HUD is educating consumers on how changes in the interest rate can effect monthly mortgage payments and settlement costs.
Application Inaccuracies=credit worthiness, amount of loan, estimated value of the property…Unforeseen Title Curative Requirements (boundary disputes, need for flood insurance, environmental problems…)
Title Hub RESPA
The Next Generation of Real Estate Closings<br />
RESPA REFORM<br />A Realtor's Guide to Understanding the Revised GFE & HUD-1<br />
RESPA CHANGE<br /><ul><li>Key Features: </li></ul>New Good Faith Estimate (GFE);<br />New HUD-1 Settlement Statement .<br /><ul><li>Mandatory: January 1, 2010</li></ul>Don’t Panic: The 120 Day Reprieve .<br /><ul><li>Board overseeing enforcement of new rules to “exercise restraint” in enforcement until May 1, 2009. </li></li></ul><li>HUD SUPPORT <br />_<br />www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm<br />
The origination charge (Line 1) consists of all Lender Administration Fees.
Credit or Charge for Borrowers interest rate (Line 2)</li></li></ul><li>GFE – PAGE 2: B<br />Block 3: Required services selected by the Lender- Listed by Service and Charge<br /><ul><li> Disclosure needed for affiliated businesses</li></ul>Block 4: Lender provides fee estimate for title services & its title insurance.<br /><ul><li> Fees may not increase by < 10% in the aggregate unless the Borrower chooses their own.</li></ul>$730.00<br />Block 5: Owner’s premium calculated by taking the amount of the policy plus the issue fee before deducting the amount for the “stand-alone” lender’s policy.<br />Block 6: These are disclosed in 1300’s on HUD-1<br /><ul><li> Example: survey, if required by Lender</li></li></ul><li>GFE – PAGE 2B<br />Block 7: State and local fees to record loan & title documents.<br />Block 8: Amount charged for state & local fees on deeds /deeds of trust (Zero tolerance). <br />Block 9: Covers hazard & PMI insurance, <br />property/sewer/water taxes, etc.<br />Variable according to settlement date. <br />Block 10: The dollar amount per day multiplied by number of days; this will change depending on final settlement date.<br />Block 11: Agent chosen by Borrower;<br />amount depends on coverage & company.<br />Subtotal B: Add to fees charged by the lender to obtain the total estimated settlement charges. <br />
Increase in Charges Table<br />GFE Pg. 3<br /><ul><li> Some charges cannot increase
A loan w/ higher closing costs (but a lower rate)</li></ul>GFE Pg. 3<br />
Shopping Chart<br />Easy comparison shopping for Buyer, between loans and lenders. <br />The Borrower fills out the Shopping Chart to compare different <br />loans and/or lenders. <br />GFE - PAGE 3<br />
The GFE & Lenders<br /><ul><li>GFE must be provided within 3 days.</li></ul>Of application receipt or information sufficient to complete an application. So what does that mean?<br /><ul><li>Lender cannot verify borrower information prior to issuing GFE.
Lender cannot charge Borrower for preparation of the GFE; Lender can only charge for Credit Report.
Quotes good 10 business days unless “changed circumstance”. </li></ul>HUD FAQ’s:<br />What they say:<br />“Submission of borrower’s financial information in anticipation of a credit decision relating to a federally related mortgage loan…” <br />What they mean:<br /><ul><li>Borrowers name/monthly income/social security # (to obtain credit report)
Property address/estimated property value/loan amount </li></li></ul><li> REVISING THE GFE<br />ONLY IF:<br /><ul><li>Changed Circumstance:</li></ul>Acts of God, War, Disaster or other Emergency<br />Application Inaccuracies<br />Material Developments (i.e., buyer bankruptcy)<br />Unforeseen Title Curative Requirements<br />NOT WHEN:<br /><ul><li>Fail to include normally charged origination service fee
Improperly consider information relied upon for GFE</li></li></ul><li>GFE REVISION TIMELINE<br /><ul><li>Revised GFE provided by loan originator within 3 business days of receiving the information which changed the circumstances.
Upon receipt of GFE, borrower has 3 days to review new estimates.</li></ul>Additional 3 days for mail (6 days total).<br /><ul><li>Expect turnaround of 7 days before closing on deal after a Changed Circumstance.
