I just recieved this list of FAQ's on the new RESPA changes. It is a lot of information, but I think they are doing a great job in simplifying it (as much as possible) for people. Lots of changes coming down the line! Be ready, knowledge is power!
December 15, 2009
RESPA Webinar FAQ’s
Q: When delivering a GFE to a borrower, how do we count the 3 days (business or calendar)?
A: Per RESPA you count business days. A business day for your business is the days that your business is open to conduct most of the business functions.
Q: Can we disclose a higher YSP and receive a lower YSP after locking?
A: Per RESPA you must quote the Rate/YSP exactly as the Lender quotes to you. What you quote in Lender credit can not decrease (Question has been submitted to HUD for clarification).
Q: Can you offer an alternative Fee Sheet in lieu of a GFE to a borrower who is shopping you?
A: Yes, you may offer a Fee breakdown to a borrower in lieu of a GFE. If the borrower has made application (provided you with the 6 items) you must issue a GFE w/in 3 days. If the borrower is just asking prequalifying questions you can issue the fee breakdown.
Q: If we pull a credit report during an interview, would that pull date constitute a GFE to the client?
A: Not unless you have the 6 items RESPA considers an application.
Q: Is the 10% tolerance up and down or just up?
A: The fees may not increase more than 10%. Fees may decrease but broker/lender must re-disclose.
Q: On a TBD, do I need to provide a GFE even though I don’t have a property address?
A: No. We recommend you do not provide a GFE but rather a Fee Sheet until application has been made. USA will not accept a TBD file if there was a GFE issued to the borrower.
Q: What if inaccurate information was supplied by the borrower before the GFE?
A: You may adjust your GFE line items that were affected by the inaccurate information.
Q: What happens if the lock expires and rates have gone up? Is that a change circumstance?
A: yes. Items that are associated with the rate can be changed.
Q: We deal with foreclosures and short sales. How should we disclose escrow fees when we don’t have an option?
A: Just like all purchase loans, the seller selects the escrow company. You will need to request the name of the escrow company the seller (bank) will utilize.
Q: What if I take an application in December but it does not close until January. Do I need to use the new GFE?
A: You may use the old GFE….? You may use the old GFE if you disclose in December. If the loan has to be re-disclosed in January we will do so on the new GFE. If the loan doesn’t close by January 31st we will re-disclose it on the new GFE.
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Q: Can you please review the 3 day disclosure period again?
A: RESPA now considers the Application date when the Broker has the 6 required items. The lender now must disclose within 3 days of the brokers Application date its not, the date the broker submits the loan to the lender.
Q: If I take a TBD application in December and the property is identified in January, do I need to use the new GFE?
A: Yes, you must use the new GFE in this scenario.
Q: If you must re-disclose after 12/31/09, do you have to use the new GFE?
A: No. You may use the old GFE as long as you close by 1/31/10. As a company we are re-disclosing on the new form.
Q: Many of the loans I have are outside the city limits so providers may charge extra. How do I disclose those on my provider list?
A: Since you will have a property address, you should be able to give actual costs.
Q: What happens if you have to extend a lock reducing the YSP?
A: If you extend a lock it is a change in circumstance. The lender credit can’t decrease and the block 1 charges have a zero tolerance. (I have a question into HUD on this)
Q: What if you lock the loan and you are now getting more YSP?
A: You must re-disclose the increase but it will be a broker credit on the final HUD-1. Block 1 fees can not increase.
Q: Where is the final total the borrower will have to bring to the closing table on the new GFE?
A: The new GFE only discloses loan costs so it will never match the final HUD for borrower funds to closing.
Q: What if the YSP is lower than disclosed? Does the borrower end up with the extra?
A: yes, the credit can not be decreased. (submitted a question to HUD on this)
Q: What if you have a borrower just trying to get a pre-qual to find out how much they can afford? Can I give them a list of potential fees until they identify a property address?
A: Yes, that is the best way to proceed with TBD pre-qual loans.
Q: What if both parties request a home inspection and the report states repairs that need to be made? Can I re-disclose and not have to abide by the 10% tolerance?
A: If the inspection is not a condition of the loan it does not go on the GFE. IF you disclose it you are held to the 10% tolerance and MUST give a provider list to the borrower.
The original link.
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