included.
I did misquote in sayng business days. It's acutally calendar days.
3500.7(b)(4)
If the GFE is mailed to the applicant, the applicant is considered to have received the GFE 3 calendar days after it is mailed, not including Sundays and the legal public holidays specified in 5 U.S.C. 6103(a).
However, note that is says Sundays and Holidays are not included.
Posted By: cougann mom
Re: Requiring escrow for existing loans - 03/03/10 05:11 PM
I attended the RESPA webinar last week and it stated that title insurance should be disclosed on the GFE for all purchase transactions. What if the bank does not require title insurance on purchase transactions? Should we treat this as a transaction not requiring title insurance?
Posted By: RR Joker
Re: Requiring escrow for existing loans - 03/03/10 06:57 PM
I would say "no". If you don't disclose it, but they purchase it...you're hurting yourself worse than them. You can explain that it's up to them, however.
Posted By: Dan Persfull
Re: Requiring escrow for existing loans - 03/03/10 07:13 PM
I'm not aware that title insurance in block 4 has to be disclosed as part of the title services if not required however Owners Title Insurance in Block 5 has to be disclosed on all purchase transactions regardless whether it's required or who is paying for it.
Posted By: ahou
Re: Requiring escrow for existing loans - 03/04/10 01:10 PM
After the loan closes we are getting bills that are higher than disclosed on the HUD-1.
For example, the appraisal at closing shows the fee as $50, but when the bill comes in the fee is $75. The credit in block 2 of the HUD-1 is listed as -$50. Can the bank collect the $25 difference?
What about the zero tolerance concept - the bank would have to refund the $25? If the bank cannot collect the $25 and must refund $25 to the customer because of the zero tolerance - the bank would be out $50.
For example, the appraisal at closing shows the fee as $50, but when the bill comes in the fee is $75. The credit in block 2 of the HUD-1 is listed as -$50. Can the bank collect the $25 difference?
What about the zero tolerance concept - the bank would have to refund the $25? If the bank cannot collect the $25 and must refund $25 to the customer because of the zero tolerance - the bank would be out $50.
Posted By: David Dickinson
Re: Requiring escrow for existing loans - 03/04/10 02:30 PM
One of the FAQs (in the tolerance section) states you must refund even if the bill comes in after closing.
Can you collect after closing - good question. Once the loan is closed, I don't know how you could. What if the borrower refuses to pay it? You've disclosed the fees (to the best of your ability) and the borrower closed with that info. I don't think it's legal to come back to them and say they owe.
Can you collect after closing - good question. Once the loan is closed, I don't know how you could. What if the borrower refuses to pay it? You've disclosed the fees (to the best of your ability) and the borrower closed with that info. I don't think it's legal to come back to them and say they owe.
Posted By: Sage
Re: Requiring escrow for existing loans - 03/04/10 02:39 PM
But is it a "refund" if the buyer/customer never paid it?
Posted By: David Dickinson
Re: Requiring escrow for existing loans - 03/04/10 03:19 PM
Good point. I believe RESPA is saying you must put the actual #'s on the Settlement Statement and tolerance tables - even if after closing. If you learn that these "new" fee is out of tolerance, you MUST issue a new SS and check to the borrower.
Look at FAQ #3 in the "Section 4 & 5" section. It does say "charges are collected" though.
Also, look at FAQ #13 in the same section - the BORROWER must receive the tolerance correction . . .no matter who pays for it.
Look at FAQ #3 in the "Section 4 & 5" section. It does say "charges are collected" though.
Also, look at FAQ #13 in the same section - the BORROWER must receive the tolerance correction . . .no matter who pays for it.
Posted By: cougann mom
Re: Requiring escrow for existing loans - 03/04/10 04:04 PM
refering to question on owner's title insurance for purchase transactions: the bank states in most cases this is not purchased by any party. How would u disclose that on the HUD -1, if you are required to disclose it on the GFE. Give an updated GFE?
Posted By: RR Joker
Re: Requiring escrow for existing loans - 03/04/10 04:06 PM
If none was purhased, you would show the estimate in the GFE column and zero in the HUD column.
Posted By: ahou
Re: Requiring escrow for existing loans - 03/04/10 06:55 PM
The credit in block 2 is -100. In a partial cost loan, a 3rd party fee we are paying increased $50 on the HUD-1. Do we also increase the credit on line 802 to -150 on the HUD-1 and show the increase as -150 on the comparison chart?
Posted By: Will B
Re: RESPA changes 1-1-10 - 03/04/10 06:58 PM
Originally Posted By: MarieR
In prepareing our first HUD 1 with lenders title insurance we have run across an issue I'd appreciate some feedback on.
On line 1104 we listed the total for lender's title insurance premium. Then on lines 1106 and 1107 we listed the portion of the premium being paid to the agent and underwriter respectfully. The problem is that there are taxes included in the total premium on 1104 that are not accounted for on lines 1106/1107 so they do not total line 1104.
My question - do these lines have to total or do we need to disclose this tax on a blank line in the 1100 series? Given the fact that most of the HUD doesn't make sense to me and HUD doesn't seem to care if the final receipant is listed, I am leaning toward not needing to seperate out the tax as long as it is included in the total premium amount on line 1104. I have emialed HUD for their answer, but wanted to check here to get opinions.
Thanks
On line 1104 we listed the total for lender's title insurance premium. Then on lines 1106 and 1107 we listed the portion of the premium being paid to the agent and underwriter respectfully. The problem is that there are taxes included in the total premium on 1104 that are not accounted for on lines 1106/1107 so they do not total line 1104.
My question - do these lines have to total or do we need to disclose this tax on a blank line in the 1100 series? Given the fact that most of the HUD doesn't make sense to me and HUD doesn't seem to care if the final receipant is listed, I am leaning toward not needing to seperate out the tax as long as it is included in the total premium amount on line 1104. I have emialed HUD for their answer, but wanted to check here to get opinions.
Thanks
Did HUD respond to your email, or does anyone else know the answer to this? It's not clear whether the taxes on the title insurance premium should be part of the misc items that go into 1101 without being separately itemized, or go in 1104, or get split between 1107 & 1108.
Thanks
Posted By: Reed
Re: RESPA changes 1-1-10 - 03/04/10 07:04 PM
From the FAQs - What is meant by "initial loan amount."?
Am I the only one amused by the punctuation errors in the FAQs? (The above example is particularly painful.)
If there's anything that says "we rushed this thing" more than 57 pages of FAQs, it's 57 pages of FAQs with typos.
Am I the only one amused by the punctuation errors in the FAQs? (The above example is particularly painful.)
If there's anything that says "we rushed this thing" more than 57 pages of FAQs, it's 57 pages of FAQs with typos.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 03/04/10 08:02 PM
Two Quick questions.
Construction inspection fees on HUD
1. They go on line 808 but are NOT included in the 801 total?
2. The inspection fees are not a FC and therefore not included in the APR per 226.4(c)(7)(iv)?
Thanks
Construction inspection fees on HUD
1. They go on line 808 but are NOT included in the 801 total?
2. The inspection fees are not a FC and therefore not included in the APR per 226.4(c)(7)(iv)?
Thanks
Posted By: ahou
Re: RESPA changes 1-1-10 - 03/04/10 08:02 PM
Originally Posted By: ahou
The credit in block 2 is -100. In a partial cost loan, a 3rd party fee we are paying increased $50 on the HUD-1. Don't we also increase the credit on line 802 to -150 on the HUD-1 and show the increase as -150 on the comparison chart?
bump
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/04/10 08:15 PM
Originally Posted By: DD Regs
Two Quick questions.
Construction inspection fees on HUD
1. They go on line 808 but are NOT included in the 801 total? If they are performed by the appraiser or other third party, correct. They are a "required provider"
2. The inspection fees are not a FC and therefore not included in the APR per 226.4(c)(7)(iv)? So long as they are done prior to closing...yes. If they are done after closing, they are.
Thanks
Construction inspection fees on HUD
1. They go on line 808 but are NOT included in the 801 total? If they are performed by the appraiser or other third party, correct. They are a "required provider"
2. The inspection fees are not a FC and therefore not included in the APR per 226.4(c)(7)(iv)? So long as they are done prior to closing...yes. If they are done after closing, they are.
Thanks
Posted By: MarieR
Re: RESPA changes 1-1-10 - 03/04/10 08:16 PM
Originally Posted By: Will B
Originally Posted By: MarieR
In prepareing our first HUD 1 with lenders title insurance we have run across an issue I'd appreciate some feedback on.
On line 1104 we listed the total for lender's title insurance premium. Then on lines 1106 and 1107 we listed the portion of the premium being paid to the agent and underwriter respectfully. The problem is that there are taxes included in the total premium on 1104 that are not accounted for on lines 1106/1107 so they do not total line 1104.
My question - do these lines have to total or do we need to disclose this tax on a blank line in the 1100 series? Given the fact that most of the HUD doesn't make sense to me and HUD doesn't seem to care if the final receipant is listed, I am leaning toward not needing to seperate out the tax as long as it is included in the total premium amount on line 1104. I have emialed HUD for their answer, but wanted to check here to get opinions.
Thanks
On line 1104 we listed the total for lender's title insurance premium. Then on lines 1106 and 1107 we listed the portion of the premium being paid to the agent and underwriter respectfully. The problem is that there are taxes included in the total premium on 1104 that are not accounted for on lines 1106/1107 so they do not total line 1104.
My question - do these lines have to total or do we need to disclose this tax on a blank line in the 1100 series? Given the fact that most of the HUD doesn't make sense to me and HUD doesn't seem to care if the final receipant is listed, I am leaning toward not needing to seperate out the tax as long as it is included in the total premium amount on line 1104. I have emialed HUD for their answer, but wanted to check here to get opinions.
Thanks
Did HUD respond to your email, or does anyone else know the answer to this? It's not clear whether the taxes on the title insurance premium should be part of the misc items that go into 1101 without being separately itemized, or go in 1104, or get split between 1107 & 1108.
Thanks
I did get an answer from HUD and here it is:
"Only the premium that is retained by the agent and underwriter are disclosed in Lines 1107 and 1108. If the state interprets premium tax as title insurance, it would be part of Line 1103 and 1104 and only itemized if required by state law or a governmental loan program. If the state does not interpret premium tax as title insurance it may be listed on a blank line in the 1100 series."
For us it is part of the title insurance so we do not itemize it so the breakdown does not always match the total premium amount.
Posted By: ahou
Re: RESPA changes 1-1-10 - 03/04/10 08:29 PM
Originally Posted By: ahou
[quote=ahou]The credit in block 2 is -100. In a partial cost loan, a 3rd party fee we are paying increased $50 on the HUD-1. Don't we also increase the credit on line 802 to -150 on the HUD-1 and show the increase as -150 on the comparison chart?
This is the answer I got from HUD:
Block 2 Box 2 is for credits for the rate quoted not 3rd party credits. The HUD-1 in the 200’s is where the credit goes.
I'm confused more than ever. All I want to know is how to disclose the credit in line 802 and on pg 3 on the HUD-1 when a 3rd fee we are paying in a partial cost loan increases (is more than stated on the GFE). Is he saying I need to leave the cr on the HUD-1 the same as the GFE and put a cr on pg 1?
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 03/04/10 08:37 PM
Originally Posted By: RR joker
Originally Posted By: DD Regs
Two Quick questions.
Construction inspection fees on HUD
1. They go on line 808 but are NOT included in the 801 total? If they are performed by the appraiser or other third party, correct. They are a "required provider"
2. The inspection fees are not a FC and therefore not included in the APR per 226.4(c)(7)(iv)? So long as they are done prior to closing...yes. If they are done after closing, they are.
Thanks
Construction inspection fees on HUD
1. They go on line 808 but are NOT included in the 801 total? If they are performed by the appraiser or other third party, correct. They are a "required provider"
2. The inspection fees are not a FC and therefore not included in the APR per 226.4(c)(7)(iv)? So long as they are done prior to closing...yes. If they are done after closing, they are.
Thanks
RR, Thanks for teh quick response.
On question 1, yes these are construction inspection performed by our required appraiser. So, sorry to be dumb, but does this get included in the 801 total, or should these go elsewhere, in the 1300s?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/04/10 09:11 PM
DD, they'd go anywhere from 804 down (of the 800 series). Just like your credit report/appraisal/flood, etc.
