This edition addresses new Real Estate Settlement Procedures Act rules, including the new HUD-1 form
; the recent real estate recession and efforts by the federal and state governments to assist homeowners faced with foreclosure; the roles of various participants in a closing; the use and etiquette of email; and technology and its effects on real estate practice and law.
1, 2015, the Good Faith Estimate (GFE), HUD-1 form
and Truth-in-Lending disclosures will be replaced by a Loan Estimate form and a Closing Disclosure.
Under the existing disclosure requirements, some fees initially disclosed on the Good Faith Estimate may vary slightly (tolerance ranges) from the final HUD-1 form
. Other charges and fees, however, must be exactly the same as they were on the initial disclosure.
The Origination Workgroup has already done most of the work in mapping V3 to the HUD-1 form
, and the Property and Valuation Services (PaVS) Workgroup has similarly been developing an Implementation Guide on the application of V3 for the Uniform Residential Appraisal Report (URAR) form.
Over the last five years, I have been involved with the HUD-1 form
and the mapping of each and every data point on each and every column on each and every page to a representation in the mortgage banking industry's standard representation as defined by MISMO [R], the leading technology standards development body for the residential and commercial real estate finance industries.
The company has enhanced RESPA Auditor to enable lenders to implement complete end-to-end controls for their RESPA disclosure processes, from the initial Good Faith Estimate (GFE) at application to the HUD-1 form
In addition, Solidifi Values[TM] the company's proprietary transaction system, contains functionality allowing lenders to view separately the fee paid to the appraiser and Solidifi's management fee, assisting in proper disclosure on the HUD-1 form
At the loan closing itself, closing costs on the HUD-1 form
exceeded the new 10 percent GFE/HUD-1 tolerance level, yet the lender did not redisclose prior to closing as required.
The updated version includes new Good Faith Estimate and HUD-1 form
functionality that allows lenders to make certain the specific loan costs shown on the GFE at time of application harmonize with the settlement statement the borrower sees at closing.
*Modify the HUD-1 form
to better correspond to the GFE;
Rather than entering every borrower-paid fee on the HUD-1 form
, lenders can now enter the total borrower's fees on the HUD-1.
Again, we can look to the introduction of the GFE and HUD-1 forms
as an example.