Title Hub RESPA

The Next Generation of Real Estate Closings

RESPA REFORM
A Realtor's Guide to Understanding the Revised GFE & HUD-1

RESPA: IN THE NEWS

RESPA CHANGE
Key Features:
New Good Faith Estimate (GFE);
New HUD-1 Settlement Statement .
Mandatory: January 1, 2010
Don’t Panic: The 120 Day Reprieve .
Board overseeing enforcement of new rules to “exercise restraint” in enforcement until May 1, 2009.

HUD SUPPORT
_
www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm

NEW GFE

The GFE: Pg 1
Clear summary of loan terms, escrow account info and closing costs.

GFE: Block 1
Origination charges lumped together on GFE as bundled fee
In Block 1 of the GFE under “Our Origination Charge”.
Includes administration fees, processing, underwriting fees, doc prep fees, etc.
Includes Mortgage Brokers YSP.
May not be itemized separately.

Clarifying Final Loan Costs
“Origination Charges” = Lender’s Charges
“Other Settlement Services” = 3rd Party Charges
Total Estimated Settlement Charges [A+B] can be found on bottom of both PAGE 1 & PAGE 2 of the new GFE.

GFE: Page 2 - A
Adjusted Origination Charges
The origination charge (Line 1) consists of all Lender Administration Fees.
Credit or Charge for Borrowers interest rate (Line 2)

GFE – PAGE 2: B
Block 3: Required services selected by the Lender- Listed by Service and Charge
Disclosure needed for affiliated businesses
Block 4: Lender provides fee estimate for title services & its title insurance.
Fees may not increase by < 10% in the aggregate unless the Borrower chooses their own.
$730.00
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.
Block 6: These are disclosed in 1300’s on HUD-1
Example: survey, if required by Lender

GFE – PAGE 2B
Block 7: State and local fees to record loan & title documents.
Block 8: Amount charged for state & local fees on deeds /deeds of trust (Zero tolerance).
Block 9: Covers hazard & PMI insurance,
property/sewer/water taxes, etc.
Variable according to settlement date.
Block 10: The dollar amount per day multiplied by number of days; this will change depending on final settlement date.
Block 11: Agent chosen by Borrower;
amount depends on coverage & company.
Subtotal B: Add to fees charged by the lender to obtain the total estimated settlement charges.

Increase in Charges Table
GFE Pg. 3
Some charges cannot increase
Some can, but only within 10%
Some are free to change
0% Tolerance
10% Tolerance
No Set Tolerance

THE TRADEOFF TABLE
Buyer sees:
Details of current loan
A loan with lower closing costs
A loan w/ higher closing costs (but a lower rate)
GFE Pg. 3

Shopping Chart
Easy comparison shopping for Buyer, between loans and lenders.
The Borrower fills out the Shopping Chart to compare different
loans and/or lenders.
GFE - PAGE 3

The GFE & Lenders
GFE must be provided within 3 days.
Of application receipt or information sufficient to complete an application. So what does that mean?
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”.
HUD FAQ’s:
What they say:
“Submission of borrower’s financial information in anticipation of a credit decision relating to a federally related mortgage loan…”
What they mean:
Borrowers name/monthly income/social security # (to obtain credit report)
Property address/estimated property value/loan amount

REVISING THE GFE
ONLY IF:
Changed Circumstance:
Acts of God, War, Disaster or other Emergency
Application Inaccuracies
Material Developments (i.e., buyer bankruptcy)
Unforeseen Title Curative Requirements
NOT WHEN:
Fail to include normally charged origination service fee
Misquote a 3rd party charge
Improperly consider information relied upon for GFE

GFE REVISION TIMELINE
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.
Additional 3 days for mail (6 days total).
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.

HUD-1
NO CHANGE
NEW
SOME CHANGES

HUD-1 PAGE 2 & REALTOR COMMISSIONS
Page 2 has a number of changes
Including: Reporting of Realtor Commissions and “The Split”
The 700 series no longer requires the real estate commission to be shown as a percentage.
The actual amount paid to each real estate company is now shown.
Settlement agents will request copies of listing agreements to see commissions.

