RESPA Reform

There are some changes coming as the federal government finalizes the reform however it will most likely be close to year before we see any big changes at closing.

The Bush administration revised the Good Faith Estimate and HUD-1 forms in November. The idea is to make it easier for borrower’s to compare fees between the GFE that they are given within 3 days of applying for a loan or any re-disclosure prior to closing and the HUD-1 form they are required to sign at closing. It’s best for you to ask your title company to give you a copy of the HUD-1 at least 1 day prior to close for review so you have time to make comparisons and be sure you agree with what you are being charge. The new GFE form and the new HUD-1 form will be required as of January 1, 2010. The most significant change, as I see it, is that there are some costs that cannot be changed from what is stated on the 1003. Those costs include origination fees and transfer taxes. There are some third-party fees that can change but are limited to a maximum change of 10 percent. If it is discovered at the closing table that there are issues with the fees, the loan can still close but the discrepancies must be worked out w/I 30 days. If you would like to see the new Good Faith Estimate (GFE) form click here. For the HUD-1 click here