Before I search back 30+ pages, have we already discussed disclosing the SRP on the HUD? If not, I have a question, if so, I'll start looking!

I have some questions about the new GFE.

Question #1-In section 10 it discloses daily interest charges from the loan settlement date until the first day of the next month. Our lenders do not make the customer pay this at settlement. Do we still disclose this??? And this situation leads to the next two questions...

Because the customer does not pay this at settlement, it makes the first months payment higher because of the interest owed. This leads to a temporary negative amortization at the beginning.
Question #2-Does that mean we must mark "yes" in the "summary of your loan" section where it asks, "Even if you make your loan payment on time, can your loan balance rise?"
Question #3-What would we mark on the next question under "Summary of your loan" asking is the monthly amunt owed for principal, interest and any mortgage insurance rise?

Found this from David a couple of pages back...

Now if someone stumbles across the size of the form post that I swear I just read today, I'd appreciate a link. I thought they had to be legal but my forms company just wrote that Isn't the HUD-1 8.5x14"? Why can't HUD just pick one size and stick with it for everything? Oh, wait...that would make it easy and we all know life was not meant to be easy.

Not trying to be controversial, but the definition given in 3500.2 states ".. but only if such insurance is required by lender as a condition of the loan". Optional credit life is just that-optional to the customer. We try to sell it, but it's never a condition of getting the loan.

As far as Appendix A, when it discusses the 3 tolerance categories, within each of these sections the wording states "The HUD-1/1-A column must include any amounts that are shown on page 2 of the HUD-1 in the column as paid for by the borrower, plus any amounts that are shown as POC by or on behalf of the borrower". So it seems to me if you list credit life in the 900 series, you'll be disclosing it on the comparison chart in the appropriate category. I'm still of the opinion it ought to go in Line 104-105 right now, but I'm remaining open minded since half the things I thought about RESPA disclosure have changed in the last couple of months.

Truf...would you not collect what's due plus the escrow cushion and show the full amount in box 9? Or, would this be in the case the bill is due NOW and it's collected but not escrowed. Or, if you don't escrow, there is no place to put taxes.

IT's kinda crazy like homeowner's insurance. If they refinance and still have 6 months left on their policy, you aren't going to collect anything, but you show a year's estimate? I know we always have done that...but it seems a little silly, right?

I hope everyone can take a day off and enjoy Thanksgiving and not even think about RESPA.

Sox is right, I just want to add the following:
The Good Faith Estimate:
1. Doesn’t informs the borrower of the P+I+T+I payment
2. Doesn’t explain how much money to bring to closing
3. Does not list ANYTHING as POC.
4. Doesn’t list taxes – except telling them you are escrowing for it.

I think bankers are going to want to provide a piece of paper (in addition to the GFE) entitled "Now that you've received the piece of [censored] called the GFE, here's what you really need to know".

Seems like Optional Credit life's best fit would be in the 1300 section of the HUD 1.

Then it would be a part of the principal loan on 202, therefore coming out "in the wash" on line 302 and ultimately 303.

Bills are due in Jan & Aug. State law requires we give the borrower three options to pay. 1)In full in Dec. 2)In full in Jan 3)when due.

Currently we show the taxes on the GFE as poc but they're added in to the total estimate of money needed so the borrower knows what the money is for and that the bill is out there.

Come 2010, we'll show the cushion on the GFE but that's about it because until title is run, we have no clue what option they chose before and 99.9% of the time neither do they. Finding out the taxes must be paid is not a changed circumstance so we can't redisclose and tell them.

I can just imagine the conversation...
LO: 'You need to bring the $1000 we showed on the GFE to the closing tomorrow...and a paid tax receipt.
Borrower: 'Excuse me? I just got my tax bill today and I don't have $3000 laying around at Christmas to pay my bill.'
LO: 'Well, you'll get it back from your current servicer within a month or so after we send in the payoff.'
I'm sure you can figure out the rest of the conversation.

David, that needed a spew warning. I'm going to print it and put it on the wall so I have a when I need it.

You're right. I didn't do my homework well enough. The Settlement Statement must list EVERYTHING involved in the loan - required or voluntary. Line 904 specifically states ". . . .also used to list amounts paid at settlement for insurance not required by the lender." How is this not clear?


