Posted by CommLoanPA on 2/4/09 3:28pm
Msg #276535

RESPA Loan question from a newbie

My background is in banking and I'm experienced in closing loans originated by my former employer. However, the term "RESPA" loan is new to me. Explanation, please?

Reply by Derrick/MT on 2/4/09 4:08pm
Msg #276540

Being in banking you should already be familier with the RESPA requirements when doing a loan. The bank/lender has 3 days from the date of the inital application to make sure they provide the application with a good faith est., Early TIL, and other disclosures associated with the initial loan request. All a RESPA closing is, is the notary going out with those docs and others to get them signed and also picking up any other docs that the lender has requested and then shipping them back to the lender to start the loan process.

Reply by Linda_H/FL on 2/4/09 4:26pm
Msg #276541

It's not a RESPA loan - it's RESPA signing...

the signing of the initial application and disclosures and collecting supporting paperwork from the prospective borrower...that's probably where your confusion is coming from...

Reply by Marian_in_CA on 2/4/09 5:13pm
Msg #276543

The term "RESPA signing" isn't a loan signing or closing so much at it refers to a loan application. This includes a copy of the original URLA/1003 and required disclosures...and picking up anything the borrower needs to get to the lender to start the loan process. It is NOT a loan closing...more of an "opening".

Of course, I've never liked the the term "closing" because we AREN'T closers or closing agents. That happens after we're done with the paperwork.

Reply by ReneeK_MI on 2/4/09 5:43pm
Msg #276547

It's not a term I ever heard in lending, either ...

It's an origination package, hopefully already printed and just in need of signatures. They'll also want you to pick up the usual grocery list of copies/docs from applicant.

I believe using NSA's for this is more of a sales tactic than anything else - gives the applicant some sense of engagement, perhaps in hopes they won't do a lot of shopping.

Anyway - you'll find a lot of the jargon used 'out here' is totally different than what's used 'inside', this being one of them.

Reply by MsM/CT on 2/4/09 7:19pm
Msg #276553

Re: It's not a term I ever heard in lending, either ...

In the years I've worked for a lender and a real estate attorney, "RESPA" was never used to describe an origination package. We used RESPA as an acronym for the Real Estate Settlement Procedures Act and that's it. When I started working as a signing agent, when I started hearing it used as a replacement for origination package.

Reply by Marian_in_CA on 2/4/09 9:07pm
Msg #276561

Re: It's not a term I ever heard in lending, either ...

I'd never heard it either (in that context) until I started seeing it mentioned here. It seems to be jargon specific to NSAs and some select lenders. When I hear RESPA I, like many... think of the actual rules regarding disclosures, GFE, etc.... that prevents kickbacks and extra fees and such. I'd never really thought of it as a type of signing per se until I saw it here.

Everywhere else this is called a 'loan origination signing', 'origination package' or a 'mortgage package'. It is definitely not any kind of 'closing' though, for sure.

Reply by CopperheadVA on 2/4/09 9:23pm
Msg #276564

Re: It's not a term I ever heard in lending, either ...

<< hopefully already printed and just in need of signatures >>

Oh boy, I had a RESPA signing the other day (I posted about it Tuesday due to the L/O telling borrower to miss two mortgage payments) and nothing was filled out. The 1003 and all the VA docs had to be completed. It took forever!

Reply by Charles_Ca on 2/4/09 7:45pm
Msg #276556

Every business and profession has its jargon and this area is no different. Unfortunately there does not appear to be a jargon dictionary for notary work yet. You'll soon find other quirks in this business and some of it makes no sense at all.

Reply by Lee/AR on 2/5/09 7:50am
Msg #276584

Amen that, Charles...

I'm a Notary. I do signings. I don't do 'closings'. I'm an Independent Contractor. I'm not an 'agent'. Tho', after all these years, I can say the words without choking simply because they've become the accepted jargon of the business. However, we need to draw the line at 'doing notaries' and "I have/just got 'my notary'.

Reply by ReneeK_MI on 2/5/09 4:58am
Msg #276578

I suppose I should clarify for posterity ...

I meant I never heard of "RESPA" used as a term meaning to have an origination pkg signed, not that I never heard of RESPA.

It would seem prudent of those lenders who do these 'Respa signings' to use a term FAR away from implying a connection to actually originating, though - since most (all?) states require a license to originate. I don't see how doing a 'Respa signing' would venture into actually originating (IMHO) but still, prudent to avoid the implication.

Reply by Shoshana Roller on 2/5/09 8:18am
Msg #276588

Not all states require a license to originate loans

In AZ, an LO works under a mortgage broker who has a license. This is one of the reasons loan fraud is rampant in this country. Yesterday, I came across a loan that was obvious fraud. The borrower's income is $1555/mo (fixed) and her mortgage payment is $1467/mo. This was obviously a stated income loan (when it was allowed).

Reply by ReneeK_MI on 2/5/09 10:43am
Msg #276614

Question, Shoshana ...

The LO would have to work UNDER the licensed broker or banker though - correct? Or are you saying you can originate in AZ w/out any licensing whatsoever, perhaps completely independent?

Reply by Shoshana Roller on 2/5/09 1:11pm
Msg #276637

Re: Question, Shoshana ...

Yes. I work for a licensed broker. He is responsible for signing off on the loans I originate. However, this loan I cited above just confounds me at how people can get away with things. That loan was unconscionable!