Posted By: KimD
Re: RESPA changes 1-1-10 - 03/04/10 09:13 PM
Q: Borrower makes application with Lender on their online mortgage system. Borrower receives the GFE at that time of the online application showing that an estimate for a survey will be $600.00 in the “Required Services that you can shop for”. A provider list is given to the borrower at time of application. The sales contract states that the seller is to furnish the surveyor to the borrower. The seller goes out and purchases the survey from a surveyor on the Lender Provider List (without the lenders knowledge) and pays for it prior to closing. Is the cost of the survey shown on the HUD I under Line #1301 as (POCS)?
In other words does seller paid items that are paid outside of the closing go on the HUD I Statement??
In other words does seller paid items that are paid outside of the closing go on the HUD I Statement??
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 03/04/10 09:18 PM
Originally Posted By: ahou
Originally Posted By: ahou
[quote=ahou]The credit in block 2 is -100. In a partial cost loan, a 3rd party fee we are paying increased $50 on the HUD-1. Don't we also increase the credit on line 802 to -150 on the HUD-1 and show the increase as -150 on the comparison chart?
This is the answer I got from HUD:
Block 2 Box 2 is for credits for the rate quoted not 3rd party credits. The HUD-1 in the 200’s is where the credit goes.
Quite frankly, the person at HUD who told you that is wrong. His or her answer contradicts the 1/28/2010 FAQS. Q&A 4 on page 27, and Q&A 3 on page 44, BOTH refer to third party fees and costs. Page 27 is specificaly discussing Block 2 of the GFE, and page 44 is discussing lines in the 800 series.
Posted By: Will B
Re: RESPA changes 1-1-10 - 03/04/10 09:20 PM
Quote:
I did get an answer from HUD and here it is:
"Only the premium that is retained by the agent and underwriter are disclosed in Lines 1107 and 1108. If the state interprets premium tax as title insurance, it would be part of Line 1103 and 1104 and only itemized if required by state law or a governmental loan program. If the state does not interpret premium tax as title insurance it may be listed on a blank line in the 1100 series."
For us it is part of the title insurance so we do not itemize it so the breakdown does not always match the total premium amount.
"Only the premium that is retained by the agent and underwriter are disclosed in Lines 1107 and 1108. If the state interprets premium tax as title insurance, it would be part of Line 1103 and 1104 and only itemized if required by state law or a governmental loan program. If the state does not interpret premium tax as title insurance it may be listed on a blank line in the 1100 series."
For us it is part of the title insurance so we do not itemize it so the breakdown does not always match the total premium amount.
Thanks. Does this mean you're putting it in 1103 and 1104 and because of this 1104 doesn't match the sum of 1107 + 1108?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/04/10 09:23 PM
Originally Posted By: ahou
Originally Posted By: ahou
[quote=ahou]The credit in block 2 is -100. In a partial cost loan, a 3rd party fee we are paying increased $50 on the HUD-1. Don't we also increase the credit on line 802 to -150 on the HUD-1 and show the increase as -150 on the comparison chart?
This is the answer I got from HUD:
Block 2 Box 2 is for credits for the rate quoted not 3rd party credits. The HUD-1 in the 200’s is where the credit goes.
I'm confused more than ever. All I want to know is how to disclose the credit in line 802 and on pg 3 on the HUD-1 when a 3rd fee we are paying in a partial cost loan increases (is more than stated on the GFE). Is he saying I need to leave the cr on the HUD-1 the same as the GFE and put a cr on pg 1?
ahou, HUD has stumbled all overthemselves a million times by now...several times they have flat out said that you can't change block 1, so you put it in 2...nothing to do with the rate...yada, yada.
SO there is even a Q&A that address lender credits for any part of 801 PLUS 3rd party fees will be shown in Block 2.
SO...in your situation, I would do this: Page 3
GFE HUD
-100 -150
HUD page 200 section:
$50 lender credit tolerance cure
HUD line 802 -100
At least by golly I think that's how I'd do it!
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/04/10 09:27 PM
Originally Posted By: Will B
Quote:
I did get an answer from HUD and here it is:
"Only the premium that is retained by the agent and underwriter are disclosed in Lines 1107 and 1108. If the state interprets premium tax as title insurance, it would be part of Line 1103 and 1104 and only itemized if required by state law or a governmental loan program. If the state does not interpret premium tax as title insurance it may be listed on a blank line in the 1100 series."
For us it is part of the title insurance so we do not itemize it so the breakdown does not always match the total premium amount.
"Only the premium that is retained by the agent and underwriter are disclosed in Lines 1107 and 1108. If the state interprets premium tax as title insurance, it would be part of Line 1103 and 1104 and only itemized if required by state law or a governmental loan program. If the state does not interpret premium tax as title insurance it may be listed on a blank line in the 1100 series."
For us it is part of the title insurance so we do not itemize it so the breakdown does not always match the total premium amount.
Thanks. Does this mean you're putting it in 1103 and 1104 and because of this 1104 doesn't match the sum of 1107 + 1108?
Will, I'm really not trying to answser your question, BUT, I can tell you I hve yet to see a title insurance section actually add up...there's something very weird about those numbers. I choose to not care!
Posted By: MarieR
Re: RESPA changes 1-1-10 - 03/04/10 09:39 PM
Originally Posted By: RR joker
Originally Posted By: Will B
Quote:
I did get an answer from HUD and here it is:
"Only the premium that is retained by the agent and underwriter are disclosed in Lines 1107 and 1108. If the state interprets premium tax as title insurance, it would be part of Line 1103 and 1104 and only itemized if required by state law or a governmental loan program. If the state does not interpret premium tax as title insurance it may be listed on a blank line in the 1100 series."
For us it is part of the title insurance so we do not itemize it so the breakdown does not always match the total premium amount.
"Only the premium that is retained by the agent and underwriter are disclosed in Lines 1107 and 1108. If the state interprets premium tax as title insurance, it would be part of Line 1103 and 1104 and only itemized if required by state law or a governmental loan program. If the state does not interpret premium tax as title insurance it may be listed on a blank line in the 1100 series."
For us it is part of the title insurance so we do not itemize it so the breakdown does not always match the total premium amount.
Thanks. Does this mean you're putting it in 1103 and 1104 and because of this 1104 doesn't match the sum of 1107 + 1108?
Will, I'm really not trying to answser your question, BUT, I can tell you I hve yet to see a title insurance section actually add up...there's something very weird about those numbers. I choose to not care!
Will B- that is correct
Joker - I am almost beginning not to care about much on the HUD - they have just about wore me down.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 03/04/10 10:26 PM
Originally Posted By: KimD
Q: Borrower makes application with Lender on their online mortgage system. Borrower receives the GFE at that time of the online application showing that an estimate for a survey will be $600.00 in the “Required Services that you can shop for”. A provider list is given to the borrower at time of application. The sales contract states that the seller is to furnish the surveyor to the borrower. The seller goes out and purchases the survey from a surveyor on the Lender Provider List (without the lenders knowledge) and pays for it prior to closing. Is the cost of the survey shown on the HUD I under Line #1301 as (POCS)?
In other words does seller paid items that are paid outside of the closing go on the HUD I Statement??
In other words does seller paid items that are paid outside of the closing go on the HUD I Statement??
Good one. I originally answered this way:
Since the survey was required by the lender and listed on the GFE, it must be listed in the borrower's column of the HUD-1. A credit to the borrower would be listed in the 200s and the fee would be listed as POC (Seller) in the 500s (no $ amount listed in the seller's column since they already paid for it.
But then I realized this wouldn't balance. Where would the borrower's credit come from? I think this is another one that HUD didn't think about when they wrote this stupid reg. So I think the only way to do it is:
List the fee in the 1300s as "POC (Seller).
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 03/05/10 01:02 AM
Originally Posted By: DD Regs
Originally Posted By: RR joker
Originally Posted By: DD Regs
Two Quick questions.
Construction inspection fees on HUD
1. They go on line 808 but are NOT included in the 801 total? If they are performed by the appraiser or other third party, correct. They are a "required provider"
2. The inspection fees are not a FC and therefore not included in the APR per 226.4(c)(7)(iv)? So long as they are done prior to closing...yes. If they are done after closing, they are.
Thanks
Construction inspection fees on HUD
1. They go on line 808 but are NOT included in the 801 total? If they are performed by the appraiser or other third party, correct. They are a "required provider"
2. The inspection fees are not a FC and therefore not included in the APR per 226.4(c)(7)(iv)? So long as they are done prior to closing...yes. If they are done after closing, they are.
Thanks
RR, Thanks for the quick response.
On question 1, yes these are construction inspection performed by our required appraiser. So, sorry to be dumb, but does this get included in the 801 total, or should these go elsewhere, in the 1300s?
OK, I think I have this, they go on line 808 in the borrowers column, not outside the columns and totaled into 801.
And since you close on the loan, have draw, inspection, draw inspection, etc. these would be FCs and be part of APR?
I don't see how these can be before a closing on a loan, they are before the closing on the perm finance.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/05/10 03:14 PM
That's how we would do it. The Z exemption only covers inspection fees (say, a final inspection) if they are done before the loan closes.
IF we have construction inspsections, we include them in the ppfc.
IF we have construction inspsections, we include them in the ppfc.
Posted By: Compli123
Re: RESPA changes 1-1-10 - 03/05/10 10:10 PM
Can the closing company change the numbers on page 3 of the HUD, (where it details what was listed on the GFE vs. the HUD) to something other than what the bank listed on teh actual GFE?
For example: we listed the title service as $690 and owner's as $445 but on pg 3 of HUD they listed title service as $515 and $620 under the GFE section.
When I called them about this they said that they had to do that becuase the seller traditionally pays the for the owners part of the title work and they needed to adjust our numbers by $115 in order to show that the seller was paying for all of the buyers title work.
For example: we listed the title service as $690 and owner's as $445 but on pg 3 of HUD they listed title service as $515 and $620 under the GFE section.
When I called them about this they said that they had to do that becuase the seller traditionally pays the for the owners part of the title work and they needed to adjust our numbers by $115 in order to show that the seller was paying for all of the buyers title work.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/08/10 02:34 PM
tHEY can't just change what was quoted on the GFE...that's why there's a HUD part to compare to!
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 03/08/10 02:51 PM
Further, the part that the seller was paying should be shown as a credit on page one of the HUD in order to keep the numbers balanced.
I'm getting sick and tired of title companies telling banks that it HAS to be this way. Hey...they work for the banks, not vice versa!
Not to mention what is fast becoming the consomate pita...my software won't let me do it that way. THEN GET IT FIXED! Why do people think software is the be all and end all??!!
Now that I've got that off my chest, the week can only get better...right?
I'm getting sick and tired of title companies telling banks that it HAS to be this way. Hey...they work for the banks, not vice versa!
Not to mention what is fast becoming the consomate pita...my software won't let me do it that way. THEN GET IT FIXED! Why do people think software is the be all and end all??!!
Now that I've got that off my chest, the week can only get better...right?
Posted By: Mrs. Rizzo
Re: RESPA changes 1-1-10 - 03/08/10 04:05 PM
Has anyone put together an example list for changed circumstances? We're working on examples for our staff and thought I would ask.
Thanks!!
Thanks!!
Posted By: small town girl
Re: RESPA changes 1-1-10 - 03/08/10 04:59 PM
I have a question. If an employer charges a fee to verify employment, as some large employers do, how is that fee disclosed? It was not originally disclosed on the GFE because we don't have many employers in our area that charge a fee. Are we now permitted to show this fee in on a revised GFE or is this a cost that the bank must incur?
Posted By: small town girl
Re: RESPA changes 1-1-10 - 03/08/10 05:03 PM
forgot to ask --- We have a list of appraisers that the borrower can choose from or "shop from". Are we supposed to have a list for attorneys and title companies also?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/08/10 05:05 PM
I really really hope you don't allow your borrower's to pick an appraiser...that would be illegal.
You do need a list for any other required services, unless you require a specific servicer.
You do need a list for any other required services, unless you require a specific servicer.
Posted By: Mrs. Rizzo
Re: RESPA changes 1-1-10 - 03/08/10 05:08 PM
I'm thinking the employer fee wouldn't go on your GFE? Just the HUD to be passed on to the borrower.
If you allow your borrower to shop, list those services in block 3 and give them the SSPL with at least one provider for each shoppable service.