What you are quoting from is the "Charges that cannot increase" instructions. You're taking it out of context. The first sentence of the instructions for the comparison chart (in Appendix A) states "using the exact information and amounts from the GFE . . . " If it wasn't on the GFE, it doesn't get listed in the comparison charts. The specific instructions (broken out for the 3 charts) then tell you exactly what to list in each chart. No where do they mention things not on the GFE.

I just left a meeting with my boss which included reviewing a sample GFE. He pretty much said the same thing David. Simply shook his head and asked how this would be better for the consumer.

Truff and Force: I wasn't specifically responding to Force's issue, more an FYI, but I don't see any other place that looks like it would work in that situation - It's a charge we will "require to be paid", and we will, for lack of any other option, "choose the provider" of the services (the taxing authority). Think we can put it in there and keep a straight face?

(I won't make any comment about what sort of 'services' anybody gets for their tax dollars though - it's too late in the day...)

Would love to hear other opinions.

By the way - I'm with an OCC bank and we recently asked our regulators how they plan to approach RESPA issues in light of HUD's "give 'em a break" statement. We were told that no immediate guidance is in the works.

I have a loan officer that has suggested that he will just "estimate" every settlement service on the GFE at an additional $100.00 over what it may cost, and plead ignorance if challenged. That way he will have less of a chance of having an overage that must be refunded after closing.

Is this allowed?

From David's Q&A from his webinar:
The intent is to provide a meaningful GFE to an applicant so they can shop and compare settlement costs. While there may be instances where you disclose the highest cost, intentionally overstating fees to meet tolerance requirements is not acceptable. If you consistently over disclose fees, we expect examiners to criticize your practice as your GFE is not meaningful. Additionally, this practice would put you at a competitive disadvantage.

I think you need to ask your question. A lot has been going on with that SRP charge.

Here's a link to a very good article on YSP vs SRP:

http://www.lenderscomplianceblog.com/2009/08/service-release-premium-versus-yield.html

too late for that!

New Question about tolerance cures:

I'm very confused about tolerance cures...in the example on page 33 of the most recently issued HUD FAQ, the HUD indicates on page 2 that the customer paid $800 of a $1000 transfer tax bill (apparently the GFE showed the estimate of $800, and there is zero tolerance). There is also a $200 entry as POC Lender.

Why wouldn't the HUD show $1000 for transfer taxes in the borrower column, with a $200 credit on page 1?

What would be an example of a situation in which the cure is on page 1 of the HUD rather than shown as a 'POC Lender' on the GFE?

We were looking at loading up into the test server on Monday the 30th... just got notice this week from our LOS that it will now be the 7th, but still very, very tentative.

Our LOS is the same one Mortgagebot will be using for the forms and such, so I am curious is this will be knocking Mortgagebot's dates back as well.

When HUD says we cannot make changes to the GFE form, other than our Logo, does that mean we have to include the circular HUD logo (US department of Housing and Urban Development)on the top of the first page and on the bottom with the page numbers on the second and third pages? We are struggling to recreate some of this stuff. We've got the text and format exactly, but what about these symbols/logos?

These items may have been covered so I am sorry if I am repeating anything but,

1. is there any kind of waiting period (similar to TIL requirements) before closing once we re-issue a revised GFE? ie. does the borrower have to wait 3 days before they can close once we have re-issued a GFE?
2. do we disclose insurance on a refinance on the GFE?
3. do we have to redisclose a GFE on items where there is unlimited tolerance?
4. For purchases the seller picks the title co. We have no idea who it is going to be. Are we still in the 10% tolerance zone-it is not someone we identify so is this unlimited? Do we have to give them a list to shop from even though they aren't really shopping because it is the sellers choice, not the borrowers?
5. We do not require owners title policy, say at closing the borrowers atty reccomends the borrower get an owners title policy, since we picked the title co is that something we would then be required to be within 10% even though we do not require the policy?

Thanks!

I'm in the process of getting training and procedures together for three banks plus a mortgage sub for the 1/1/2010 RESPA changes - need some help with implementing E-Sign for mortgage loans. Any ideas of where to begin?

I just put together a program for ESIGN and will be happy to share...send me a PM with your email and I will send it to you.

Has anyone else noticed that Calyx Point added signature lines onto the third page of the 2010 GFE, I thought this was a big no,no? Has anyone asked Calyx about this?