So last week HUD emphatically denies the request for a delay in the effective date of the RESPA changes, stating that the industry will have had 14 months in which to prepare, which should be adequate time.

The same day they post additional FAQs on the changes! I hope 14 months will be adequate time for HUD. In the last answer of the 10-07-09 FAQs, they indicate they have not yet revised the Settlement Cost Booklet. Any guesses on how soon before January 1 this will be available?

Can anyone tell me where an advance mortgage release fee would be on the GFE?

Our Mortgage Department received notification from a title company that effective immediately, they would be using the average charge pricing under the new RESPA rules for government recording fees. They told us we have no option but to begin doing this immediately. My concern is that the bank is the one responsible for RESPA accuracy when the examiners are here. How do I know that the title company used the correct method to establish the average charge? Also, it would seem that every title company should be using the same average charge if this is the case because it's government recording fees. The average charge they came up with for residential refinances is $93.00 and residential purchase is $153.00. In a quick review of recent refinances, the price is typically $60.00 or under. The title company states that they will no longer charge for addtional recorded documents such as quit claim deeds, power or attorney recording or subordination recording fees. However, most of our transactions do not include these fees. Also, subordination recording fees are a finance charge so how will I be able to comply with Reg Z if they lump all of this together as an average charge? I'm hoping some others have insight into what their local title companies are doing.

Yeppers, I couldn't even pre-order the new booklets.

In regards to the attorney fees - we have some attorneys that break out their fee neatly for us to pull the doc prep out (for exhibit and/or deed) and some that just have one fee for prepared exhibit for mortgage and title opinion. Do I need to have the fee broken out by the attorney (I think yes) or can I just group it with title services since it is one fee? I think I know the answer, but don't want the attorney battle.

Anyone?

If FHA requires an inspection of the septic system, etc, would the inspection be a lender required settlement service? FHA isn't really the lender or originator, but the lender wouldn't grant the loan under these terms if FHA refuses to insure it. If it is a lender required settlement service, should we consider this a changed circumstance and issue a revised GFE showing this in section #6? (assuming the borrower can select the inspector).

Then, if the inspector identifies that repair work is needed, how should we handle the cost of the repair work on the GFE and HUD-1?

Not sure if this has been discussed previously as I could not locate any links.

Regarding a NO CLOSING COST LOAN, where the bank pays all closing costs:

The FAQ's indicate to show a GFE credit on line 2 which creates a credit in Block A. My question is what do we do as a lender when the following occurs?
1) The actual closing costs are less than the credit from the GFE Block A? The HUD-1 FAQ instructions are to carryover Block A to the HUD-1, which means the borrower could receive cash back on a No Closing Cost loan.
2) The actual closing costs are higher than the credit from the GFE Block A? Obviously the bank would intend to pay the closing costs that exceed the GFE Block A estimate. How is that reconciled on the HUD-1?

Thanks for your input in advance!
Regards,

CompDat, thanks for your question on my original posting.

You are correct there is no origination fee but there still can be third party fees which the bank intends to pay on behalf of the borrower (title, appraisal etc).

In reading FAQ #1 on page 21 of the 10/23/09 FAQ, we are instructed to insert a credit into Block 2 for the amount of to offset all third party fees, which passes a credit to Block A. The lender is then held to a zero tolerance on the amount of that credit. Then, I would change the credit to be higher on the GFE, so that there would be no difference net of the items that cannot change (I am pretty sure this is wrong but right now I don't know how to do it).

Does this help clarify the question?
Thanks

If you issue a GFE, you are bound by it. If there is a changed circumstance, you can change the fees ONLY affected by the change.

I think your lenders will want to stop issuing GFE's on prequals. They could issue another type of info sheet, but if they issue a GFE, they are "stuck" with it.

I just want to bring this issue up again. We have a program where the customers can apply online for their mortgage loan (Mortgagebot), and oftentimes they put "TBD" on the street name, then they will put a city and state. This online application (as required) automatically generates all of the disclosures including the GFE. This is frustrating.

Attorney fees question- in the FAQ's it says that attorney fees for preparing loan documents is considered part of the orgination fee in block 1. Would the preperation of an exhibit to go with the mortgage or prep of the deed count? Or are they refering to items like the note, security agreement, etc? Thanks