You do not have to give them a list but if you don't, you are bound to the tolerances.
If you allow your borrower to shop, list those services in block 3 and give them the SSPL with at least one provider for each shoppable service.
You do not have to give them a list but if you don't, you are bound to the tolerances.
Posted By: Mrs. Rizzo
Re: RESPA changes 1-1-10 - 03/08/10 05:10 PM
And RR is right...the borrower may not choose their appraiser. See HVCC rules.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 03/08/10 05:10 PM
I'm sure I posted this before but here it is again with regard to employment verification fees. Lots of big companies around here use The Work Number.
From HUD -
From HUD -
Quote:
The Work Number would be considered a changed circumstance and therefore this would be a Block 3 item on the GFE if this was not known at the time of issuing the GFE.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/08/10 05:12 PM
Originally Posted By: small town girl
I have a question. If an employer charges a fee to verify employment, as some large employers do, how is that fee disclosed? It was not originally disclosed on the GFE because we don't have many employers in our area that charge a fee. Are we now permitted to show this fee in on a revised GFE or is this a cost that the bank must incur?
I would consider that a block 3 fee (required provider) and if it wasn't known at application that you would incur a charge, then you would, IMO, have a changed circumstance and so long as you redisclose within 3 days...you can change that one thing.
Posted By: pjs
Re: RESPA changes 1-1-10 - 03/08/10 05:36 PM
Am I right? Those services included in "title services" like doc prep fee, title update, wire fees etc are not to be itemized on the HUD-1, so if the seller is paying those fees we should have a credit on the front of the HUD in the 204-209 series and a charge to the seller in the 506-509 series. Thanks
Posted By: small town girl
Re: RESPA changes 1-1-10 - 03/08/10 06:09 PM
Sorry - we used to use only a couple of appraisal companies unless the borrower had a preference. We do not allow that anymore. We have an approved list that a non-loan officer picks the appraiser from. They just go down the list and pick the next name on the list.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 03/08/10 09:14 PM
Originally Posted By: RR joker
Originally Posted By: small town girl
I have a question. If an employer charges a fee to verify employment, as some large employers do, how is that fee disclosed? It was not originally disclosed on the GFE because we don't have many employers in our area that charge a fee. Are we now permitted to show this fee in on a revised GFE or is this a cost that the bank must incur?
I would consider that a block 3 fee (required provider) and if it wasn't known at application that you would incur a charge, then you would, IMO, have a changed circumstance and so long as you redisclose within 3 days...you can change that one thing.
I think that "verification" fee would be part of the origination charges.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/08/10 09:16 PM
YOu would think that...but it only happens in certain circumstances. I've had another discussions regarding a similar situation where you have to call "the work number" for large companies...it's a "required provider" and because you don't generally know you'll have to use it...it should qualify for a CC.
Posted By: Mrs. Rizzo
Re: RESPA changes 1-1-10 - 03/09/10 05:29 PM
Just curious...
Is anyone NOT counting the YSP being earned on a loan for the points and fees test?
For example, if the broker chooses not to keep all of the YSP on a loan, are you still using the total amount in your calculation or only the portion the broker is retaining?
Is anyone NOT counting the YSP being earned on a loan for the points and fees test?
For example, if the broker chooses not to keep all of the YSP on a loan, are you still using the total amount in your calculation or only the portion the broker is retaining?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 03/09/10 05:32 PM
Dan, see my post above^^. HSG-HUD says the Work Number or any similar company that employers use for employment verification, is a Block 3 fee and would qualify for a changed circumstance since the lender would have no way of knowing prior to sending out VOEs.
Posted By: small town girl
Re: RESPA changes 1-1-10 - 03/09/10 08:19 PM
Could you please tell me where to find where HUD says the work number would go in block 3? I've been looking and I can't find it. I'd like to have it to document why we did what we did. Thanks.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/09/10 08:38 PM
small town...it was in an email response to TR...it's not written anywhere. However, it makes logical sense.
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 03/09/10 08:42 PM
New Question - In the olden days, in those cases where we had to produce closing packages multiple times - in most cases, where the borrower would repeatedly change their minds about when they were going to close - we would charge what we called a "re-draw" fee. The idea was that the borrower would be more realistic about the closing date when there was a penalty fee invovled.
Can I consider this a changed circumstance, and if so where would I put it?
Can I consider this a changed circumstance, and if so where would I put it?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/10/10 01:19 PM
I think Truffle and I talked about this one time, so she may have a different solution. But as I see it, it would be a Block 1 fee that can't change, at least not under those circumstances. I'm not really sure how such a fee would be able to be charged.
Posted By: Mrs. Rizzo
Re: RESPA changes 1-1-10 - 03/10/10 01:48 PM
(Repeat)
Just curious...
Is anyone NOT counting the YSP being earned on a loan for the points and fees test?
For example, if the broker chooses not to keep all of the YSP on a loan, are you still using the total amount in your calculation or only the portion the broker is retaining?
Just curious...
Is anyone NOT counting the YSP being earned on a loan for the points and fees test?
For example, if the broker chooses not to keep all of the YSP on a loan, are you still using the total amount in your calculation or only the portion the broker is retaining?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 03/10/10 03:57 PM
respa queen -
We haven't hit a borrower requested redraft fees yet but,imo, it would be a changed circumstance and would go in Block 2 as a cost of getting the rate. That's how we handled a borrower requested extension fee.
If someone else has a better idea, please let me know. I'm just trying never to touch Block 1.
We haven't hit a borrower requested redraft fees yet but,imo, it would be a changed circumstance and would go in Block 2 as a cost of getting the rate. That's how we handled a borrower requested extension fee.
If someone else has a better idea, please let me know. I'm just trying never to touch Block 1.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 03/10/10 04:34 PM
Here is an answer I got from HUD to a question:
Has anyone ever put a POC on page 1??
Quote:
In the 200’s on Page 1 of the HUD-1 it states “Charges paid BY or in behalf of the Borrower.” Since the borrower paid, this is where the POC goes not on page 2. “POC” Borrower.
Has anyone ever put a POC on page 1??
Posted By: Compliance Chick
Re: RESPA changes 1-1-10 - 03/10/10 05:36 PM
If a loan is exempt from RESPA, it is optional for us to use a HUD form. If we choose to, in fact, use a HUD form for a non-RESPA loan that is closing in 2010, which HUD form do we use ... the old one or the new one?
If we have to use the new one, wouldn't that mean that we would also have to provide a GFE in order for the GFE information to be put on the new HUD form or do we simply use the new form and not fill out the GFE info.
If we have to use the new one, wouldn't that mean that we would also have to provide a GFE in order for the GFE information to be put on the new HUD form or do we simply use the new form and not fill out the GFE info.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/10/10 05:54 PM
If I attempted that, I'd use the old one.
Posted By: MarieR
Re: RESPA changes 1-1-10 - 03/10/10 06:24 PM
We have some attorney's that are using the old HUD on nonRESPA covered loans.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 03/10/10 06:26 PM
We use the current one, and just toss page three.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 03/10/10 08:16 PM
Is anyone not completing box 11 (homeowners insurance) for refi's and consumer loans, just for purchases only?
Or are you always making a quote for homeowners regardless?
Or are you always making a quote for homeowners regardless?
Posted By: manylayers
Re: RESPA changes 1-1-10 - 03/10/10 08:25 PM
if the policy is due to expire within 3 months we list it....if we aren't sure, we list it....better to have it on there than not and need to add it later.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 03/10/10 08:32 PM
I don't see any logic in listing it if the insurance is due to expire. What if it's 4 months? Why draw the line there?
The regulation is pretty clear that you must list all settlement services. When they are paid is not a factor.
The regulation is pretty clear that you must list all settlement services. When they are paid is not a factor.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 03/10/10 08:35 PM
Originally Posted By: Just Jay
Here is an answer I got from HUD to a question:
Has anyone ever put a POC on page 1??
Quote:
In the 200’s on Page 1 of the HUD-1 it states “Charges paid BY or in behalf of the Borrower.” Since the borrower paid, this is where the POC goes not on page 2. “POC” Borrower.
Has anyone ever put a POC on page 1??
If it is a loan related POC, it should be on page 2. I would think the 200's may show, for example, taxes paid on behalf of borrower but not a loan related fee.
Posted By: Mrs. Rizzo
Re: RESPA changes 1-1-10 - 03/10/10 08:41 PM
Originally Posted By: Sox in 07
Originally Posted By: Just Jay
Here is an answer I got from HUD to a question:
Has anyone ever put a POC on page 1??
Quote:
In the 200’s on Page 1 of the HUD-1 it states “Charges paid BY or in behalf of the Borrower.” Since the borrower paid, this is where the POC goes not on page 2. “POC” Borrower.
Has anyone ever put a POC on page 1??
If it is a loan related POC, it should be on page 2. I would think the 200's may show, for example, taxes paid on behalf of borrower but not a loan related fee.
I agree with Sox here. We are listing them on page 2.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 03/10/10 09:34 PM
I agree, and he (Anthony) recanted his no POC on page two nonsense.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 03/10/10 09:35 PM
Originally Posted By: David Dickinson
I don't see any logic in listing it if the insurance is due to expire. What if it's 4 months? Why draw the line there?
The regulation is pretty clear that you must list all settlement services. When they are paid is not a factor.
The regulation is pretty clear that you must list all settlement services. When they are paid is not a factor.
Right, but then I get this from HUD today:
Quote:
The HUD-1 can be used in the same manner, but on refinances Homeowner’s insurance does not have to be disclosed on the GFE for refinances since the lender may presume that the borrower is up to date on their insurance, even though you require it to be paid. If not then you can issue a revised GFE based upon changed circumstances if the borrower was not updated on the GFE and show on the HUD-1 the payments that were due prior to closing in the same manner as a purchase.
Since when are we allowed to presume anything???
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/11/10 02:05 PM
OMG! This just gets crazier and crazier. We quote a year's worth of insurance regardless of the type of loan or when it's due. Always have.
To add to this, however...do any of you see any sane reason for additionally listing it as POC on the HUD? Or a credit report, flood or anything else you didn't actually order?
To add to this, however...do any of you see any sane reason for additionally listing it as POC on the HUD? Or a credit report, flood or anything else you didn't actually order?
Posted By: Sinatra Fan
Re: RESPA changes 1-1-10 - 03/11/10 02:06 PM
Originally Posted By: RR joker
OMG! This just gets crazier and crazier. We quote a year's worth of insurance regardless of the type of loan or when it's due. Always have.
Same here.
Posted By: TB 12
Re: RESPA changes 1-1-10 - 03/11/10 02:39 PM
We do as well, and will continue to do so.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 03/11/10 03:44 PM
big arguments about it here... not sure what we will do.
Posted By: river girl
Re: RESPA changes 1-1-10 - 03/11/10 09:38 PM
Management just came to me and said we are signing an agreement with a company to assist us in doing FHA loans.
In the agreement is a statement that all loans closed will be assessed a pre-purchase, post closing review fee of $399.
This fee will be passed to the consumer.
Would I put this in as an admin fee so in block 1?
Management also wants to know if they can up the rate 1/8 and not pass this fee to the consumer and then not list anywhere? I told them no. Is that correct?
In the agreement is a statement that all loans closed will be assessed a pre-purchase, post closing review fee of $399.
This fee will be passed to the consumer.
Would I put this in as an admin fee so in block 1?
Management also wants to know if they can up the rate 1/8 and not pass this fee to the consumer and then not list anywhere? I told them no. Is that correct?
Posted By: Ninky
Re: RESPA changes 1-1-10 - 03/11/10 10:43 PM
Do added p.o.c. charges constitute a change in circumstance? After providing the initial GFE, if we accept a current appraisal from our borrower that he already paid for to determine value, does this qualify as a change in circumstance? We do not require the appraisal, but the borrower has provided it to help prove his property value. There is no increase in charges, so do we need to re-disclose? (Our appraisal dept. reviews the appraisal.)
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 03/12/10 12:10 AM
"if we accept a current appraisal from our borrower that he already paid for to determine value"
That might not be the best of examples, as the appraisal rules would not allow you do that.
