New Respa Rules Coming!

Hello all of my favorite real estate minded folks!

I wanted to pass along some info on the new RESPA rules coming down the line on January 1st. It is called RESPA reform. We had HVCC, we had HERA, and now we have RESPA reform.

What is it?

The objective of this new reform is to help clients reduce the surprises at the closing table. There are variances that are set up to make sure that the fees do not increase beyond a certain level from the time the new GFE is received, to closing.

How does this affect my clients?

The new GFE is set up so that once the number is put into the origination box, it can not change (there is a box that says 'this estimate is good from X to X). This also has whatever rebate the lender will be paying the broker, but shows that the broker will be crediting that rebate back to the borrower, so the settlement costs are lowered by that rebate amount. It might get very confusing for clients, and it is our job to set up those expectations in the beginning.

Clients also will not really be able to call around and get these estimates, they are only supposed to be issued once the originator (me) gets six items: 1) Name 2) Address of property 3) Social security number 4) Income 5) Loan amount and 6) Estimated value of property. That is right, we can not issue the new good faith until there is a property, so those shopping for a home can no longer get a 'to be determined' estimate. All of us lenders are looking for ways around this, to show the costs of the loan, without issuing a true GFE.

Like I said, this might get very confusing for your clients, it is up to us to make sure our clients are expecting these new things when talking to lenders. Keep in mind, as well, that retail banks are not subject to disclose all of these fees (darn banking lobby won on this one), so keep in mind that us brokers are the only ones that are really disclosing EVERYTHING.

There will be lots more questions, I am sure, as this rolls out. I am more than happy to help you or your clients with any questions they may have. Feel free to give me a ring.

All in all, this is going to help our clients from getting surprised at closing. So, it is a good thing :).

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Jake Planton

Proud loan officer with Rose City Mortgage

(C) 503-475-3788
JakePlanton.com