This year, the residential real estate financing industry has made some huge changes. The Federal Government has adopted new rules for the implementation of the Real Estate Settlement Procedures Act (“RESPA”). RESPA is a HUD consumer protection statute designed to help homebuyers be better shoppers in the home buying process. The changes are the biggest reforms to RESPA in more than 30 years.
As of
January 1, 2010, all residential lenders and mortgage brokers are
required to use a new Good Faith Estimate (“GFE”) that clearly
discloses loan terms and closing costs. Settlement agents will be using a new settlement statement (“HUD-1”) for all residential loan closings. The statement will mirror the GFE and disclose any variances from the original figures.
The
main differences between the new and old GFEs are (1) standardization
of the form, (2) grouping of fees, and (3) tolerance for variations
from the GFE amounts at settlement.
Read more about these changes by clicking here.