HUD-1: Page 3
Lenders must provide Settlement Agents with information to complete HUD-1.
Settlement Agent cannot do it without them and the information that they have.
Page 3 is of particular interest to Buyers, your clients.
Clearly lists loan details;
Discloses whether Lender exceeded the tolerances.
Page 3 of the HUD-1

HUD-1 & GFE Comparison
The GFE is compared to the final figures on the HUD-1.
The settlement agent, using the GFE information provided by the Lender, completes this form.
This page carries over GFE disclosures except last item is added to detail the actual amounts of the escrow account.
Buyer refund:
Difference between the amount variation exceeds tolerances the 10% tolerance threshold.
$730.00
$800.00
$2,438.00
$2,578.00
5 . 4%
$140.00

Owner’s Title Insurance
HUD:
“If a title claim occurs, it can be financially devastating to an owner who is uninsured”.
“If you want to protect yourself from claims by others against your new home, you will need an owner’s policy”.
* Shopping for Your Home Loan HUD's Settlement Cost Booklet. Pg. 20

THE TITLEHUB EDGE

TitleHub v. Other Closing Attorneys
We Offer:
Reliable, Informed, and Ultra Responsive Closing Attorneys
Innovative E-Closing System
Log On & Log In using a Secure Web Portal
Check Loan status with real time updates.
Anywhere, Anytime: Instantaneous File Access
Review & Download Deal Documents
Legal & Marketing: Helping you do your job better
The Massachusetts Real Estate Law Blog -- #1 Law Blog in MA
Innovative TitleHub Website with Realtor Resources and News
Expert Internet Marketing and Social Media Advice

We partnered with E-Closing in order to bring the settlement process into the 21st Century
E-Closing seamlessly unites us with Lenders, Mortgage Brokers, Realtors, Buyers and Sellers through the Internet
You can access our file’s status from anywhere –
check closing dates
verify documents
edit personal data

Take Control Of Your Deals
Answer client questions anywhere, anytime
If you can connect to the internet, you can check the status of your deal
See received documents, review them yourself, or help your client with their review.
No more playing phone tag to check the status of every moving part of a deal!

TITLEHUB: ANYWHERE ACCESS
Login through TitleHub.com and see your files on The Whiteboard.
If you can surf the web, you can navigate through E-Closing's pages.
It's a web site, with hyperlinks, rollover menus, and plain English.

Bonus: “Value Points”
Efficiency:
Why wait? Instant Uploads = Instant Access
Communication:
No More: Phone Tag. Email Chains. Confusion.
Go Green:
Drastically reducing our dependency on paper by transforming a wasteful process.

CONNECT TO REAL ESTATE CLOSING SUCCESS
LEGAL & MARKETING:We can help you learn to grow and change your business.

Customers Are Online...Where Are You?
Generation Y will soon outnumber Baby Boomers…
and 96% of them are on a social network.
There are over 200,000,000 blogs…
and 54% of them update or tweet DAILY!

Creating A Killer Realtor Blog
Blog Platform
Wordpress. Great starting blog platform. Inexpensive. Need some technical knowledge to set up.
Active Rain. Established platform for Realtors. Good SEO.
Get a unique URL like www.newtonmahomes.com, instead of using Wordpress URL.
Make your blog a stand alone entity. Better for SEO. Do link your blog to your website.
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.
Have an About Me and Contact pages. Key for business generation.
Do guest blog posts for your favorite lender, home inspector, attorney, mover, etc.

Creating a Killer Realtor Blog
Must-Have “Widgets” and “Plug-ins”
Optimize your blog!
RSS (Really Simple Syndication) Feed. A must! Google Feedburner is a good choice.
Share Button.
Email Subscription. Google Feedburner offers free service. Can track subscribers, and capture their email addresses.
Twitter and Facebook integration.
Stats: Set up Wordpress Statistics or Google Analytics

Smart Blogging: By Vetstein
KISS (Keep It Simple Stupid).
“Plain English”. Short & sweet posts: 300-500 words.
Hyperlink to relevant sources and articles.
Use images but be mindful of copyright issues.
Organize posts with headers and bullet points.
Use Keywords.
Creative Titles w/crucial keyword(s): “Top 10 _____ lists”.
Use top keywords at least 3-4 more times in body of post.
Use tags liberally - important tool for SEO.
Comments!
Commenting on other blogs drives traffic back to you.
Allow, but moderate, comments.

Email Marketing & Social Media
Even Email is beginning to fade in popularity!
Not a battle- but use both to succeed!
Use tools to help manage contacts.
Constant Contact
Mail Chimp
Nutshell Mail

Managing the Online Conversation
We understand what will help you get involved efficiently & intelligently.

Working with
Our goal is to provide value to those who choose to work us with us.
We can:
Decrease the demand on your time
Increase your bottom line
Provide value to your customers
Help you stand out in a crowded market.

Contact Us:

Title Hub RESPA

by Richard Vetstein on Mar 13, 2010

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