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New guidelines hold lenders accountable

Big disclosure changes in 2010

The new year brings significant changes to consumer mortgage disclosure requirements.  Most notably… borrowers applying for a loan on or after January 1st will see a brand new 2010 HUD-1 Settlement Statement and 2010 Good Faith Estimate  as mandated by changes to the Real Estate Settlement Procedures Act (RESPA) in 2008.   The industry has been preparing for this day for some time but is still far from ready and HUD was still updating its (52 pages of) FAQ as recently as just a few days ago. 


  • Lenders are now accountable for the accuracy of fees listed on the Good Faith Estimate
    • Origination Fees and Transfer Taxes can not increase at closing
    • Other costs held to narrow 10% tolerance
  • Larger print, clearly marked fee summary sections and important dates
  • Very limited acceptable circumstances for changes
    • Acts of God, Natural Disaster are specifically listed
  • Lenders on the hook for GFE issued by Mortgage Broker

While the overall changes are good, there will be some growing pains and unintended consequences.  Imagine the borrowers reaction when his/her lender makes the decision not to make a loan after discovering they are out of compliance and have no way to remedy the situation. 

More updates on this as things settle in.

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