Why The RESPA Reform??

By
Real Estate Agent with Coldwell Banker United Realtors® ~ 512.750.6899

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There is much complaining about the new RESPA Reform, but, it is a needed response to try and curb the many abuses by sub-prime lenders and others who sold loans that were not in the best interest of the buyer.

The reasons given on "why the changes" are numerous.  However ones that appear to be justified by most are:

  • To educate the buyers
  • To encourage shopping of loans
  • To increase competition, thereby reducing costs for the buyer

There were no differntiations between the buyer, lender or seller fees and this was confusing to buyers trying to figure out who was offering the best deal.

Some of the most recognizable changes to be aware of are the following:

  • The Good Faith Estimate is not a statement of how much to bring to closing
  • The "Estimate of closing costs" will show how much to bring to closing
  • Down-payment will not show on GFE, nor will seller-paid closing costs
  • Once the loan is registered and the rate locked, the GFE is a binding document
  • Standard forms will be used by all lenders therefore the hope is  no more "hidden fees" because all the names of the fees will be the same
  • Any changes to sales price seller contributions, etc. that may be negotiated will require the GFE to be recalculated and resent to the buyer.  This must be finalized three days prioer to closing to avoid delays.  If not and there are changes "don't look for closing on the date of the contract!"

Dates are going to be very important to follow if you expect closings to run smoothly on the agreed date in the contract.  It is crucial that all parties work together as we muddle through the first quarter closings in 2010!  Whether we like it or agree with it is not the question right now.  As professionals we need to keep the wheels turning and work in concert to make transaction close so our clients can be on their way!

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Tags:
closing costs
respa
loan officers
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good faith estimates
down payments
home loans
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Ambassador
1,880,962
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth
Dorie, personally I don't get the seller paid closing costs missing. I think it is a more uniform form with HUD-1 for everyone.
Jan 07, 2010 06:27 AM #1
Rainmaker
3,840,498
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Hi Gary,

You are voicing a concern that many are expressing! It will be interesting to see how this plays out..only time will tell.

Jan 07, 2010 07:46 AM #2
Rainmaker
420,748
Michelle Francis
Tim Francis Realty LLC - Atlanta, GA
Realtor, Buckhead Atlanta Homes for Sale & Lease

Dorie,  

Good point in your post that communicating and working together towards dates in the closing process will be even more critical in the 1st Q of 2010.  

All the best, Michelle

Jan 07, 2010 07:58 AM #3
Rainmaker
3,840,498
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Hi Michelle,

It will be important for all of us agents to work together to make the transactions successful! No room for egos and Prima Donna's!

Jan 07, 2010 01:24 PM #4
Rainmaker
484,423
Ricki Eichler McCallum
CastNet Realty - Corpus Christi, TX
Broker,GRI,ABR, e-Pro, TAHS

Just one more reason people need a good Realtor!

Jan 10, 2010 01:22 PM #5
Rainmaker
3,840,498
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Hi Ricki,

You are right because a good one will make the difference in your closing!

Jan 10, 2010 11:27 PM #6
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Rainmaker
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Dorie Dillard CRS GRI ABR

Serving Buyers & Sellers in NW Austin Real Estate
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