Posted by John/CT on 11/13/08 3:34pm
Msg #269626

Final RESPA Rules

Thanx to PAW for posting the HUD link further down. According to HUD, their goal is to improve consumer understanding of the costs and terms of their mortgage loans. Most of this 341-page document is devoted to technical details, along with the original March, 2008 proposals, responses from various sources, and final HUD determinations. There are, however, two items of special interest to us as NSA's: First, is the complete overhall of the Good Faith Estimate (GFE), covering three pages of details not seen in the earler version. Hopefully, the borrowers will have received and reviewed this with their L.O. well in advance of our arrival. (How many times have we heard borrowers tell us they never got one?!?!); Second, is the re-worked two-page HUD-1/1A. The first page pretty much looks like the current version. The second page is a summary that provides a comparison of the charges shown on the GFE and the HUD-1/1A, along with a listing of the final loan terms ... as a substitute for the "closing script". Hopefully, again, there will be no surprises here. But .....

Reply by John/CT on 11/13/08 3:53pm
Msg #269631

Re: New HUD-1A & GFE Forms

For those interested in seeing/printing a copy of them: HUD-1A, Pages 189-190; GFE, Pages 203-205 on this link: http://www.hud.gov/offices/hsg/sfh/res/finalrule.pdf

Reply by MW/VA on 11/13/08 6:06pm
Msg #269662

Thanks for posting this.

Reply by Claudine Osborne on 11/13/08 10:18pm
Msg #269679

I really like the new HUD.

Reply by PAW on 11/14/08 6:11am
Msg #269684

HUD-1 and HUD-1a and the GFE

Thanks John for bringing this forward.

Just a nit-picky point ... The HUD-1 (seller/borrower) is three (3) pages. The HUD-1a (transactions without sellers) is only two (2) pages. It's the final page (page 3 or 2) that is the GFE summary section that will be so beneficial.

It's unfortunate that it won't be mandatory until 2010. Hopefully, many lenders and title companies will adopt the new forms sooner. It certainly will make our lives easier and probably the borrower's too!

Reply by PAW on 11/14/08 9:03am
Msg #269688

Re: HUD-1 and HUD-1a and the GFE available to download

All three new forms (GFE, HUD-1 and HUD-1a) combined in a single PDF file, is available for download/viewing.

http://www.pawnotary.com/forms/RESPA%20GFE+HUD1+HUD1a%20NEW.pdf

Reply by sue_pa on 11/14/08 7:25am
Msg #269685

the bottom line is it still won't change anything

Borrowers will listen to what they want to hear and ignore the rest, even when it's in black and white. The loan terms have ALWAYS been disclosed and look how many people now say they did't know. Of course they knew, of should have known. It's always been right in front of them, although not in this concise format. If they hadn't been busy planing soccer snacks, telling the dog for 1/2 hour to be quiet, answering the phone setting up plans for Saturday's movie, etc. they'd know. How often have we had one spouse who just wants to sign and then go back to making dinner, watching tv, mowing the grass, etc. I always MAKE them sit at the table the entire time and they get mad at me ... "he/she knows about this stuff, I don't pay any attention."

I basically like the settlement sheet - I personally would like to see the loan number, settlement agent's file number and estimated date of disbursement listed.

I've always wondered why the GFE and HUD didn't match line for line. I can't count the times I've taken one document or the other and we've gone down line by line because the borrower wants to find the differences but can't do it on their own.

How many times have we all shown up and they are expecting a loan of $100,000 and we've got $95,000? THEY STILL SIGN. I just did one within the past few weeks. I pull out the Note and the loan amount is $102,000. She looks at husband and says that's not right, it's really $100,000 - the mortgage insurance is making the difference - the LO explained it to her. She assures him they'll see other docs with the loan amount of $100,000. I say that their loan amount is $102,000 and they will see nothing showing $100,000. Naturally the next step is the phone call. LO explains to her that her 'real' loan amount is $100,000 (the amount she didn't want to exceed for some reason) but the paperwork shows the $102,000, even though that's not her 'real' loan amount. They sign away, happy as can be.

How many times are they expecting $10,000 back and we show $3,000? We make the phone call. "You're skipping two payments, you're getting back your current escrow, your payoff was a little high and you'll get a refund, and you don't have to make credit card payments so all that comes to $7,000." Borrowers for some reason think all that will happen, along with the $10,000 cash back. Logic should tell you that you can't pay off $20,000 of credit card debt and get cash back when your loan amount is only $5000 higher than your current payoff. Guess what, they still sign.

" know I told you your interest rate would drop to 4% and you'd pay this loan off in 10 years but remember I also told you this loan will be transferred to another lender? Well, those documents will come from them. " So they sign away at 7% and all those costs even though their current loan is 6%.

"As long as you make your payments on time for two years, we'll refund you all those mortgage insurance payments and cancel the balance of them"

I could go on and on. More disclosure will not help those that don't help themselves.

Reply by Linda_H/FL on 11/14/08 9:09am
Msg #269689

Amen, Sue!!! n/m

Reply by PAW on 11/14/08 9:11am
Msg #269690

Items on the HUD: Agent , Disb. Date

>>> I basically like the settlement sheet - I personally would like to see the loan number, settlement agent's file number and estimated date of disbursement listed. <<<

The top of the HUD-1 hasn't changed. It still shows everything you've ask about.


>>> More disclosure will not help those that don't help themselves. <<<

True. But these new forms are not more of the same, but, imo, a better way to show the same information. Between the GFE and the TIL, many borrowers get glazed eyes trying to figure out the numbers. Hopefully, the concise, in English, version will help clear it up. Of course, it won't do a thing for some, no matter how it's explained.

Reply by sue_pa on 11/14/08 10:44am
Msg #269696

Re: Items on the HUD: Agent , Disb. Date

Something else I'll probably never understand. I looked at teh HUD1A when I posted (I do now see the loan number box). Why in the world would the top of the HUD-1 and the Hud-1A be different. I'm sure there is a reason but I don't get it.

I still feel those that are well informed don't need more disclosure. Those that are either naive, dumb, or gullible can't receive enough disclosures to make a good deal for themselves. Anyone who allows us to come to their home without knowing any of the terms of their loan prior to our arrival because their LO says to them "don't worry, I gottcha covered" can't be helped with government intervention. Anyone who can't figure out a good loan on their own but allows someone who is going to profit from the deal to make their decisions can't receive enough disclosures.