RESPA mandates use of new GFE and HUD-1 by January 1, 2010 The goal of the current reforms taking place in the mortgage industry is a more informed consumer and, ultimately, better home financing decisions by homeowners.
Beginning January 1, 2010, all lenders will be required to use the new Good Faith Estimate (GFE) form, and the new HUD-1 Settlement Statement must be used in conjunction with the new GFE. Quoted costs in the GFE are subject to “tolerances,” which are defined as the maximum amount by which the charge for a category or categories of settlements may exceed the amount of the estimate on the GFE. (For more information about actual changes to the HUD-1, the GFE, and tolerances, see the October 2009 Technical Bulletin.)
While there has been some concern among our Realtor clients that use of the new GFE will delay closings, this should not be the case. Realtors will still do business as usual, taking care to provide the borrower with additional information upfront that will allow consumers to shop for the best loan and feel they have made the best borrowing decision.
A few proactive steps at the beginning of the transaction can go a long way toward avoiding closing delays. For example, Realtors can encourage clients to lock interest rates early rather than gamble on a small dip in interest rates. Realtors can also assist their clients in negotiating the final purchase price up front rather than haggling about price later.
Land Title’s Proactive Processes
Land Title has been working closely with industry experts at NAR, CAR, CMLA, and HUD to ensure we have accurate, up-to-date information and answers for our clients. Additionally, we’ve invested in over 1,500 hours of training for our staff and updated our processes and systems to help our clients meet the new requirements accurately and efficiently.
Our new forms are ready to go when you are, whether you start using them now or when they become mandatory January 1, 2010. Your closing team will inform you immediately when a change in circumstances causes our fees to change.
Source - Land Title Guarantee Company
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