The mortgage broker & the lender both must retain documentation of reasons for revised GFE for no less than 3 years after settlement. </li></li></ul><li>HUD-1<br />NO CHANGE<br />NEW<br />SOME CHANGES<br />
HUD-1 PAGE 2 & REALTOR COMMISSIONS<br /><ul><li>Page 2 has a number of changes </li></ul>Including: Reporting of Realtor Commissions and “The Split”<br /><ul><li>The 700 series no longer requires the real estate commission to be shown as a percentage. </li></ul>The actual amount paid to each real estate company is now shown. <br /><ul><li>Settlement agents will request copies of listing agreements to see commissions. </li></li></ul><li>HUD-1: Page 3<br /><ul><li>Lenders must provide Settlement Agents with information to complete HUD-1. </li></ul>Settlement Agent cannot do it without them and the information that they have.<br /><ul><li>Page 3 is of particular interest to Buyers, your clients. </li></ul>Clearly lists loan details;<br />Discloses whether Lender exceeded the tolerances. <br />Page 3 of the HUD-1<br />
HUD-1 & GFE Comparison<br /><ul><li> The GFE is compared to the final figures on the HUD-1. </li></ul>The settlement agent, using the GFE information provided by the Lender, completes this form. <br />This page carries over GFE disclosures except last item is added to detail the actual amounts of the escrow account. <br />Buyer refund: <br /><ul><li>Difference between the amount variation exceeds tolerances the 10% tolerance threshold. </li></ul>$730.00<br />$800.00<br />$2,438.00<br />$2,578.00<br /> 5 . 4%<br />$140.00<br />
Owner’s Title Insurance<br />HUD:<br />“If a title claim occurs, it can be financially devastating to an owner who is uninsured”. <br />“If you want to protect yourself from claims by others against your new home, you will need an owner’s policy”.<br />* Shopping for Your Home Loan HUD's Settlement Cost Booklet. Pg. 20<br />
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<ul><li>We partnered with E-Closing in order to bring the settlement process into the 21st Century</li></ul>E-Closing seamlessly unites us with Lenders, Mortgage Brokers, Realtors, Buyers and Sellers through the Internet<br /><ul><li>You can access our file’s status from anywhere – </li></ul>check closing dates <br />verify documents <br />edit personal data<br />
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Customers Are Online...Where Are You?<br /><ul><li> Generation Y will soon outnumber Baby Boomers…
and 54% of them update or tweet DAILY!</li></li></ul><li>Creating A Killer Realtor Blog<br />Blog Platform<br /><ul><li>Wordpress. Great starting blog platform. Inexpensive. Need some technical knowledge to set up.
Active Rain. Established platform for Realtors. Good SEO.</li></ul>Get a unique URL like www.newtonmahomes.com, instead of using Wordpress URL.<br />Make your blog a stand alone entity. Better for SEO. Do link your blog to your website. <br />Header Art: If Do It Yourself, invest in some nice looking header art, or hire a blog designer. Better looking, better designed blogs attract more readers and traffic.<br />Have an About Me and Contact pages. Key for business generation.<br />Do guest blog posts for your favorite lender, home inspector, attorney, mover, etc.<br />
Creating a Killer Realtor Blog<br />Must-Have “Widgets” and “Plug-ins”<br /> Optimize your blog!<br />RSS (Really Simple Syndication) Feed. A must! Google Feedburner is a good choice.<br />Share Button. <br />Email Subscription. Google Feedburner offers free service. Can track subscribers, and capture their email addresses.<br />Twitter and Facebook integration.<br />Stats: Set up Wordpress Statistics or Google Analytics <br />
Smart Blogging: By Vetstein<br /><ul><li>KISS (Keep It Simple Stupid).</li></ul>“Plain English”. Short & sweet posts: 300-500 words.<br />Hyperlink to relevant sources and articles. <br /><ul><li>Use images but be mindful of copyright issues.
Organize posts with headers and bullet points.
Use Keywords. </li></ul>Creative Titles w/crucial keyword(s): “Top 10 _____ lists”.<br />Use top keywords at least 3-4 more times in body of post.<br />Use tags liberally - important tool for SEO.<br /><ul><li>Comments! </li></ul>Commenting on other blogs drives traffic back to you.<br />Allow, but moderate, comments.<br />