Beaufort County, South Carolina Homebuyers, it is important to be aware of these changes, since--according to HUD-- these new regulations are to your advantage. And --we are told--you might save on average $700 on your closing fees.
BUT HONESTLY--I am not going to bet on that! From my point of view, the more regulation we have, the more complicated it gets for all involved in a real estate transaction. Most of us are well aware that estimates on "saving money" that come from a governmental agency is highly questionable.
In the name of keeping everyone honest and protecting the consumer, most of us know, the reverse is often the case. My hunch is that it will take longer to close a real estate transaction then previously. It is tough enough getting financing. The last thing we need are regulations that bog us down. Be that as it may--here's the deal...
What is RESPA?
RESPA is the acronym for the "Real Estate Settlement Protection Act"
The Real Estate Settlement Procedures Act (RESPA) was enacted in 1974. It's purpose was to provide consumers protection from excessive fees by reducing closing costs associated with financing the purchase of homes. This was done by promulgation more transparent disclosures of settlement costs. The law was also designed to prevent loan originators and others involved in a transaction from giving and or receiving referral fees and kickbacks.
The Department of Housing and Urban Development (HUD) is directly involved in the issuance of regulations and provides RESPA guidance to industry and consumers alike.
What Do The Changes if RESPA do for you?
On November 17, 2008, HUD published a new final rule “To Simplify and Improve the Process of Obtaining Mortgages and Reduce Consumer Settlement Costs” and has revised the RESPA rules which mandate the use of a new Good Faith Estimate (GFE) and HUD-1 which go into effect on January 1, 2010.