HUD’s final RESPA Rules, issued November 17, 2008, made sweeping changes for the lending community. Some of the requirements actually went into effect earlier this year, but many are not required until January 1, 2010.
Of the RESPA rules that go into effect in January, there are a few critical changes that require careful consideration and adjustments within the loan origination process, including a new GFE form.
Some of the most significant changes include:
- The GFE is revised to an official three page form that summarizes costs. Line item detail is not included in this form.
- Lenders and mortgage brokers may only charge for fees related to obtaining the applicant’s credit report, prior to the borrower’s receipt of the disclosure.
- In addition to the GFE, mortgage companies must provide a list of required services borrowers may shop for, affirmatively identifying the service providers they recommend. The list must be provided at the same time the GFE is issued.
- The new HUD-1/1A forms require the charges from the GFE to be directly compared to the actual charges assessed at settlement and listed on the HUD-1/1A.
Look for compliance updates for the GFE in both Point 7.1 and 7.2. The current GFE form will be available for use until January 1 and will remain active within the program for cost itemization after the revised form becomes mandatory. In future releases the “old” GFE will be phased out and replaced by an improved screen to help users complete the GFE more efficiently and with better compliance controls.