There's a new sheriff in town, actually it's the same old sheriff attempting to flex his/her muscles, if he/she has any.

The US Department of Housing and Urban Development has been working on a new GFE (Good Faith Estimate) for over a year, maybe closer to two and beginning Jan. 1, 2010 we're going to be using this new disclosure, or the new version of the old disclosure.

You can tell it's outdated as it addresses neg am programs, which the market has essentially banned.

You know closing the gate after the horse got out!

The new disclosure is 3 pages long as opposed to the previous one page document.

You know, more is better!

The beauty is that the Total Estimate of Settlement Charges is on the bottom of page one.

Personally I do expect many/most of the buyers to fall asleep somewhere on page 2.

The area currently drawing the most interest is in regards to the disclosure of yeild spread premium.

If you are a bank or an institution with a banking license, that being in most cases a mortgage company funding their own loans, but selling them at some point in time, you will not need to disclose ysp (yield spread premium) on the HUD.

This to me seems to be sneaky!

Where's the openness, the transparency? Apparently that's not necessary for the Banks.

You know how upfront they've been, now don't you!

If you are a Broker, you will pile all origination costs of your own, as well as the actual lender, into the origination fee. That's your point, processing, underwriting, etc. plus the lenders processing, underwriting, etc.

That could be a fairly big number! BUT

Yield Spread Premium to the rescue!

Now it will be shown as a credit to the buyer as opposed as a payment to the broker. The effect on the bottom line, disclosed on page 1;

NONE!

Page 3, which may turn out in practical application to be fairly useless, will disclose particular fees which may not change, those that can change up to 10%, and others which can change at random.

Does anyone really believe that a "good broker" will not be able to deal with this?

Ultimately little has changed. The bottom line should remain the same, so

It's NEW, but I'm not so sure it's IMPROVED!

From the   WHO

Meet the new BOSS, same as the old BOSS!