That might not be the best of examples, as the appraisal rules would not allow you do that.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 03/12/10 04:19 PM
Followup to my HUD convo on homeowners on the GFE and HUD for refi's:
I still do not like his 'assume' commenting. I replied back further about my examining body not so big on making assumptions, and will be retaining his email for their review
Originally Posted By: Anthony HUD
The HUD-1 can be used in the same manner, but on refinances Homeowner’s insurance does not have to be disclosed on the GFE for refinances since the lender may presume that the borrower is up to date on their insurance, even though you require it to be paid. If not then you can issue a revised GFE based upon changed circumstances if the borrower was not updated on the GFE and show on the HUD-1 the payments that were due prior to closing in the same manner as a purchase.
Originally Posted By: Jay
Now that is an interesting response. I think myself and many of my colleagues did not have this interpretation of Box 11 on the GFE. Many of us have felt that since Homeowners Insurance is on the GFE, and the preamble to the Appendix C states “…The required standardized GFE form must be prepared completely and accurately.” Also, since we require that homeowners insurance is required to close the loan, that it essentially is required of the loan, hence to be listed on the GFE and HUD. The ability to ‘presume’ that it is up to date doesn’t seem to be in the spirit of rule, nor is it something we were allowed to do in the past. Several banks, ourselves included, have been cited by examiners for not listed the homeowners insurance as a POC item, even on refinances.
Admittingly, I am hesitant to not list it for refinances unless I could comfortably cite a specific rule or citation in Appendix C, or via some other commentary. Do you know or have something more concrete I can point to that shows that not including homeowners insurance on the GFE and HUD for policies paid outside of closing for a refinance is deemed acceptable?
Admittingly, I am hesitant to not list it for refinances unless I could comfortably cite a specific rule or citation in Appendix C, or via some other commentary. Do you know or have something more concrete I can point to that shows that not including homeowners insurance on the GFE and HUD for policies paid outside of closing for a refinance is deemed acceptable?
Originally Posted By: Anthony HUD
For clarification, you still must list Homeowner’s insurance on the GFE but if it is a refinance you can assume it is up to date and disclose a “$0” amount in the column on the GFE. If later it becomes clear that the homeowner’s insurance amount is not updated you can re-disclose or show on the HUD-1 the amount necessary in the 1300’s “charges that can increase.”
I still do not like his 'assume' commenting. I replied back further about my examining body not so big on making assumptions, and will be retaining his email for their review
Posted By: Working From Home
Re: RESPA changes 1-1-10 - 03/12/10 06:15 PM
My bank does not charge a credit report fee to the borrower in a mortagage transaction. We do however, get a credit report before proceeding with a loan. We eat that cost. That cost is not passed on to the borrower. Would that fee that we are paying to the credit reporting agency be required to be shown on the GFE? It sounds like the new GFE rule requires that we show that fee??? However, I liken it to showing the lender's telephone bill on the GFE since we had to use the phone to call an appraiser or showing our light bill on the GFE since we needed lights to process the loan application. We need the credit report to process the application and we are paying for it.
Posted By: RobinB
Re: RESPA changes 1-1-10 - 03/12/10 07:00 PM
Originally Posted By: Rizzo
Has anyone put together an example list for changed circumstances? We're working on examples for our staff and thought I would ask.
Thanks!!
Thanks!!
Don't have a list, but did here a good rule-of-thumb yesterday at a broker meeting: "If it's the borrower's request, it's a changed circumstance. If it affects your profitability, it's not."
Posted By: Ninky
Re: RESPA changes 1-1-10 - 03/12/10 07:09 PM
The appraisal referenced was from another 3rd party, mortgage lender, but our borrower has already paid for it. It does not change any of the fees on the GFE or even to the HUD when prepared. Do we need to re-disclose for a p.o.c. appraisal.
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 03/12/10 07:11 PM
Yes you have to disclose the credit report fee. If you want to absorb the fee, show a credit in Block 2. Not commenting on the logic on that .....but this has been discussed ad nauseum in here and you definitely have to show it.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/12/10 07:13 PM
Originally Posted By: river girl
Management just came to me and said we are signing an agreement with a company to assist us in doing FHA loans.
In the agreement is a statement that all loans closed will be assessed a pre-purchase, post closing review fee of $399.
This fee will be passed to the consumer.
Would I put this in as an admin fee so in block 1?
Management also wants to know if they can up the rate 1/8 and not pass this fee to the consumer and then not list anywhere? I told them no. Is that correct?
In the agreement is a statement that all loans closed will be assessed a pre-purchase, post closing review fee of $399.
This fee will be passed to the consumer.
Would I put this in as an admin fee so in block 1?
Management also wants to know if they can up the rate 1/8 and not pass this fee to the consumer and then not list anywhere? I told them no. Is that correct?
Block 1
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/12/10 07:16 PM
Originally Posted By: Monica1001
My bank does not charge a credit report fee to the borrower in a mortagage transaction. We do however, get a credit report before proceeding with a loan. We eat that cost. That cost is not passed on to the borrower. Would that fee that we are paying to the credit reporting agency be required to be shown on the GFE? It sounds like the new GFE rule requires that we show that fee??? However, I liken it to showing the lender's telephone bill on the GFE since we had to use the phone to call an appraiser or showing our light bill on the GFE since we needed lights to process the loan application. We need the credit report to process the application and we are paying for it.
you could run a search in this forum on Credit report fees and probably find all the info you wanted on this topic. The new rules done't require it...the rules have always required it. It's a service provider fee. The phone and electric company are not.
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 03/12/10 07:23 PM
Joker....it may have always been required...but....i know lots of banks didn't use to itemize it on the GFE...our bank for example paid for it out of the doc. fee...i think that's where all the confusion comes from.
Posted By: river girl
Re: RESPA changes 1-1-10 - 03/12/10 11:14 PM
For line 1400 on the Hud 1a, do we include or exclude the items paid outside of closing by either the borrower or by the FI?
We are currently excluding those fees p.o.c. from the total showing in line 1400.
We are currently excluding those fees p.o.c. from the total showing in line 1400.
Posted By: river girl
Re: RESPA changes 1-1-10 - 03/15/10 08:55 PM
I having trouble finind any reference to correspondent lending. All of the FAQs and other resources only address mortgage broker fees and the new gfe / hud.
Do I just follow the mortgage broker guidance for our future correspondent lending relationship and how to reflect their fees on the gfe/hud?
Thank you for your help. I am in new territory and am quite confused.
Do I just follow the mortgage broker guidance for our future correspondent lending relationship and how to reflect their fees on the gfe/hud?
Thank you for your help. I am in new territory and am quite confused.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/16/10 01:52 PM
POC items would not show in the total.
Regarding correspondent lending. If the "correspondent lender" does not close and fund in their own name with their own funds, then you treat it like a "broker" transaction. The key is who funds...the customer's contact, or a differnt lending institution??
Regarding correspondent lending. If the "correspondent lender" does not close and fund in their own name with their own funds, then you treat it like a "broker" transaction. The key is who funds...the customer's contact, or a differnt lending institution??
Posted By: river girl
Re: RESPA changes 1-1-10 - 03/16/10 10:36 PM
Regarding correspondent lending...I was told We will be closing and funding the loan in our name and then sending to correspondent to purchase.
Does this mean I don't follow any of the guidance in the FAQs for mortgage brokers? It is all too confusing to try and figure this out for something I have no idea about.
In an earlier post I was told to put the correspondent's $399 fee that is being passed to the consumer for the post closing review in Block 1 of the GFE. Is it for sure that we can't we pay the fee and just increase the rate to the consumer?
Does this mean I don't follow any of the guidance in the FAQs for mortgage brokers? It is all too confusing to try and figure this out for something I have no idea about.
In an earlier post I was told to put the correspondent's $399 fee that is being passed to the consumer for the post closing review in Block 1 of the GFE. Is it for sure that we can't we pay the fee and just increase the rate to the consumer?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 03/17/10 02:54 AM
If you fund the loan, you are not a broker.
All fee by all lenders (including 2nd Market fees), go in Block 1.
All fee by all lenders (including 2nd Market fees), go in Block 1.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/17/10 01:43 PM
agree with what David said and how he said it...short, sweet and totally on point!
Posted By: ramona
Re: RESPA changes 1-1-10 - 03/17/10 02:11 PM
If someone wants to obtain a pre-qualification on a mortgage loan and we have pulled a credit report to help make a determination to allow the potential applicant to know how much they may be able to borrow, but do not have a property identified, we do not have a true application according to RESPA. But according to Reg B, if the potential applicant decides they don't want to proceed because we indicated they could only borrow $XXX instead of $YYY, do we have a true withdrawal? Also, if we indicate to the potential applicant that we could only loan $YYY instead of their target of $XXX, do we have a denial?
Posted By: biz
Re: RESPA changes 1-1-10 - 03/17/10 03:24 PM
The way I understand it is once a loan has gone by committee, (in your case someone decided you did not not want to loan X but would loan Y-therefore going by committee) it can not be "withdrawn" by the customer and should continue to be processed accordingly. And yes, if you do not approve a loan substantially the same way as applied and the borrower does not take your "counteroffer" it would be a denial and subject to an Adverse Action Notice.
Posted By: Strange1
Re: RESPA changes 1-1-10 - 03/17/10 03:56 PM
How would the RESPA cure provision operate if the customer never receives a GFE prior to closing? Would this be tantamount to disclosing a blank GFE necessitating a cure for all fees? Or is the cure provision not applicable, thus leaving no avenue for remedying the violation? Thanks
Posted By: mbtprocessor
Re: RESPA changes 1-1-10 - 03/17/10 04:32 PM
On a GFE...where would I list a broker credit report fee that is not a required service by us, since we pull our own and charge for it?
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 03/17/10 05:22 PM
Did anyone see that HUD is hosting a webcast tomorrow 3/18 from 1:30 - 3:30 ET on RESPA?
http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm Look at the "Watch the Webcast" section on the right hand side of this web page. I clicked on the link they provided and it takes me to the following page.
http://portal.hud.gov/portal/page/portal/HUD/webcasts/schedule
It is not clear whether we need to register for this.
http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm Look at the "Watch the Webcast" section on the right hand side of this web page. I clicked on the link they provided and it takes me to the following page.
http://portal.hud.gov/portal/page/portal/HUD/webcasts/schedule
It is not clear whether we need to register for this.
Posted By: Bullseye
Re: RESPA changes 1-1-10 - 03/17/10 05:54 PM
Originally Posted By: Reads Regs
Did anyone see that HUD is hosting a webcast tomorrow 3/18 from 1:30 - 3:30 ET on RESPA?
http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm Look at the "Watch the Webcast" section on the right hand side of this web page. I clicked on the link they provided and it takes me to the following page.
http://portal.hud.gov/portal/page/portal/HUD/webcasts/schedule
It is not clear whether we need to register for this.
http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm Look at the "Watch the Webcast" section on the right hand side of this web page. I clicked on the link they provided and it takes me to the following page.
http://portal.hud.gov/portal/page/portal/HUD/webcasts/schedule
It is not clear whether we need to register for this.
Thanks for posting this!
Posted By: manylayers
Re: RESPA changes 1-1-10 - 03/17/10 06:12 PM
I have this on my calendar!!! I'm doing my first review of loan applications post 1-1-10...and trying to keep all the rules straight....and hoping that i'm not misunderstanding any fundamental parts of the new GFE and HUD.
What i am seeing is that we need to do a better job of documenting when and why a GFE is reissued. and when an interest rate is locked and when it is not.
Has anyone else begun to audit their files? what are you finding?
suggestions for improvement?
What i am seeing is that we need to do a better job of documenting when and why a GFE is reissued. and when an interest rate is locked and when it is not.
Has anyone else begun to audit their files? what are you finding?
suggestions for improvement?
Posted By: pjs
Re: RESPA changes 1-1-10 - 03/18/10 04:43 PM
Originally Posted By: Reads Regs
Did anyone see that HUD is hosting a webcast tomorrow 3/18 from 1:30 - 3:30 ET on RESPA?
http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm Look at the "Watch the Webcast" section on the right hand side of this web page. I clicked on the link they provided and it takes me to the following page.
http://portal.hud.gov/portal/page/portal/HUD/webcasts/schedule
It is not clear whether we need to register for this.
http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm Look at the "Watch the Webcast" section on the right hand side of this web page. I clicked on the link they provided and it takes me to the following page.
http://portal.hud.gov/portal/page/portal/HUD/webcasts/schedule
It is not clear whether we need to register for this.
