New Required HUD Reading Material

Services for Real Estate Pros with Paul Warkow-D.G. Weber Law Associates

Under the new RESPA rules, starting January 1, 2010 lenders are going to be required to give borrowers a HUD booklet within 3 days of applying for a mortgage.  Here is a link to see a copy of this booklet.  To call this a booklet is totally misleading.  Now a borrower will be handed this 49 page HUD publication that is supposed to make things easier for the borrower.  Keep in mind that it is not required that the real estate agent give it out, just lenders and mortgage brokers.


I do not see how giving a borrower a 49 page epic is going to make things clearer or simpler for the borrower.  They might as well call it the “Tree Killing Act of 2009”.  All we are doing is pushing more paper in the name of consumer protection.   For comparison, HUD used to have a 3 x 8 pamphlet that was 22 pages to explain the home buying process.  It now is required that the consumer receive a 49 page epic on 8 x 11 paper.


Here are some of the highlights.  It takes 9 pages to explain the new 3 page GFE that was once one page.  It also takes 9 pages to explain the new 3 page HUD-1 which was once two pages.  Does any one rationally believe that anything that takes nine pages to explain is going make things easier to understand?  Just so real estate agents do not feel left out of this tome; there is a short section on the role of broker.  It contains this gem, “…state laws usually require that you are treated fairly.”  Wow, I would not have known that unless HUD told me that in this epic.  The good news is that HUD included a 12 step purchase time line and step number 2 is finding a real estate agent.


I guess I will have to start ordering in bulk from Kinkos to give my clients more reading material which they will not read or if they do read, will just add to the confusion.


Comments (3)

Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

Paul - I think those in charge of regulation should look up the definition of the word parsimonious.  It continually amazes me that we see things made more complicated than they have to be, especially when most folks are aware that attention spans these days aren't exactly focused.  We need to practice the KISS (Keep It Simple Stupid) philosophy.  Sometimes I think we try to make things so "detailed" and "comprehensive" to make-up for a lack of succinct thought.

Dec 22, 2009 03:48 AM
Patrick Scott
OConnor Title Guaranty, Inc. - Chicago, IL

Paul - I agree with you and Sardi.  HUD has done the exact opposite of the helpful solution.  The helpful solution would have been to reduce and simplify the reading.  HUD has added to the daunting pile, which people will be even less likely to read.

I really believe that, if somebody would pay me to do it, I could edit that stack of redundency down to a quarter of the size of an average closing package without losing any useful information or disclosures.

Dec 22, 2009 01:41 PM
Paul Warkow
Paul Warkow-D.G. Weber Law Associates - Hauppauge, NY

Jason and Patrick-I agree.  It is the new forms that are fundamentally flawed.  There is something wrong with the new GFE and HUD-1 if it takes nine pages each to explain them.

Dec 23, 2009 01:06 AM