Written By: Bonnie Wilt-Hild, Op-Ed Writer
As we are all aware, there will be some upcoming changes to RESPA in addition to the most recent disclosure changes were Regulation Z is concerned. Give the current confusion on what to expect and were we need to be by January 2010, I thought I would provide some information which might help ease the way.
I thought I would begin with Regulation Z since these changes were implemented on July 30, 2009 and should be a normal course of business for everyone at this point. The changes not only include waiting periods to settlement from the date of initial disclosure which by the way is seven days but also require an additional waiting period of 3 days to closing should the terms and conditions of the loan change for the worse.
Keep in mind everyone, that should any terms and conditions of the loan as requested change i.e. the changing of a loan amount, interest rate or even the charging of additional fees, the lender is required to provide to the borrower revised disclosures which will indicate the appropriate changes and it these changes will result in an increase in the borrowers APR, than the borrower must be redisclosed. In addition, if there are two borrowers on the loan application, than both borrowers must be provided a TIL at time of application specific to the transaction which they are applying for. These are just some of the changes which all lenders and brokers should now have implanted.
The upcoming RESPA changes will take effect on January 16, 2010 and will require a reformatted GFE as well which hopefully your LOS provider will have to you within in time to be compliant. These changes will include provisions for Average Charges, Servicing Transfer Disclosure Statement, Other Technical Charges, the new GFE, the New HUD I settlement statements for all transaction in which the new GFE is used, Tolerance Information as well as the Elimination of FHA Cap on Origination Fees and the additional responsibility that goes along with that. The new rule is pretty lengthy so, if you don’t have a compliance department I strongly recommend some training as the changes are sweeping and as always, the secondary market has very little tolerance any more for these types of errors.
If you would like to take a peek at the TILA changes that became effective July 30, 2009 you can log onto the Federal Reserves web site at http://edocket.access.gop.gov/2009/pdf/E9-11567 and hopefully find any additional guidance you need. For the new RESPA changes, HUD’s website is a good place to start as they oversee the act. If this is not enough to lend guidance than by all means consider training because this is not area you want to be weak in.
Mortgage University is offering a new RESPA & TILA Training Webinar on September 14th which will cover all the changes. To Register Online: Click Here
As always, happy underwriting.
About The Author
Bonnie Wilt-Hild - As an op-ed writer, Bonnie has held many mortgage underwriting positions, including Senior FHA DE Underwriter for a major lending institution. With over 25+ years of senior-level FHA/VA Government underwriting experience, Bonnie is considered the "Queen of FHA Loans".