Yes, we are setting up for it now. High hopes this will be good and not confusing.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 03/18/10 04:46 PM
Quote:
High hopes this will be good and not confusing.
ROTFLMAO
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 03/18/10 05:03 PM
Dan! People are looking at me funny for my outburst.
Posted By: JustMe
Re: RESPA changes 1-1-10 - 03/18/10 05:39 PM
Is it just me or has the webcast not started yet? I just have the purple box with the title and says it will start in a minute. It's been that way for 10 minutes now.
Posted By: SaaL
Re: RESPA changes 1-1-10 - 03/18/10 05:41 PM
Same for me.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 03/18/10 05:41 PM
I have the same thing.
Posted By: JustMe
Re: RESPA changes 1-1-10 - 03/18/10 05:44 PM
Why am I not shocked???
Posted By: manylayers
Re: RESPA changes 1-1-10 - 03/18/10 05:45 PM
*sigh*
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 03/18/10 05:47 PM
nearly 15 minutes now. Yes, folks, your tax $$ at work! Maybe they changed their minds and can't really clarify this carp either!!! Usually when I'm listening to music like this I'm at least getting a massage. I'm feeling sleepy...very sleepy.
Usually when I'm listening to music like this I'm at least getting a massage. I'm feeling sleepy...very sleepy.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 03/18/10 05:51 PM
The complete list of scheduled webcasts follows. All times are Eastern Time. Live links for the webcast and training materials will appear in a box on the webcast page approximately 1/2 hour before the broadcast taking you to the video. Archived webcasts are usually available in the video library the day after their initial broadcast.
Looks like we will be seeing the recorded version tomorrow
Nice soothing music though
Looks like we will be seeing the recorded version tomorrow
Nice soothing music though
Posted By: MN Banker
Re: RESPA changes 1-1-10 - 03/18/10 05:51 PM
The music is delightful though
Posted By: JustMe
Re: RESPA changes 1-1-10 - 03/18/10 05:51 PM
Truffle, between you and Dan, I am getting my afternoon laughs. Thanks!
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 03/18/10 05:52 PM
Originally Posted By: manylayers
I have this on my calendar!!! I'm doing my first review of loan applications post 1-1-10...and trying to keep all the rules straight....and hoping that i'm not misunderstanding any fundamental parts of the new GFE and HUD.
What i am seeing is that we need to do a better job of documenting when and why a GFE is reissued. and when an interest rate is locked and when it is not.
Has anyone else begun to audit their files? what are you finding?
suggestions for improvement?
What i am seeing is that we need to do a better job of documenting when and why a GFE is reissued. and when an interest rate is locked and when it is not.
Has anyone else begun to audit their files? what are you finding?
suggestions for improvement?
1. That attorneys aren't completing the HUD-1 completely or they don't understand the rule and fight us when we want items on certain lines including the agent/underwriter breakdown of the fee.
2. Vendor charges are not being putting in the right section. We already ate $10 that we didn't need to (ok it was only $10)
3. We eat a lot of teeny amounts due to rounding on the transfer taxes. Why not a 1% tolerance?
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 03/18/10 05:54 PM
Originally Posted By: Just Me
Is it just me or has the webcast not started yet? I just have the purple box with the title and says it will start in a minute. It's been that way for 10 minutes now.
I'm blocked from the website - no streaming media <sigh>. Hopefully HUD will post later
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/18/10 05:55 PM
No one was brave enough to field this one you guys...Let me give you a final piece of an answer I got from HUD the other day regarding bridge loans:
"You may be right. I am not going any steps further right now Suzy. I have looked at the rule and lots of background and subsequent movements to understand that this might not have been high up on the hypothetical scenarios of those that drafted the rule.
I understand that some manifestation of this issue is being taken up officially now; and I believe that they make tremendous attempts to decide consistent with the language and intent of the rule. I am not privy to final decisions on this point.
Wish I could be more help, but at this moment, it is not for me to further analyze/argue/opine about."
Guess what guys...I wasn't even argueing! LOLOLOLOL!
"You may be right. I am not going any steps further right now Suzy. I have looked at the rule and lots of background and subsequent movements to understand that this might not have been high up on the hypothetical scenarios of those that drafted the rule.
I understand that some manifestation of this issue is being taken up officially now; and I believe that they make tremendous attempts to decide consistent with the language and intent of the rule. I am not privy to final decisions on this point.
Wish I could be more help, but at this moment, it is not for me to further analyze/argue/opine about."
Guess what guys...I wasn't even argueing! LOLOLOLOL!
Posted By: manylayers
Re: RESPA changes 1-1-10 - 03/18/10 06:23 PM
is the presentation stopping and starting (mostly stopping) for anyone else?
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 03/18/10 06:25 PM
Originally Posted By: respa queen
Originally Posted By: Just Me
Is it just me or has the webcast not started yet? I just have the purple box with the title and says it will start in a minute. It's been that way for 10 minutes now.
I'm blocked from the website - no streaming media <sigh>. Hopefully HUD will post later
We were having problems with Windows media player. We installed the latest version and we still were having issues. The audio would cut in and out and the video would freeze up. We called the number HUD provided for technical assistance and got voice mail. We gave up and will try to access the archived version when it is available. I hope HUD will post a PPT file with the slides they showed.
If anyone is able to successfully view the entire webcast, please let us know if it will be worth our time to view the archived webcast. Thanks.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 03/18/10 06:35 PM
I have a couple of questions about quoting Title insurance for block 4 and OTI for block 5 on Non-Conforming Portfolio loans.
Question 1
If we do not require title insurance of any type on our portfolio loans, is it my understanding from the FAQs and REg that no matter what I would be required to quote OTI since the borrower may choose to go buy it.
Based on FAQ
GFE – Block 5
1) Q: Do loan originators have to provide a price for Owner‘s title insurance on the GFE?
A: Loan originators must provide an estimate of the charge for an Owner‘s title insurance policy in Block 5, "Owner‘s title insurance" on the GFE on all purchase transactions. For non-purchase transactions, the loan originator may enter "NA" or "Not Applicable" in this Block.
Question 2
But in regards to lenders title insurance, since we do not require it, it would not be required to be quoted?
Based on the instructions from the REG for block four:
Block 4, “ Title services and lender's title insurance. ”In this block, the loan originator must state the estimated total charge for third party settlement service providers for all closing services, regardless of whether the providers are selected or paid for by the borrower, seller, or loan originator. The loan originator must also include any lender's title insurance premiums, when required, regardless of whether the provider is selected or paid for by the borrower, seller, or loan originator. All fees for title searches, examinations, and endorsements, for example, would be included in this total. The charge shown in this block is subject to an overall 10 percent tolerance as described above.
Question 1
If we do not require title insurance of any type on our portfolio loans, is it my understanding from the FAQs and REg that no matter what I would be required to quote OTI since the borrower may choose to go buy it.
Based on FAQ
GFE – Block 5
1) Q: Do loan originators have to provide a price for Owner‘s title insurance on the GFE?
A: Loan originators must provide an estimate of the charge for an Owner‘s title insurance policy in Block 5, "Owner‘s title insurance" on the GFE on all purchase transactions. For non-purchase transactions, the loan originator may enter "NA" or "Not Applicable" in this Block.
Question 2
But in regards to lenders title insurance, since we do not require it, it would not be required to be quoted?
Based on the instructions from the REG for block four:
Block 4, “ Title services and lender's title insurance. ”In this block, the loan originator must state the estimated total charge for third party settlement service providers for all closing services, regardless of whether the providers are selected or paid for by the borrower, seller, or loan originator. The loan originator must also include any lender's title insurance premiums, when required, regardless of whether the provider is selected or paid for by the borrower, seller, or loan originator. All fees for title searches, examinations, and endorsements, for example, would be included in this total. The charge shown in this block is subject to an overall 10 percent tolerance as described above.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 03/18/10 07:34 PM
I never got a link to print anything from the webcast. Did anyone else? Missed some with cutting out...like right after Vicki Bott started saying 'if you have the contract prior to issuing the GFE then you should....'
Posted By: pjs
Re: RESPA changes 1-1-10 - 03/18/10 07:38 PM
We had terrible reception - she kept cutting in and out.
The purchase contract - we aren't suppose to look at it- that's what I thought- now she said if you have it then go with what it says on the purchase contract.
Homeowners insurance not showing on a refi threw me. We understood it should be on there regardless. Now it doesn't have to be unless the customer is not up to date on payments????
You can look at the entire website prob will be out there on HUD on Monday.
The purchase contract - we aren't suppose to look at it- that's what I thought- now she said if you have it then go with what it says on the purchase contract.
Homeowners insurance not showing on a refi threw me. We understood it should be on there regardless. Now it doesn't have to be unless the customer is not up to date on payments????
You can look at the entire website prob will be out there on HUD on Monday.
Posted By: SnuffytheSeal
Re: RESPA changes 1-1-10 - 03/18/10 07:40 PM
did they say anything about posting it and if so when?
Posted By: pjs
Re: RESPA changes 1-1-10 - 03/18/10 07:49 PM
On the HUD website- 48 hours
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 03/18/10 08:04 PM
Everyone hears things differently but:
Here's some high lights I took from the Webinar:
1. If the consumer does not want to complete an application until they decide they want to proceed with a loan we can issue a generic worksheet of typical charges associated with the loan. The worksheet cannot in any way resemble a GFE or have the words this is a good faith estimate of charges.
2. Pre-approvals - they will be updating the Q&A that says a lender can request documentation to verify information provided on the application for a pre-approval - however if all the necessary information is provided to constitute an application the GFE has to be issued within the 3 business days of receiving the application. Delivering the GFE cannot be dependent on receiving the verification documents.
3. Third party subordination charges are shown in Block 3. Employment verification charges are shown in Block 3. If these charges are learned about after the issuance of the initial GFE they would constitute a changed circumstance allowing the issue of a revised GFE.
4. Title Services and Lenders title insurance in Block 4. They will be updating the Q&A to clarify the itemization of the settlement/closing fee. Currently the Q&A indicates this fee has to be itemized, however according the Webinar this fee only has to be itemized if the title services provider pays a 3rd party to conduct the closing or we use a different provider to conduct the closing other than the title services provider. Therefore since these will now be lump sum charges we do not have to be concerned about including the closing fee in the APR unless it is itemized in the 1100 series.
5. Owners Title Insurance - OTI must be disclosed for all purchase transactions.
6. Block 8 - Transfer taxes - driven by state law.
If state law requires the seller to pay this fee the fee does not have to be disclosed.
If state law divides the fee between buyer and seller the fee the buyer is responsible for under state law must be disclosed
If state law divides the fee between buyer and seller and if you have a sales contract available and it indicates the seller will pay all or a greater portion of the fee than required by state law you must still disclose what state law requires the buyer to pay. In other words you can never disclose less than what is required by state law for the buyer to pay.
If there is no state law governing who pays the fee then 100% of the fee must always be disclosed as being paid by the buyer regardless of the sales contract.
Transfer taxes include intangible taxes, excise taxes, doc stamps, etc. Therefore these taxes in some area can apply to refinances as well as purchases.
7. Block 11 - for homeowners insurance we no longer have to disclose a premium for refinancings and subordinate lien loans unless the premium is coming due and we will require it to be paid as a condition of the closing. You must still disclose homeowners insurance in Block 11 but you will show a $0.00 premium due and you must show $0.00. You cannot use NA.
8. Cure - depending on the "complexity" of the cure you can show it as a credit in the 200 series of the HUD 1 or you can show the cure by line item. The easiest, simplest and the least prone to errors would be disclosing an overall credit in the 200 series and this requires the use of a HUD 1.
Here's some high lights I took from the Webinar:
1. If the consumer does not want to complete an application until they decide they want to proceed with a loan we can issue a generic worksheet of typical charges associated with the loan. The worksheet cannot in any way resemble a GFE or have the words this is a good faith estimate of charges.
2. Pre-approvals - they will be updating the Q&A that says a lender can request documentation to verify information provided on the application for a pre-approval - however if all the necessary information is provided to constitute an application the GFE has to be issued within the 3 business days of receiving the application. Delivering the GFE cannot be dependent on receiving the verification documents.
3. Third party subordination charges are shown in Block 3. Employment verification charges are shown in Block 3. If these charges are learned about after the issuance of the initial GFE they would constitute a changed circumstance allowing the issue of a revised GFE.
