The following information was sent to us by Laura Triplett of Suntrust Mortgage:
RESPA Reform is Coming
The U.S. Department of Housing and Urban Development (HUD) has published its long-awaited final rule reforming the Real Estate Settlement Procedures Act (RESPA) of 1974. As a result of this ruling, significant changes impacting the way we do business will occur effective with Good Faith Estimates dated January 1, 2010 and later.
The new regulation mandates changes concerning when and how information is disclosed to the client. This new procedure will make it easier for the client to understand the key terms and costs associated with their loan transaction. Several of the major components of the new RESPA rule include:
- New Good Faith Estimate (GFE) - The GFE will be a three-page document, which clearly states the terms of the loan, the expiration of the interest rate and groups all settlement charges the client is likely to incur.
- The GFE must be delivered within three days after an application has been received
- With the exception of a credit report fee, no other fees can be charged until the applicant receives the GFE
- Once disclosed on the GFE, fees and charges may not change unless there is a regulatory-defined changed circumstance