Posted by Stamper_WI on 11/9/07 6:14pm
Msg #220522

Re Message from Equity National Partners

I got an email from them in regards to a new document in the loan package that must be signed to comply with state HUD requirements. I have often wondered why the borrowers have apparently NOT seen a final HUD within 24 hrs on a refinance. I know it's a requirement on a purchase (no RTC there). Does anyone have more information on this requirement as they apply to refinance? Here is the email in part.


Equity National Title Insurance Company
November 9, 2007

Equity Extended Family;

To ensure compliance with regulations and borrower satisfaction, one of our lenders, Advanced Financial Services, is adding an additional document to their closing package. Please take note, because this document must be executed at the closing table.



The document is entitled Acknowledgement of Disclosure of Final Loan Terms. In compliance with state regulations, this document ensures the borrowers have been provided with a true copy of the HUD settlement at least 24 hours prior to the closing date. The signature area of the document will display the borrower's full name in accordance with vesting signature requirements. Additionally, the borrower must hand date this document to ensure its proper execution. If the borrower refuses to sign this document, please contact Equity National immediately. Equity will contact the appropriate member of Advanced Financial Services to speak with the borrower. Failure to execute this document at the table may result in an incomplete closing transaction, and may ultimately result in the loss of the loan.

Reply by Loretta Reed on 11/9/07 6:25pm
Msg #220524

I got the same email. I hope that it is the truth and that this lender is not asking the borrower to lie on their behalf because the loan officer somehow dropped the ball. I will call the borrower before I go and ask them. I hope that they won't try to only pay me a partial fee if the borrower refuses to sign that.

Reply by Loretta Reed on 11/9/07 6:58pm
Msg #220531

I take it back, as long as I don't have to notarize it, they are going to pay me full fee, whether they sign or not.

Reply by Becca_FL on 11/9/07 6:26pm
Msg #220525

It may be an underwriting requirement in response to pending legislation.

HR 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007

Is WI one of the states that is passing state legislation for mortgage reform?

Reply by Stamper_WI on 11/9/07 6:51pm
Msg #220529

Becca

I haven't heard of it. They finally approved the budget a week or so ago and in researching what they are talking about now, they spend a lot of time tweaking what they can and cannot do as legislators.

Reply by Becca_FL on 11/9/07 7:11pm
Msg #220534

Zana, here's a few links

http://www.mortgagenewsdaily.com/1152007_HR_3915.asp

http://www.govtrack.us/congress/billtext.xpd?bill=h110-3915

http://www.petitiononline.com/HR3915/petition.html

Reply by Stamper_WI on 11/9/07 8:09pm
Msg #220547

Re: Zana, here's a few links

Thanks Becca

Reply by Linda_H/FL on 11/9/07 6:27pm
Msg #220526

I've seen a similar doc in a few of my packages - most of the time the borrowers signed, even though, after signing, they told me they HADN'T seen the HUD prior to the signing....thankfully it didn't have to be notarized...

Reply by Stamper_WI on 11/9/07 6:52pm
Msg #220530

Probably would have more punch

if it was notarized

Reply by BrendaTx on 11/9/07 7:06pm
Msg #220532

I have been seeing that one off and on for years...or a version of it. I think that it pertains to any mortgage on a home...but I could be wrong. Don't feel like looking it up, so take it for what it is....pulling it out of thin air.

Funny thing...never have I been involved in a personal land transaction where a HUD was provided to me ahead of closing...certainly not 24 hours....but yep...they'd like to have something saying you did.

Reply by BrendaTx on 11/9/07 11:15pm
Msg #220584

This is what I was thinking of...that a rule already existed on the previewing of the HUD 1 statement:

From: http://www.hud.gov/offices/hsg/sfh/res/sc2sectg.cfm

HUD-1 Settlement Statement. One business day before the settlement, you have the right to inspect the HUD-1 Settlement Statement. This statement itemizes the services provided to you and the fees charged to you. This form is filled out by the settlement agent who will conduct the settlement. Be sure you have the name, address, and telephone number of the settlement agent if you wish to inspect this form. The fully completed HUD-1 Settlement Statement generally must be delivered or mailed to you at or before the settlement. In cases where there is no settlement meeting, the escrow agent will mail you the HUD-1 after settlement, and you have no right to inspect it one day before settlement.

Reply by MikeC/NY on 11/9/07 7:08pm
Msg #220533

This is interesting...

My experience has been that although they may be aware of the bottom-line figure, most borrowers never see the HUD1 until I show up carrying it. Many don't even recall seeing the Good Faith Estimate (which they're sometimes required to sign at closing). We all know that it's often the HUD1 that holds up the edocs and gets us scrambling to make it to a signing on time, so if this lender is committing to providing a copy of the HUD1 at least 24 hours prior to closing, that's a really good thing.