4. Title Services and Lenders title insurance in Block 4. They will be updating the Q&A to clarify the itemization of the settlement/closing fee. Currently the Q&A indicates this fee has to be itemized, however according the Webinar this fee only has to be itemized if the title services provider pays a 3rd party to conduct the closing or we use a different provider to conduct the closing other than the title services provider. Therefore since these will now be lump sum charges we do not have to be concerned about including the closing fee in the APR unless it is itemized in the 1100 series.
5. Owners Title Insurance - OTI must be disclosed for all purchase transactions.
6. Block 8 - Transfer taxes - driven by state law.
If state law requires the seller to pay this fee the fee does not have to be disclosed.
If state law divides the fee between buyer and seller the fee the buyer is responsible for under state law must be disclosed
If state law divides the fee between buyer and seller and if you have a sales contract available and it indicates the seller will pay all or a greater portion of the fee than required by state law you must still disclose what state law requires the buyer to pay. In other words you can never disclose less than what is required by state law for the buyer to pay.
If there is no state law governing who pays the fee then 100% of the fee must always be disclosed as being paid by the buyer regardless of the sales contract.
Transfer taxes include intangible taxes, excise taxes, doc stamps, etc. Therefore these taxes in some area can apply to refinances as well as purchases.
7. Block 11 - for homeowners insurance we no longer have to disclose a premium for refinancings and subordinate lien loans unless the premium is coming due and we will require it to be paid as a condition of the closing. You must still disclose homeowners insurance in Block 11 but you will show a $0.00 premium due and you must show $0.00. You cannot use NA.
8. Cure - depending on the "complexity" of the cure you can show it as a credit in the 200 series of the HUD 1 or you can show the cure by line item. The easiest, simplest and the least prone to errors would be disclosing an overall credit in the 200 series and this requires the use of a HUD 1.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 03/18/10 08:20 PM
Originally Posted By: DD Regs
I have a couple of questions about quoting Title insurance for block 4 and OTI for block 5 on Non-Conforming Portfolio loans.
Question 1
If we do not require title insurance of any type on our portfolio loans, is it my understanding from the FAQs and REg that no matter what I would be required to quote OTI since the borrower may choose to go buy it.
Based on FAQ
GFE – Block 5
1) Q: Do loan originators have to provide a price for Owner‘s title insurance on the GFE?
A: Loan originators must provide an estimate of the charge for an Owner‘s title insurance policy in Block 5, "Owner‘s title insurance" on the GFE on all purchase transactions. For non-purchase transactions, the loan originator may enter "NA" or "Not Applicable" in this Block.
Question 2
But in regards to lenders title insurance, since we do not require it, it would not be required to be quoted?
Based on the instructions from the REG for block four:
Block 4, “ Title services and lender's title insurance. ”In this block, the loan originator must state the estimated total charge for third party settlement service providers for all closing services, regardless of whether the providers are selected or paid for by the borrower, seller, or loan originator. The loan originator must also include any lender's title insurance premiums, when required, regardless of whether the provider is selected or paid for by the borrower, seller, or loan originator. All fees for title searches, examinations, and endorsements, for example, would be included in this total. The charge shown in this block is subject to an overall 10 percent tolerance as described above.
Question 1
If we do not require title insurance of any type on our portfolio loans, is it my understanding from the FAQs and REg that no matter what I would be required to quote OTI since the borrower may choose to go buy it.
Based on FAQ
GFE – Block 5
1) Q: Do loan originators have to provide a price for Owner‘s title insurance on the GFE?
A: Loan originators must provide an estimate of the charge for an Owner‘s title insurance policy in Block 5, "Owner‘s title insurance" on the GFE on all purchase transactions. For non-purchase transactions, the loan originator may enter "NA" or "Not Applicable" in this Block.
Question 2
But in regards to lenders title insurance, since we do not require it, it would not be required to be quoted?
Based on the instructions from the REG for block four:
Block 4, “ Title services and lender's title insurance. ”In this block, the loan originator must state the estimated total charge for third party settlement service providers for all closing services, regardless of whether the providers are selected or paid for by the borrower, seller, or loan originator. The loan originator must also include any lender's title insurance premiums, when required, regardless of whether the provider is selected or paid for by the borrower, seller, or loan originator. All fees for title searches, examinations, and endorsements, for example, would be included in this total. The charge shown in this block is subject to an overall 10 percent tolerance as described above.
Bump...This may have gotten lost in the discussion of the HUD webinar.
I hope they post new FAQs to certify Dan's summary.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 03/18/10 08:39 PM
OT has to always be quoted in a purchase transaction.
What do you do in place of requiring title insurance? Do you do a title and lien search, do use a company that guarantees the title up to a certain amount via an affidavit? Any of those charges would be title services and disclosed in Block 4.
What do you do in place of requiring title insurance? Do you do a title and lien search, do use a company that guarantees the title up to a certain amount via an affidavit? Any of those charges would be title services and disclosed in Block 4.
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 03/18/10 08:42 PM
The material for todays HUD Webcast is now available here.
http://portal.hud.gov/portal/page/portal/HUD/webcasts/schedule
Thanks Dan, I will have to ask about what if anything is being done. The message I got was "We don't do anyting for title on in house"
http://portal.hud.gov/portal/page/portal/HUD/webcasts/schedule
Thanks Dan, I will have to ask about what if anything is being done. The message I got was "We don't do anyting for title on in house"
Posted By: MN Banker
Re: RESPA changes 1-1-10 - 03/19/10 01:37 PM
Originally Posted By: Dan Persfull
8. Cure - depending on the "complexity" of the cure you can show it as a credit in the 200 series of the HUD 1 or you can show the cure by line item. The easiest, simplest and the least prone to errors would be disclosing an overall credit in the 200 series and this requires the use of a HUD 1.
They also said if doing the credit on page 1, that this would no longer carry over to the comparison chart like the FAQ currently states. So, your comparison chart will still show it as out of tolerance.
Posted By: Reads Regs
Re: RESPA changes 1-1-10 - 03/19/10 04:53 PM
HUD has posted a PPT file of the slides used in yesterday's webcast. http://www.hud.gov/offices/hsg/ramh/res/respaimplement03182010.ppt
They have not yet posted the archived version of the webcast. When they do, it should appear on the following page.
http://portal.hud.gov/portal/page/portal/HUD/webcasts/archives
They have not yet posted the archived version of the webcast. When they do, it should appear on the following page.
http://portal.hud.gov/portal/page/portal/HUD/webcasts/archives
Posted By: Compli123
Re: RESPA changes 1-1-10 - 03/19/10 05:03 PM
Would a tax transcript fee be included in box 1 or 3 of the GFE?
Posted By: RolTyde
Re: RESPA changes 1-1-10 - 03/19/10 05:27 PM
There's a question here regarding termite inspection and the GFE. We don't require termite inspections but most of the sales contracts do. I say we don't quote even if it's on the contract because we don't require it. Some here think it should be added to the GFE as a changed circumstance. Who's correct?
If I am correct and we don't quote it, where are you showing these type fees on your HUD? We're having a hard time getting our system to let us add these fees without showing an alert that we are out of the 10% tolerance since it wasn't quoted on the GFE.
If I am correct and we don't quote it, where are you showing these type fees on your HUD? We're having a hard time getting our system to let us add these fees without showing an alert that we are out of the 10% tolerance since it wasn't quoted on the GFE.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 03/19/10 05:33 PM
Page 31 of the FAQs
GFE – Block 6
1) Q: What charges are disclosed in Block 6 of the GFE?
A: Block 6 of the GFE includes third party services required by the lender where the borrower is permitted to shop for the provider, other than Title services and lender’s title insurance (Block 4) and Owner’s title insurance (Block 5). These types of charges include, but are not limited to: survey, pest inspection and other types of inspections required by the lender. Charges that are part of the sales contract, but are not required by the lender, are not disclosed on the GFE.
Page 52 of the FAQs
HUD-1 – 1300 series
1) Q: What charges are shown in the 1300 series of the HUD-1 Settlement Statement?
A: The 1300 series of the HUD-1 Settlement Statement is used to record the charges for settlement services that are disclosed in Block 6 of the GFE as well as charges that are not disclosed on the GFE. Examples of some of these services may include charges for home inspections, radon inspections, and homeowner‘s warranty.
Posted By: MN Banker
Re: RESPA changes 1-1-10 - 03/19/10 05:45 PM
Originally Posted By: banker2008
Would a tax transcript fee be included in box 1 or 3 of the GFE?
According to the HUD webcast yesterday, that is a block 1 fee. Same with DU and LP fees.
Posted By: theloanbug
Re: RESPA changes 1-1-10 - 03/20/10 08:55 PM
If we were aware of the termite inspection from the contract is it ok to add it to the GFE even though we don't require it as a lender or should we leave it off completely?
Thanks
Thanks
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 03/20/10 09:47 PM
The only fees that go on the GFE are those that the ones the bank requires. If the borrower wants an inspection it shows on the HUD but not the GFE. If the lender REQUIRES an inspection, it goes on the GFE.
Posted By: theloanbug
Re: RESPA changes 1-1-10 - 03/20/10 10:00 PM
So, I am little confused about title/lenders insurance, if we do not require it, then why should we put on the the GFE? Can we leave this off also?
Thanks for your help. So if we don't pull a credit report we don't show it on the GFE and we wouldn't show it on the HUD, correct.
Also have another question for you. On the GFE we show our hazard insurance, but 99 perecent of the time at closing the insurance is paid for this is effecting my note amount and I can not change my note amount on my system. Can I give a new GFE and can show on this GFE cash instead of adding to proceeds of my note like we did on the previous GFE?
Hope this is understandable. I am sure it is not, I am trying so hard to understand all of this. I use Arta Lending Software.
Thanks
Thanks for your help. So if we don't pull a credit report we don't show it on the GFE and we wouldn't show it on the HUD, correct.
Also have another question for you. On the GFE we show our hazard insurance, but 99 perecent of the time at closing the insurance is paid for this is effecting my note amount and I can not change my note amount on my system. Can I give a new GFE and can show on this GFE cash instead of adding to proceeds of my note like we did on the previous GFE?
Hope this is understandable. I am sure it is not, I am trying so hard to understand all of this. I use Arta Lending Software.
Thanks
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 03/20/10 10:49 PM
[quote=theloanbug]So, I am little confused about title/lenders insurance, if we do not require it, then why should we put on the the GFE? Can we leave this off also? Whoa, let's back this up. Don't you require title insurance on every loan to show clear title and insure your mortgage is in first lien position? If not, do you do an attorney's opinion? Whichever one of these you use would go in Block 4 for title insurance.
Further, if the loan is a purchase, RESPA requires you to put the cost of owners on the GFE whether the borrower will get it or not. Remember, the GFE is now a 'worst case scenario' of costs the borrower could incur.
Thanks for your help. So if we don't pull a credit report we don't show it on the GFE and we wouldn't show it on the HUD, correct. You don't pull a credit report at all? How do you prove the credit info for your borrower?
Also have another question for you. On the GFE we show our hazard insurance, but 99 perecent of the time at closing the insurance is paid for this is effecting my note amount and I can not change my note amount on my system. Can I give a new GFE and can show on this GFE cash instead of adding to proceeds of my note like we did on the previous GFE? No you cannot give a new GFE just because a cost drops. Just show it on the HUD as POC. Why are you rolling the cost of hazard insurance into the loan amount? Sounds like your bank is trying to roll everything into the loan amount and then, if they don't need it, back the loan amount down. Are you trying to make sure the borrower doesn't have to bring cash to closing but isn't going to walk away with any either? It would seem to me, your lenders need to come up with a loan amount that can cover costs and/or giving the borrower cash back.
Hope this is understandable. I am sure it is not, I am trying so hard to understand all of this. I use Arta Lending Software. Can't help you with Arta. Keep reading other threads and I'm sure you'll get the hang of this. Remember, we're all in the same leaky boat bailing water just to keep afloat and understand.
Thanks
Further, if the loan is a purchase, RESPA requires you to put the cost of owners on the GFE whether the borrower will get it or not. Remember, the GFE is now a 'worst case scenario' of costs the borrower could incur.
Thanks for your help. So if we don't pull a credit report we don't show it on the GFE and we wouldn't show it on the HUD, correct. You don't pull a credit report at all? How do you prove the credit info for your borrower?
