Effective January 1, 2010, changes will be made to the Real Estate Settlement Procedures Act (RESPA), which will improve the client experience with regards to choosing a mortgage loan. Essentially, these changes will allow the client to make a better informed decision about which loan to go with. Less confusion, and more peace of mind! According to SunTrust Mortgage:
RESPA reform brings several important changes to the mortgage industry, such as the following:
- Introduces a new, standardized Good Faith Estimate form to improve a client’s ability to compare multiple offers
- Revises the HUD-1 Settlement Statement form (HUD-1A for refinances) to facilitate comparison to the GFE
- Defines what information constitutes an “application” and triggers the time line for delivering an initial GFE
- Introduces a new term “changed circumstances” to describe when increasing fees is permissible after issuing the initial GFE
- Establishes tolderances or restrictions for increasing fees between the initial GFE and the final HUD-1, outside of a “changed circumstance”
Looking for more information? Check out the RESPA Frequently Asked Questions on HUD’s website.