S.C. Homebuyers: HUD's Home Loan Pamphlet

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HUD Shopping for a Home Loan PamphletIn my previous post I wrote about the new RESPA regulations.

Here's a Quick Recap of The Recent Changes in RESPA (The Real Estate Settlement Protection Act)

  1. A new form replaces the one page Good Faith Estimate previously provided. Typical of regulatory agencies--the new form is now 3 pages--it used to be just 1.
  2. There will be greater transparency when it comes to closing costs.
  3. The new form and regulations will make it easier for the consumer to shop
The Loan Orginator or Mortgage Broker is required tro give you the "Shopping for Your Home Loan phamplet within 3 days of applying for a mortgage.

This pamphlet gives consumers a digest of the new law and what they should expect from Loan Originators and Mortgage Brokers. Much of it is very good information with clear explanations.
There are two areas I'd like to address in the pamphlet--The role of real estate agents and the role of attorneys:

 (direct quotes from this pamphlet)

1-Page #_6_Role of the Real Estate Agent or Broker--"Frequently, the first person you consult about buying a home is a real estate agent or broker. Although these agents and brokers provide helpful advice, they may legally be representing the interests of the seller and not yours."

Does this Apply in S.C.?

In South Carolina, an explanation of agency law is required. It is to the home Buyer's advantage to be represented EXCLUSIVELY by ONE real estate broker.

Here's the link to the SC agency Law Brochure.

Bottom line, when a home buyer doesn't have an exclusive buyers agency agreement in force, the real estate agent who is showing you properties represents the interests of the SELLER.

2-Page#_6_ Real Estate Broker Offers to Help Home Buyer Get a Mortgage

The pamphlet reads as follows: "Sometimes, the real estate broker will offer to help you obtain a mortgage loan. He or she may also recommend that you deal with a particular lender, mortgage broker, title company, attorney, or settlement/closing agent. You are not required to follow the real estate broker‟s recommendation, and you should compare the costs and services offered by other providers before making a decision."

Does this Apply in the Beaufort County Area of  S.C.?

Most agents don't "recommend" a specific lender or loan originator--they typically provide a list of professionals to choose from--there is nothing that obligates a home buyer to use anyone from the list.

3-Page#_6_Role of an Attorney

The Pamphlet reads as follows: "Before you sign a sales agreement, you might consider asking an attorney to review it and tell you if it protects your interests. If you have already signed your sales agreement, you might still consider having an attorney review it.

Hilton Head Area Association of Realtors Has a Standardized Purchase Agreement--They spent many man-hours creating a clear standardized purchase agreement that is in the best interests of all parties.

Caveat: If you must discuss the terms and conditions specified in this standardized purchase agreement you may by all means seek out the advice of a qualified attorney: that would be an attorney who specializes in real estate law. Those who do not specialize in the practice of real estate law can cause all kinds of delay.

The Pamphlet further states, that "If choosing an attorney, you should shop around and ask what services will be performed and whether the attorney is experienced in representing homebuyers.

What's the normal practice in the Beaufort County Area?

In the Beaufort County area, Escrow Services are handled by real estate attorneys who specialize in real estate transactions. They will do title searches,get title insurance, get mortgage information together from the lenders involved to enable a closing, prepare HUD-1 statements, etc.

The real estate professional is charged with insuring that all of the various tasks necessary for closing the real estate transaction are accomplished. He or she will coordinate activities, help to facilitate scheduling of tasks and follow up to insure that the transaction is on track to close.

The real estate professional is also responsible for the accuracy of the HUD-1. Attorneys are to provide a copy of the HUD-1 48 hours before closing for this review.

My advice to  any homebuyer interested in purchasing a home in the Beaufort County Area is to become as knowledgeable as you can and seek the advice of competent real estate professionals.

You can then discuss your questions with them and get the very best advice.

Here's the link to the HUD Pamphlet (URL)

 Contact Info: You can call me at 843-368-9146

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John March