OTOH, if it's just a form they want the borrower to sign, it could become a real pain in the butt for the SA. Borrower refuses to sign off because they never received a copy of the HUD1, and now your fee is hanging in the balance. I would touch base with the borrower before going out there in these situations, just to make sure they actually received a copy. I wouldn't want to be put in the position of asking them to sign a false statement, even if it's not something I have to notarize.

Reply by PAW on 11/9/07 7:49pm
Msg #220539

EFS and Equity National Title are both RI companies, so it may have something to do with Rhode Island statutes or pending legislation. I don't know.

HR 3915, as far as I can tell, does not have any such conditions. But there may be some amendments that I'm not aware of.

If RI is a table funding state, like FL and many others, the final HUD must be available at "closing". However, in the strictest sense of the word, the closing isn't effected until disbursement, after the expiration of the rescission period. So, for a refi with an RTC, the borrowers would in fact be receiving their final HUD at least 3 days prior to closing, assuming there are no corrections to be made during the rescission period.

Reply by Stamper_WI on 11/9/07 8:14pm
Msg #220548

I wonder who that Mark D Spencer is?

That arranged for the petition to say "no" to the bill

Reply by Becca_FL on 11/9/07 8:25pm
Msg #220550

Hey Paul, Don't ask me where I read it, but I do recall....

reading somewhere that the new proposed HUD policy and procedure will require full disclosure of the HUD to buyers 24hrs before settlement. I have read so much lately, it's hard to say where I got that tidbit. Maybe we could ask our new resident TC spokesperson Diane?

In the meantime, I'll see if I can find the source.

Reply by Becca_FL on 11/9/07 8:28pm
Msg #220551

Revision: Borrowers NOT Buyers

Buyers already have the provision. What I meant to say was borrowers.

Reply by JK/TX on 11/10/07 12:53am
Msg #220603

Re: Revision: Borrowers NOT Buyers

In TX on a Hm Eq. Loan the borrower must see and sign the HUD one business day prior to closing. The rule prior to that was the borrower must see and sign the HUD 24 hrs prior to closing....so as the law read, if the borrower signed the HUD at 4pm on Tuesday they could not close until after 4pm on Wed..... the way the law was written.

Now, it's one business day,,,,, did not solve the hr. issue.... gotta love those legislators.

but i have seen a doc in the loan pkg's off and on for a while now (tx) for the borrower to sign waiving their right to review the docs and HUD 24/day before closing (purchases and R&T refi's)............ as if many ever knew they had that right!

If the 24 hr rule were applied to all closings, purchases and refi's, it would create a nightmare, as if it's not bad enough.....

Reply by jba/fl on 11/10/07 3:34am
Msg #220611

Re: Revision: Borrowers NOT Buyers

"If the 24 hr rule were applied to all closings, purchases and refi's, it would create a nightmare, as if it's not bad enough....."

Why would it cause a nightmare? The docs are ready usually early, it is the HUD that holds things up because of the last minute work which can be prepared the day before just as easily as the day of. So for some companies, they may not have a closing today because they are always a day late, but then they catch up and they would be back on track.

I can schedule my work - why can't they? I see payoff letters with dates well in advance of actual closings, w/fax date/time stamps well in advance, so that means it is just sitting in a file or on a desk until someone is told, 'we're closing this today' and then the crunch is on?

Reply by BrendaTx on 11/10/07 7:32am
Msg #220615

Re: Revision: Borrowers NOT Buyers

**but i have seen a doc in the loan pkg's off and on for a while now (tx) for the borrower to sign waiving their right to review the docs and HUD 24/day before closing (purchases and R&T refi's)............ as if many ever knew they had that right!**

Whew...I appreciate that input. I said that a year or so ago and people thought I was crazy.

Reply by DianeCipa on 11/11/07 10:17pm
Msg #220729

Re: Hey Paul, Don't ask me where I read it, but I do recall.

Aren't you sweet!

Our present rules include the provisions that the borrower may request the HUD-1 24 hours before closing and the HUD-1 provided might be incomplete if all info isn't available like the lender instructions. The borrower always has the right to delay closing so that they have the full 24 hours to review a completed HUD-1. Here's a post from Title Insurance Talk on the subject:

http://titleinsurancetalk.blogspot.com/2007/02/hud-1-settlement-statement-one-day.html

We're all waiting for the new RESPA reform proposal. HUD delivered it to OMB for review and except for an apparent leak to NAMB of at least the new GFE, no one outside of the regulatory framework really knows what's in there. There is an expectation that it will contain a requirement for the HUD-1 to be available 3 days prior to closing. That's probably what you heard Becca.

Reply by MichiganAl on 11/10/07 10:56pm
Msg #220673

I agree with your interpretation of closing

Someone e-mailed me about this today, and that was my response as well. Loan doesn't CLOSE until RTC expires.