RESPA-tory therapy is what we'll all need after the first time we have a closing with the new requirements and HUD-1, right?
Last week before the new changes went into effect, Mike Briel (our local go-to closing attorney and all around good guy) came in with his worthy assistant, Tiffany Hine, to give us a quick overview of the changes. Fortunately, we are blessed with wonderful lenders and Mike is a great closing attorney, so the bulk of explanations to our buyers will be handled by them. And we know that the more we use the new forms, the better we'll get to know and understand them.
Today, I received the following message from Rick Boswell, our local Board of Realtors President and broker of the local Century 21 Franchise. With his permission, I'm including his message on this post:
"As we turn the calendar and focus on the year ahead, I want to make sure everyone is aware of the regulatory changes regarding the Real Estate Settlement Procedures Act (RESPA), Final Rule, which went into effect on January 1, 2010.
As of this past Friday, HUD requires that lenders and mortgage brokers provide consumers with a new, standard Good Faith Estimate (GFE) that clearly discloses key loan terms and closing costs. Closing agents are also required to provide borrowers with a new HUD-1 Settlement Statement that clearly compares consumers' final and estimated costs.
The new RESPA rule became effective in January 2009, but HUD had provided a one-year transition period for the mortgage industry to incorporate these changes.
While the responsibility for the implementation of new GFE and HUD-1 documents primarily impacts the mortgage lenders and settlement services companies who must provide these documents to consumers, RESPA applies to everyone in the real estate profession. All brokers and sales professionals should be well aware of these changes to the documentation that your clients will receive from their lenders and at the closing table. This is especially important for those of you who have affiliated business arrangements such as a joint venture title or mortgage entity.
With this in mind, here are several online resources from the National Association of Realtors (NAR) and HUD for you to review:
· NAR's online RESPA homepage, which includes an archived presentation from Phillip Schulman, Esq., a partner with the law firm of K&L Gates in Washington, D.C., who specializes in RESPA and real estate law
· HUD's online RESPA resource center
· HUD's new RESPA rule seminar
Although HUD recently announced a 120-day restraint in enforcement for non-FHA originators and other settlement service providers who demonstrate good faith in implementing RESPA's new rules, the department still expects all loan originators to begin using the new GFE and revised HUD-1 beginning January 1, 2010.
Again, the intent of the new RESPA rule is to clarify disclosures and reduce closing costs for consumers, so it is in your best interests to familiarize yourselves with the new documents. This letter is not legal advice and is not a complete description of all changes to the rule. Agents under their brokers direction should seek legal advice from an attorney familiar with RESPA to implement the required changes."
I, for one, am going to take a deep breath and get the RESPA-tory therapy I need!