Also have another question for you. On the GFE we show our hazard insurance, but 99 perecent of the time at closing the insurance is paid for this is effecting my note amount and I can not change my note amount on my system. Can I give a new GFE and can show on this GFE cash instead of adding to proceeds of my note like we did on the previous GFE? No you cannot give a new GFE just because a cost drops. Just show it on the HUD as POC. Why are you rolling the cost of hazard insurance into the loan amount? Sounds like your bank is trying to roll everything into the loan amount and then, if they don't need it, back the loan amount down. Are you trying to make sure the borrower doesn't have to bring cash to closing but isn't going to walk away with any either? It would seem to me, your lenders need to come up with a loan amount that can cover costs and/or giving the borrower cash back.
Hope this is understandable. I am sure it is not, I am trying so hard to understand all of this. I use Arta Lending Software. Can't help you with Arta. Keep reading other threads and I'm sure you'll get the hang of this. Remember, we're all in the same leaky boat bailing water just to keep afloat and understand.
Thanks
Posted By: theloanbug
Re: RESPA changes 1-1-10 - 03/21/10 12:47 AM
No, we don't roll all the costs into the loan. I show the insurance poc on the HUD. The only costs I roll into the loan is abstracting work, attorney's op., filing fees, mortgage tax, and appraisal fee. That is all we used to show on our old GFE,is this all we need to show on our new GFE? Except now I have the credit report and lender pays that and that is my problem. I don't know how to show this so it will not show in my settlement charges and raise my loan amount.
If the customer does not get owners and you showed charge on the GFE then how do you show that on the HUD?
We did pay the mort tax also, but now we pass this on to the
customer, but when I calculate on the GFE it will always be less on the HUD. I realized this is a zero tolerance, but how do I prevent this being less. Remember I am in Oklahoma and mine is based on the mortgage amount which is also my loan amount. Maybe I am doing this wrong too. I calculate all my fees on the GFE with the amount the borrwer is borrowing and get my mort tax and then we do the same thing on the HUD and of course it is different because of the insurance on the GFE is calculated in the loan amount, but it is not the HUD because it is poc. HELP????? Are we looking at this all wrong.
Arta told me to show the credit report charge on my GFE as a
charge and show on the HUD as poc by the lender.
Thanks for all of your help and advice.
If we already had the loans and just combining all this customers loans together sometimes we don't pull credit.
We do abstracting and an attoney's opinion. So I don't have to show title insurance on the GFE since it is not a requirement for our bank.
If the customer does not get owners and you showed charge on the GFE then how do you show that on the HUD?
We did pay the mort tax also, but now we pass this on to the
customer, but when I calculate on the GFE it will always be less on the HUD. I realized this is a zero tolerance, but how do I prevent this being less. Remember I am in Oklahoma and mine is based on the mortgage amount which is also my loan amount. Maybe I am doing this wrong too. I calculate all my fees on the GFE with the amount the borrwer is borrowing and get my mort tax and then we do the same thing on the HUD and of course it is different because of the insurance on the GFE is calculated in the loan amount, but it is not the HUD because it is poc. HELP????? Are we looking at this all wrong.
Arta told me to show the credit report charge on my GFE as a
charge and show on the HUD as poc by the lender.
Thanks for all of your help and advice.
If we already had the loans and just combining all this customers loans together sometimes we don't pull credit.
We do abstracting and an attoney's opinion. So I don't have to show title insurance on the GFE since it is not a requirement for our bank.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 03/21/10 02:14 AM
Abstracting and attorney's opinion IS your equivalent of title insurance. That goes in Block 4 for Oklahoma the same way it does for Iowa which is another abstract/title opinoin state.
Less on the HUD is ok.
I still don't understand this. Maybe someone else will on Monday. Let's enjoy our Sunday without worrying about RESPA.
Less on the HUD is ok.
Quote:
The only costs I roll into the loan is abstracting work, attorney's op., filing fees, mortgage tax, and appraisal fee.
Posted By: theloanbug
Re: RESPA changes 1-1-10 - 03/21/10 07:34 PM
I thought block 8 was a zero tolerance also, be great if it is not.
Thanks.
Thanks.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 03/21/10 08:09 PM
Answering from home is not the way to try and do these sometimes. Got confused on Block numbers. I apologize.
Posted By: theloanbug
Re: RESPA changes 1-1-10 - 03/21/10 08:49 PM
I think block 8 is transfer tax. I just need to make sure that is where the mort tax goes is in block 8 which I just don't think is correct. Since the mortgage tax is filed on every mortgage. Like I said I believe this is where the doc stamps would be entered. Buyer/Seller Transaction. Doc stamps are based on the sells price.
My mortgage tax fee is entered on line 1205 right now. Which shows up on the comparison table of line 1203. Which I think is a zero tolerance area.
Have a great day.
My mortgage tax fee is entered on line 1205 right now. Which shows up on the comparison table of line 1203. Which I think is a zero tolerance area.
Have a great day.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 03/22/10 12:52 PM
Block 8, Transfer Taxes, cannot increase at settlement. Mortgage taxes do go in Block 8. See my post #1360204 in this thread for a quick summary of HUD's Web broadcast the other day. A change in the loan amount should be a changed circumstance that would allow you to issue a revised GFE for charges that are directly affected by the loan amount.
If you aren't rolling fees into the loan amount then in ARTA you need to show them as being paid by cash. If you are having trouble with no/partial cost loans see if this thread will help
ARTA and GFE
If you aren't rolling fees into the loan amount then in ARTA you need to show them as being paid by cash. If you are having trouble with no/partial cost loans see if this thread will help
ARTA and GFE
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 03/22/10 07:51 PM
So....since Oklahoma is a title exam state and that goes in block 4....on a purchase transaction....what, if anything, goes in block 5? Confused. My understanding is owner's title insurance isn't a requirement in Oklahoma, but it can and sometimes is purchased by the buyer. Must this be quoted, even if we aren't requiring it?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/22/10 08:56 PM
On a purchase, OTI must be disclosed, regardless or whether you require it or who will be paying for it, or even if they don't get it.
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 03/22/10 08:58 PM
Owners title insurance has to be quoted in Block 5 regardless if it's required or who pays for it.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/23/10 03:00 PM
Where would you place an MV-1 (vehicle title) fee? I'm a bit torn between block 3 and block 7. (i'm leaning towards 7)
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 03/23/10 03:15 PM
It's a public/government official filing fee to record your lien on the vehicle's title. I would agree with Block 7.
Posted By: Bullseye
Re: RESPA changes 1-1-10 - 03/23/10 03:50 PM
Just ran into a vehicle title fee as well. Dealer paid it, but it still had to be disclosed as a POC, right? But we also had the mortgage filing fee in Block 7 (line 1102 on HUD). We can't do part of the fee as a POC and charge them for the other. Any suggestions on how to handle?
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 03/23/10 03:55 PM
7. Block 11 - for homeowners insurance we no longer have to disclose a premium for refinancings and subordinate lien loans unless the premium is coming due and we will require it to be paid as a condition of the closing. You must still disclose homeowners insurance in Block 11 but you will show a $0.00 premium due and you must show $0.00. You cannot use NA.
Dan....was this just a clarification? I'm getting tired of telling my lenders one thing, then HUD clarifying something and having to tell them the opposite.
Dan....was this just a clarification? I'm getting tired of telling my lenders one thing, then HUD clarifying something and having to tell them the opposite.
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 03/23/10 04:18 PM
raitch, I've taken to ending any 'clarification RESPA' correspondence with a saying my dad liked to use...Subject to change without notice.
Posted By: Kahola
Re: RESPA changes 1-1-10 - 03/23/10 04:48 PM
Is it okay to list appraisal and credit report refunds on lines 204 and 205 of the HUD-1?
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 03/23/10 08:35 PM
Originally Posted By: raitchjay
Dan....was this just a clarification? I'm getting tired of telling my lenders one thing, then HUD clarifying something and having to tell them the opposite.
HUD is absolutely making things up as we go. They should have heeded the ABA's advise of delaying the implementation of this new regulation until they had it all figured out. The HUD web cast "changed" several things that are in contradiction to the regulation/FAQs. This is one of them. I, too, am tired of telling people something (either directly supported by the reg/FAQs or using an educated guess because there is no guidance) and then finding out HUD changed their answer or came out with new guidance. But we're going to have to get used to it.
Posted By: #Just Jay
Re: RESPA changes 1-1-10 - 03/24/10 02:22 PM
I am interested in hearing from others who may be working with local community groups or housing authorities that specialize in helping borrowers obtain DPA loans or grants, for a money purchase loan that you will be financing, and how you are treating these DPA loans/grants for RESPA purposes.
Thanks.
Thanks.
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 03/24/10 02:31 PM
Originally Posted By: RR joker
On a purchase, OTI must be disclosed, regardless or whether you require it or who will be paying for it, or even if they don't get it.
Does this include a loan to convert a construction note to long term financing? (i'm thinking yeah, but want to be sure)
Posted By: DD Regs
Re: RESPA changes 1-1-10 - 03/24/10 06:25 PM
Quick question. Can block one ever change on the GFE? Example.
Loan is for $100k with 1 point = $1,000. You have $500 in fees so you quote $1,500 in Block One.
Circumstances change and now the borrower needs $105,000. So the point charge is now $1,050. Can you reissue a GFE showing block one is now $1,550 or
do you issue a refised GFE with $1,500 still in block one and $50 now in block 2?
I would say since loan amount is a changed circumstance you could change block one?
Thanks
Loan is for $100k with 1 point = $1,000. You have $500 in fees so you quote $1,500 in Block One.
Circumstances change and now the borrower needs $105,000. So the point charge is now $1,050. Can you reissue a GFE showing block one is now $1,550 or
do you issue a refised GFE with $1,500 still in block one and $50 now in block 2?
I would say since loan amount is a changed circumstance you could change block one?
Thanks
Posted By: Sage
Re: RESPA changes 1-1-10 - 03/24/10 06:47 PM
Originally Posted By: raitchjay
Originally Posted By: RR joker
On a purchase, OTI must be disclosed, regardless or whether you require it or who will be paying for it, or even if they don't get it.
Does this include a loan to convert a construction note to long term financing? (i'm thinking yeah, but want to be sure)
raitchjay-would you consider what you are doing a purchase?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/24/10 06:59 PM
DD, according to the regs...you can change block 1 if the loan amount changes or the program, itself changes. HUD has contradicted themselves over and over on this. To list a portion of the origination fee in block 2 would be an accounting nightmare and, IMHO, should NOT be done.
[I'd have a strong argument for Block 1 changing with a rate lock in a non-broker transaction...but it's easy enough to fix that in Block 2, so why rock the boat!]
[I'd have a strong argument for Block 1 changing with a rate lock in a non-broker transaction...but it's easy enough to fix that in Block 2, so why rock the boat!]
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 03/24/10 07:47 PM
Yes Sage...i would.
Posted By: David Dickinson
Re: RESPA changes 1-1-10 - 03/24/10 08:10 PM
Yes.
Posted By: Brock
Re: RESPA changes 1-1-10 - 03/29/10 04:11 PM
“Since the bank does not currently review the broker's provider of servicer, we have chosen to have a change in closing agents as a Changed Circumstance and hold that fee to the 10% tolerance. The broker can submit this a as CC within 3 days of the change and we will re-disclose to the borrower with the different amount to eliminate the GFE refund.”
This is the type of policy we are getting from a large national institution. I know that it is a direct violation of HUD policy to issue a new GFE based on the borrower's selection of a provider not listed on the settlement service provider list, and I have provided that FAQ to them, but I don't know what else I can do to convice them that this is bad policy. They even state that they were examined by HUD last week and HUD didn't say anything. I say big deal on that, but I have no ammunition to convice them otherwise. Anyone have any thoughts?
This is the type of policy we are getting from a large national institution. I know that it is a direct violation of HUD policy to issue a new GFE based on the borrower's selection of a provider not listed on the settlement service provider list, and I have provided that FAQ to them, but I don't know what else I can do to convice them that this is bad policy. They even state that they were examined by HUD last week and HUD didn't say anything. I say big deal on that, but I have no ammunition to convice them otherwise. Anyone have any thoughts?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/29/10 05:50 PM
Yes, I do, Brock. The customer went off the list. It's not a CC...but it did take it out of the tolerance bucket. To me, they are incorrect on both of those counts...
