RESPA Changes: Are You Ready For Some RESPA?
At this point, I am sure you have at least heard new rules regarding Good Faith Estimates and HUD Settlement Statements are on the way. If you are like most people, you are probably waiting for your company superiors to funnel the information to you or your team, which you will probably receive right before the Christmas holiday—which means you will retain maybe 1% of what your training covers.
In a perfect world, everyone at your company would jump on board, read the rules and inculcate them into their brain. I mean, what’s the worst that could happen if you don’t learn the new rules??? Well, how about a “tolerance violation”? Let’s face it: Anything with the word “violation” can’t be good for you. However, as usual in life there are consequences for not following the rules; and just as usual, many companies do not take the time to train up their employees to avoid such costly mistakes. Honestly, it is worth the time to read and understand what challenges you, your team or your company might be facing if you do not follow the new RESPA guidelines.
For example, did you know a loan originator will no longer be able to charge any fees prior to issuing a Good Faith Estimate except a credit report? Only after the applicant receives the Good Faith Estimate and acknowledges an intention of proceeding with the loan indicated in that particular Good Faith Estimate can you, as lender or mortgage broker, collect fees beyond the cost of a credit report for origination-related services.
How about the fact that the lender is responsible for ascertaining if the Good Faith Estimate has been provided by its mortgage broker? If the Good Faith Estimate is not provided in 3 business days, then the lender is in violation of Section 5 of RESPA, not just the mortgage broker.
Being that I am a settlement agent and familiar with the following scenario, this is one of my favorites. If a loan originator pressures a settlement agent into lowering their fees to reduce the charges, or otherwise “cover the difference,” as a condition of receiving future referrals of business, it may be considered a potential violation of RESPA Section 8(a). A complaint can be filed at RESPA and ILS if this is violated.
I realize not everyone wants to read a litany of rules, but you should check out the Q & A page, which gives a good overview of the new rules effective January 1, 2010 at http://bit.ly/19W3d3.
May 2010 be your best yet!
In a perfect world, everyone at your company would jump on board, read the rules and inculcate them into their brain. I mean, what’s the worst that could happen if you don’t learn the new rules??? Well, how about a “tolerance violation”? Let’s face it: Anything with the word “violation” can’t be good for you. However, as usual in life there are consequences for not following the rules; and just as usual, many companies do not take the time to train up their employees to avoid such costly mistakes. Honestly, it is worth the time to read and understand what challenges you, your team or your company might be facing if you do not follow the new RESPA guidelines.
For example, did you know a loan originator will no longer be able to charge any fees prior to issuing a Good Faith Estimate except a credit report? Only after the applicant receives the Good Faith Estimate and acknowledges an intention of proceeding with the loan indicated in that particular Good Faith Estimate can you, as lender or mortgage broker, collect fees beyond the cost of a credit report for origination-related services.
How about the fact that the lender is responsible for ascertaining if the Good Faith Estimate has been provided by its mortgage broker? If the Good Faith Estimate is not provided in 3 business days, then the lender is in violation of Section 5 of RESPA, not just the mortgage broker.
Being that I am a settlement agent and familiar with the following scenario, this is one of my favorites. If a loan originator pressures a settlement agent into lowering their fees to reduce the charges, or otherwise “cover the difference,” as a condition of receiving future referrals of business, it may be considered a potential violation of RESPA Section 8(a). A complaint can be filed at RESPA and ILS if this is violated.
I realize not everyone wants to read a litany of rules, but you should check out the Q & A page, which gives a good overview of the new rules effective January 1, 2010 at http://bit.ly/19W3d3.
May 2010 be your best yet!
Labels: GFE, good faith estimate, HUD, RESPA, settlement statement
posted by R. Jason Griffin at
10:02 AM
<< Home