New HUD-1 and GFE, an Overview....

As we approach January 1st, the looming feeling that HUD-1 and the new GFE will forever change the way we do business is putting a lot of people in a panic! With the amount of "propaganda" surrounding RESPA and its reforms, it's important to take a step back and really have an overview of the what's, when's, and why's! Firstly, the real objectives of these reforms are simple, to improve loan shopping, to provide early disclosure in an easy to understand format, as well as an easy comparison of GFE vs. HUD-1. With the rumors of RESPA postponing the implementation, stand firm in knowing and be prepared that this January 1st we will have a new HUD-1 and GFE in effect. Also know that lender's, do have the option to implement the new GFE earlier! What does all this information mean to you? Well if you are in the title industry, the lending business or real estate it means communication, communication, communication! One of the biggest points to understand and communicate correctly is the 10% and 0% "no increase" rule from the GFE to the settlement statement. There are four categories to this rule and are each crucial to understand, the 0% increase rule applies to lender set charges, such as origination charges and transfer taxes, the 10% increase rule only applies to any agent selected by the lender, identified as a preferred agent and thus chosen by the borrower. Subsequently leading to the final rule, borrower selected providers not suggested by the lender can increase under no percentile. Understanding this rule will lead to a better interpretation of the new HUD-1. It is just as important to be able to read and relate the new HUD-1 to the GFE; this is where the new third page of the settlement statement comes to play. The third page will list and state, charges that cannot change and compare to the GFE, and those that can change and compare to the GFE. Still overwhelmed? Still fear these new documents? Fear not, Title Junction is well informed and completely proficient in all regulations and implementations that tag along with the new HUD-1 and GFE, and will continue to keep you informed! Stay tuned for information regarding hands on HUD-1 and GFE classes!