whew...I'm beginning to question myself at times...I'm due in 30 minutes for my first of two training sessions on this...yikes! This is soooooooo nooooooooooooot funnnnnn!

Apparently HUD is overwhelmed too...still no new updates on the Q&A since 10-22? If David's webinar and the questions rolling in from it are any indicator...I'm guessing the powers that be at HUD are deluged by now!

As well they should be for this byzantine mess of disclosure rules. I understand the intent here - let's face it, there are PLENTY of slimy folks in the mortgage industry who FOCUSED on luring people in with disclosures of low-ball rates and rock bottom fees....UNTIL the signing of the actual loan docs when "sticker shock" would set in because almost all of the fees were much higher than what was originally disclosed. Yeah, the old bait and switch.

But rather than focusing enforcement efforts to go after the minority of bad apples, HUD tries to come up with a set of rules to close all loopholes which instead will only serve to strangle the availability of credit from legitimate lenders - meanwhile the slime-bags will still find a way to ply their trade unabated.

I agree with David. The problem becomes that typical does not mean exclusive. If you know your seller will pay the fee, and something happens where the seller will not be paying the fee, I think you are going to have a difficult time explaining why this is a changed circumstance that you did not know, to reissue a GFE.

Stands up and applauds.

Comp Dat-I am not sure based on your comment that you agree with David or not-if you reduce fees based on the seller agreeing to pay them and they end up not paying, are you saying that may not meet a "changed circumstance"?

My reading of that FAQ is very clear-not a grey area IMHO.

I was on that call too

David, when/where will you be issuing the Q&As? Mostly wondering the where since I think it'll take a while to get through them.

Sox, no fees were reduced. Let me clarify. I am saying that I believe you have safe harbor for owners TI (at least in my state) because it would be very abnormal for a buyer to pay these fees. So, lets say you know the seller will be paying for this up front and issue a GFE not listing owners TI. However the seller kicks and screams and the buyer agrees to pay. An examiner should have the intution to question, how the new fee was put on the GFE and why you really didn't know about this. (provided you reissue a GFE). So yes, I do agree with David and I do believe in some (very limited) cases you can not put fees paid by the seller (go back to the pages in the 30s where David and I have a very deep conversation about this in this thread), however it can become a real issue, and one that I feel is not easily defensible if an examiner wants to take issue with it as a changed circumstance.

Wow Sox I totally apologize. I did not realize that HUD had issued a new Q&A and this was answered. I also see that David now agrees with my original statement back in October that Owners TI should be listed on the GFE. I had not kept up on this as much lately do to finalizing the new Reg. GG issues. My apologies.

I guess I would say unless the law says the seller pays a fee, it should be disclosed. There is no guarantee the buyer is even going to want Owners Title, but it still needs to be disclosed. I would also be concerned about consistency in disclosing. JMHO

(edited to add-this was posted before I saw compdats reply above)

I retracted my statement above.

I've been studying the sample GFE/HUD-1 that the OTS provided in their conference call and I'm REALLY confused.

On the GFE, in block 6, they have a total charge of $295.00. On the HUD-1, line 1301, they have a total charge of $270.00. On page 3 of the HUD-1, in the 10% tolerance box, there is no line 1301. I thought block 6 had a 10% tolerance? Why wouldn't this total charge be listed in the comparison box? Is it because the fee went down from $295.00 to $270.00?

Also, would homeowners association fees not be listed on the GFE but listed on line 1304 on the HUD-1?

BNKO-

I have that same presentation, and it shows the $270 in block 6, not $295. You are correct in noting it isn't shown in the sample HUD, page 3. I don't recall if that oversight was mentioned during the call.

As for HOA, it would not show on the GFE, and any proration at closing would be handled on page one as it is now.

Those OTS GFE and HUD-1 have some errors in them. David pointed that out in the webinar.


On the GFE, can you put the loan officer's email address or does it have to be the bank's email address. Thanks

Okay--say we have procedures that state "for preapproval purposes only" we need XYZ information. RESPA states "the final rule specifically prohibits the loan originator from requiring an applicant, AS A CONDITION FOR PROVIDING A GFE, to submit supplemental documentation..." Can't you argue that you are obtaining the information for "preapproval purposes only" and not as a condition for providing the GFE? I know that might not be a strong argument but how can you do away with preapprovals? Don't most realtors want that before writing a contract to sell a house?

I believe you will do just fine!

Maybe the better question is 'what documentation do you really need to do a pre-approval'?

We get a request (not an application with address) that has borrowers' names, SS#, approximate loan amount and estimated annual salaries. We pull the CB and run DU. Based on that we can tell the borrowers that it appears they will be qualified for $X but that we would need documentation for full underwriting before we could approve the loan.

We do something similar TR. The preapproval is pretty generic.

I think you are mixing terms...preapproval vs prequalification. what ya'll have described fits prequals.

A preapproval generally goes through all of the normal underwriting and approval process...then a commitment is issued that basically states if it changes...you may no longer be approved. (more or less)

The in-house training went really well and it opened an opportunity to further discuss other issues (like HPML's, etc) in a live discussion.

Tomorrow brings in the secondary market folks as well as several attorney's and their assistants. I hope it goes as well, although I imagine the concentration of material issues will be quite different.

Can you detail the discrepancies that David pointed out in his webinar. I was not able to attend. Thanks.

Out of curiosity is anyone planning on using the seventh item in the definition for application “other information deemed necessary by the lender” ? If so what?

David posted about this in his blog. See this web page. http://www.bankerscompliance.com/blog/respa-training-and-examples.htm

Thanks for the link.

Ok I am not sure if my question was answer. For in-house loans we do not require title insurance. However, after a review of the title opinion, the borrower may purchase titl insurance. We have never listed title insurace on teh GFE before as it has always been optional. Will we need to start listing it on the new GFE incase teh borrower wants to purchase? If we don't and then they decide to purchase, is that a changed circumstance?

ahk-that is similar to owners title insurance-always optional for the borrower so we never disclosed it. Under the new regs we have to disclose. I would say you would want to disclose it.

Thanks for the response. That is what I was thinking.

Ok another question, we have an Attorney look at the title opinion or search. I initall thought the attorney fee would go in Block 6: Required Services you can shop for, but now I am thinking it should go in block 4 for title services.

We have preapred a list of attorney's they can use. If they use one on the list then they are subject to 10%, if they don't no worries. Are we required to have a list of providers for title services?