Now, if a borrower changed closing agents from one on a list to another on the list...it's not a CC, but it's still subject to the 10% tolerance. This is why I encourage to use highest on the list in case this happens (which I just had a call on one that did just this, but without quoting the highest fees)
Now, if a borrower changed closing agents from one on a list to another on the list...it's not a CC, but it's still subject to the 10% tolerance. This is why I encourage to use highest on the list in case this happens (which I just had a call on one that did just this, but without quoting the highest fees)
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 03/29/10 05:55 PM
FAQ dated 1/28/10 p.19 #13
Q: If the borrower selects a service provider that was not selected or identified by the loan originator, is this considered a changed circumstance?
A: No, if the borrower selects a service provider that was not selected or identified by the loan originator it is not considered a changed circumstance.
Brock, you're just going to have to keep on going up the food chain at 'the large national institution' and challenging them. If you go ahead and do what they're telling you, you'll be in violation. Just 'cause a big boy says so doesn't make it so. I suggest email correspondence with their compliance head. Once things start being put in writing, they have a tendency to back off if they cannot support their position.
Q: If the borrower selects a service provider that was not selected or identified by the loan originator, is this considered a changed circumstance?
A: No, if the borrower selects a service provider that was not selected or identified by the loan originator it is not considered a changed circumstance.
Brock, you're just going to have to keep on going up the food chain at 'the large national institution' and challenging them. If you go ahead and do what they're telling you, you'll be in violation. Just 'cause a big boy says so doesn't make it so. I suggest email correspondence with their compliance head. Once things start being put in writing, they have a tendency to back off if they cannot support their position.
Posted By: Brock
Re: RESPA changes 1-1-10 - 03/29/10 05:58 PM
Joker, that is exactly where I am at. Thanks for the support. I now have a different lender saying it is a CC in the circumstance where we issued the GFE based on sending the loan to one instituion but for some reason it is now being delivered to a different one. Again, this is in direct conflict with a HUD FAQ. I can deal with complying with the REGs, but what I can't deal with are third party policies that contradict the regs. I want to recommned that we stop working with these institutions due to these policies, but I know that won't fly. Anyone else dealing with this?
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/29/10 06:05 PM
Well, you are correct again. The only way that becomes a CC is if the entire program changes...not just a different lender. Gee Whiz!
I sometimes wonder what these people are smoking! Even though there are still quite a few "clouds" on RESPA...some of it is crystal clear...that issue is one of the sparkly things!
I sometimes wonder what these people are smoking! Even though there are still quite a few "clouds" on RESPA...some of it is crystal clear...that issue is one of the sparkly things!
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 03/29/10 06:19 PM
Brock, keep fighting and taking it up to higher levels. If I had a nickel for every time I pushed it and asked to speak to their supervisor only to have the item suddenly loose importance.... Oftentimes you're dealing with people who only think they remember hearing something and they're running with it. You need to get to someone who actually has a copy of the FAQ in front of them and who can be told, 'no, what you're asking me to do would be a violation and I'm not doing it.'
Posted By: Brock
Re: RESPA changes 1-1-10 - 03/29/10 06:27 PM
Thanks Truffle and Joker. I agree that we can't just go along with these policies. I am in the midst of attempting to get in touch with their compliance policy heads right now. Not surprisingly, it takes some doing to get this sort of contact info. If anyone else is works with these big boys and wants to join in, let me know. I could use some collective pressure.
Posted By: Cloud9
Re: RESPA changes 1-1-10 - 03/29/10 08:33 PM
Please Help! We thought we understood how to cure a 10% tolerance violation, but we have read conflicting information. At the time of the GFE, we quoted an appraisal fee of $400. In processing the loan, it was decided that a additional field review would be required for an extra $300. Of course, no one declared this a changed circumstance, so a revised GFE was not given. On trying to correct this at closing, we showed the $300 as field review appraisal paid outside of closing by the lender on line 809 (outside the column). We also, showed the amount over the 10% tolerance (for all items) as a Tolerance Cure of $228.10 on line 208. The title company, who is closing the loan, wants us to simply show the $300 POC by the Lender on line 809. Can someone please help??
Posted By: rlcarey
Re: RESPA changes 1-1-10 - 03/30/10 12:13 AM
Please don't double post your questions:
http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1365820&gonew=1#UNREAD
http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1365820&gonew=1#UNREAD
Posted By: Tigg
Re: RESPA changes 1-1-10 - 03/30/10 08:04 PM
For loans not subject to RESPA for bank purposes (land only or commercial loans) has anyone heard whether the closing attorneys are allowed to use the old HUD-1 to disclose settlement costs?
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 03/30/10 08:11 PM
That is a common practice and to the best of my knowledge there is no prohibition from doing so.
Posted By: Tigg
Re: RESPA changes 1-1-10 - 03/30/10 08:51 PM
Thanks Dan the Man!
Posted By: HTP
Re: RESPA changes 1-1-10 - 03/31/10 04:52 PM
HELP!
Loan Officer disclosed Administrative Charges incorrectly in Block #3 (Courier Fee $25 and Escrow Waiver Fee $300) that should have been in Block #1.
Loan Officer also did not disclose the Appraisal Fee ($450) at all in Block #3.
We are at loan closing and will need to eat the fee . . . I was all prepared to do so on page 1 of the HUD . . . but our secondary market mortgage investor insists that the $300 and $25 must be shown on page 3 of the HUD in the 10% Section and used to offset the cure . . . . .
I don't feel these administrative fees that were disclosed in the wrong section of the GFE can be used to offset the fact that we did not disclose a $450.00 Appraisal Fee and will need to eat a portion of the Appraisal Fee.
Any advice? They want $300 & $25 shown on page 3 of the HUD . . . I don't think it can be there at all.
Loan Officer disclosed Administrative Charges incorrectly in Block #3 (Courier Fee $25 and Escrow Waiver Fee $300) that should have been in Block #1.
Loan Officer also did not disclose the Appraisal Fee ($450) at all in Block #3.
We are at loan closing and will need to eat the fee . . . I was all prepared to do so on page 1 of the HUD . . . but our secondary market mortgage investor insists that the $300 and $25 must be shown on page 3 of the HUD in the 10% Section and used to offset the cure . . . . .
I don't feel these administrative fees that were disclosed in the wrong section of the GFE can be used to offset the fact that we did not disclose a $450.00 Appraisal Fee and will need to eat a portion of the Appraisal Fee.
Any advice? They want $300 & $25 shown on page 3 of the HUD . . . I don't think it can be there at all.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/31/10 05:51 PM
I tend to agree with you...although it's a shame, they were not disclosed properly to begin with.
Posted By: HTP
Re: RESPA changes 1-1-10 - 03/31/10 06:08 PM
RR Joker -- Thank you for responding . . . .
If anyone else has any thoughts or advice -- please respond as well. We have corrected the error made by SVP of our Mortgage Operations area with how she was listing fees within Encompass --- so going foward this will not happen again; however, we are facing this same issue on other existing applications.
Investor is leaning on the below as their sole basis for their stance: "Appendix A to RESPA states "The comparison chart must be prepared using the exact information and amounts from the GFE and the actual settlement charges shown on the HUD–1/1A Settlement Statement."
Any other advice, would be much appreciated.
Thanks!!!
Hollie
If anyone else has any thoughts or advice -- please respond as well. We have corrected the error made by SVP of our Mortgage Operations area with how she was listing fees within Encompass --- so going foward this will not happen again; however, we are facing this same issue on other existing applications.
Investor is leaning on the below as their sole basis for their stance: "Appendix A to RESPA states "The comparison chart must be prepared using the exact information and amounts from the GFE and the actual settlement charges shown on the HUD–1/1A Settlement Statement."
Any other advice, would be much appreciated.
Thanks!!!
Hollie
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 03/31/10 06:40 PM
What surprises me, HTP, is that I'm surprised the investor wouldn't go with "worst case" which would be "highest reimbursement/cure"!
Posted By: ComplianceJungle
Re: RESPA changes 1-1-10 - 04/01/10 03:36 PM
I just found out that one of our loan processors did not disclose home owners insurance and owners title insurance on the GFE? My understanding is that we are suppose to disclose OTI on the GFE in block 5. Is there anything we can do to reconcile this?
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 04/01/10 03:58 PM
Is it a purchase transaction? If not, then OTI doesn't have to be on there.....i don't myself understand what violation you would have IF on a purchase, you didn't quote OTI, UNLESS the customer then purchased it....i mean...i think you could have a technical violation, but no cure....you don't quote it...it doesn't get purchased, thus doesn't show up on the HUD-1....again, seems like you could have a technical violation
Posted By: ComplianceJungle
Re: RESPA changes 1-1-10 - 04/01/10 04:05 PM
It is a purchase. The loan processor stated that the customer will not by it. As for the homeowners insurance, there is no tolerance for homeowners insurance if we require and the customer chooses. What is the cure for the homeowners insurance?
Posted By: Truffle Royale
Re: RESPA changes 1-1-10 - 04/01/10 05:15 PM
It doesn't matter whether the cutomer will buy owners title insurance or not. HUD requires it to show on every purchase GFE. Period. It's a 10% cure item so you're stuck curing the fact that it was left off the original GFE.
As for the homeowners insurance, you lucked out. This is a 'Charge that can Change' so you will show zero in the GFE column and the cost in the HUD-1 column but you won't have to cure it.
We're in the last month of the four month 'get used to it' perioid. Hopefully your processor has these things nailed down by the end of April.
As for the homeowners insurance, you lucked out. This is a 'Charge that can Change' so you will show zero in the GFE column and the cost in the HUD-1 column but you won't have to cure it.
We're in the last month of the four month 'get used to it' perioid. Hopefully your processor has these things nailed down by the end of April.
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 04/01/10 05:34 PM
I don't understand how you can be stuck for a charge that isn't incurred. If I do list OTI on the GFE and it isn't purchased....is it showing up on the HUD-1? To me, i would be stuck if i failed to list it on the GFE, and the borrower wants to and does purchase it. Then it would be a cure situation. We're a title exam state, so it's not that it's seller paid or borrower paid...it isn't, in most cases, being purchased at all. (Again, i understand it still needs to be quoted, thus my statement about being a technical violation if omitted.) If i don't list it and it isn't purchased...how is that a problem? 10% tolerance...ok....i have the fee i showed on my GFE (nothing) and the actual cost incurred on the HUD-1 (nothing). Where's the cure? I may be wrong; if so, someone please provide me guidance on where it says this in the regulation.
Posted By: ComplianceJungle
Re: RESPA changes 1-1-10 - 04/01/10 05:58 PM
In short, there is nothing we can do to cure. Note the price of the homeowners insurance on the HUD1 and list $0 for the OTI since they aren't going to buy it. The OTI is still going to be a violation since it wasn't noted. Is that correct?
Thanks
Thanks
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 04/01/10 06:07 PM
I stick with my first answer til proven otherwise jungle. Yes, i think it's a violation to not list OTI on a purchase transaction, but if the customer doesn't purchase it, to me there's nothing to cure.
Posted By: RR Joker
Re: RESPA changes 1-1-10 - 04/01/10 06:13 PM
I agree...it's a technical error, but won't skew your tolerance as zero and zero will wash out!
Posted By: Dan Persfull
Re: RESPA changes 1-1-10 - 04/01/10 06:14 PM
Omitting the OTI from the GFE on a purchase transaction would be a Sec 5 violation under the new rules IMO and for this particular violation there is no cure. You can't issue a revised GFE because there is no chaged circumstance.
If you disclose $0.00 on the GFE and $0.00 on the HUD then they wash each other out the same as disclosing $500 and $500 so there would be no 10% tolerance to cure, unless of course all the other charges exceeded the 10% of their totals.
If you disclose $0.00 on the GFE and $0.00 on the HUD then they wash each other out the same as disclosing $500 and $500 so there would be no 10% tolerance to cure, unless of course all the other charges exceeded the 10% of their totals.
Posted By: ComplianceJungle
Re: RESPA changes 1-1-10 - 04/01/10 06:42 PM
Since there is no tolerance regarding the homeowners insurance, we should be ok, right? Just making sure.
Thanks
Thanks
Posted By: raitchjay
Re: RESPA changes 1-1-10 - 04/01/10 07:03 PM
As far as refunding any money to the customer, yes, you should be ok. There's an unlimited tolerance for Block 11.
Posted By: Deena