HUD is proposing rules to clarify the Real Estate Settlement Procedures Act (RESPA). As part of the closing process, HUD wants to require the person (i.e. the signing agent) to read a prepared "script" to the borrower and "explain it if the borrower has questions."
If this proposal by HUD is approved, it threatens the jobs of signing agents in the entire country.
HUD wants borrowers more informed on the terms of their loans and explain costs which is all well and good; however, by law, notaries are prohibited from explaining the terms and conditions of the loan.
If this federal rule is enacted, it could greatly affect the Signing Agents' ability to attend the signing. Hence, loan officers would mostly likely have to go to the signing appointments themselves and inform the borrowers or "read the script." The notary would be there to notarize any required documents.
The NNA has prepared and sent formal comments to HUD and encourage anyone in the industry to read the document and send their comments by May 13. The following points should be commented upon and re-worded so they are unique and in your own words:
- The closing script presents additional costs, delays and liability for everyone in the mortgage industry
- HUD should provide viable alternatives to the script that wouldn't force any one group to shoulder this responsibility
- If alternatives aren't provided, the script should be eliminated
Comments may be submitted electronically to HUD at http://www.regulations.gov/. On your submission, reference must be made to Docket No. FR-5180-P-01 and refer to the title "Real Estate Settlement Procedures Act (RESPA): Proposed Rules To Simplify and Improve the Process of Obtaining Mortgages and Reduce Consumer Settlement Costs."
For further information, visit the National Notary Association's website: http://www.nationalnotary.org/.
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This seems pretty cumbersome and not practical. Loan officers can't go to every closing as a practical matter. There are out of state buyers.