Tuesday, November 3, 2009

Good Faith Estimates and HUD-1's - new and improved as of Jan 1, 2010

There will be new and improved Good Faith Estimates (GFE) and Settlement statements (HUD-1) going into effect on 1/1/10.  The primary purpoase it to improve the upfront disclosures and limit the amount estimated charges can change.  This could help to save consumers almost $700 in closing costs.

The GFE is being reduced from 4 pages to 3.  These pages will include an instructional page to help borrowers understand their loan.

To help borrowers compare their GFE with the HUD-1, each designated line on the HUD-1 will reference the relvant line from the GFE.

The new HUD-1 will require lender payments to mortgage brokers (yield spread premiums) to be disclosed in a clearer fashion.

Loan originators will be required to provide borrowers with their GFE 3 days after the receipt of all necessary information from borrower.

HUD (Housing and Urban Development) will allow lenders and closers to correct potential violations of RESPA's (real estate settlement procedures act)  new disclosure and tolerance requirements.  They will have 30 days from date of closing to correct errors/violations and repay consumers any overcharges.

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