U.S. Department of Housing and Urban Development Assistant Secretary for Housing-Federal Housing Commissioner David Stevens has announced the first release of frequently asked questions (FAQs) concerning implementation of the new Real Estate Settlement Procedures Act (RESPA) rule. The FAQs were compiled from questions received from industry since the publication of the Rule.
Under the new RESPA rules consumers will, for the first time ever, be able to use the Good Faith Estimate to easily compare their estimated loan offer with the one to which they actually agree. It will provide clear, transparent disclosure of loan information that consumers can use to shop for the best loan - resulting in lower interest rates and lower origination and settlement costs for borrowers. This will virtually eliminate the kinds of unfair junk fees that surprise so many borrowers at closing. In the end, this greater clarity and transparency will save consumers hundreds of dollars in total loan costs.
"If we learned anything from the current crisis it's that it is hard for borrowers to make responsible decisions if they don't have all the necessary information," said Stevens. "I believe these changes will take away much of the uncertainty borrowers have about the accuracy of disclosures."
Some of the topics covered include requirements and delivery of the Good Faith Estimate, the HUD-1 Settlement Statement and specific information about completion of the GFE and HUD-1 forms.
The new RESPA regulations were published Nov. 17, 2008 and are scheduled to take full effect on Jan. 1, 2010. On that date, HUD will require that loan originators provide borrowers with the new standard Good Faith Estimate and closing agents provide borrowers with the new HUD-1 settlement statement.
HUD's FAQs may be accessed by clicking here.
For more information, visit www.hud.gov.