2010 RESPA Advisory
The Real Estate Settlement and Procedures Act (RESPA) was designed to provide significant protection to borrowers, from some lending practices of the past. It requires lenders to provide full disclosure, including all costs to close on a FHA mortgage or any other type of loan. It also requires disclosure of any relationships with service providers, as well as the previous lending history of that provider. Borrowers must be informed of how much they will be paying for the loan, the date that the loan is due as well as exactly what they will be paying at the time of closing.
The Good Faith Estimate (GFE) must provide detailed numbers for all term loans, as well as a clear understanding of the related fees and the closing costs. Borrowers will be given definitive information that will allow them to budget for the upcoming closing costs, as well as any other fees that will be included. Borrowers must also be given pertinent information, so that they have a complete understanding of escrow accounts, as well as any relationship that may exist between the closing service provider and anyone else involved in the loan process.
The Mortgage Review Board (MRB) will use restraint in enforcement of RESPA, in the first four months of 2010, as long as the lender is working to comply with the new procedures and regulations. Implementation of RESPA will not be delayed, but there is an understanding, that there will be a learning curve that lenders will face. To help lenders with learning how implementation works, there are live interactive presentations available.
This level playing field will now provide consumers with the protections they need, by giving them full disclosure and will allow them redress if kickbacks or referral fees are discovered, that increase their costs with regard to the loan. These changes will allow the homebuyer to be able, through full disclosure, to now make more informed decisions on their loans. Sellers are now prohibited from demanding that title insurance be purchased by a buyer.
Mortgage brokers must give borrowers/purchasers a "Special Information Booklet", containing consumer information on settlement services, an estimate of the costs as well as a "Mortgage Servicing Disclosure Statement". This Mortgage Servicing Disclosure Statement will disclose if the lender will service loan or if the lender intends to transfer the loan to a different lender. They must also give to buyers, information to help them with complaint resolution. All of these must be given with the application or within 3 business days, unless the lender turns down the loan within that time period.
Appraisal Unlimited is one way to ensure that you meet all regulation requirements and that they are adhered to in a proper and timely manner. Appraisal Unlimited will take your order, place it with a qualified appraiser, and handle the collection of all fees, as well as making payment to the appraiser. We ensure tracking, as well as record archiving, in order to make requirements for lenders faster as well as easier. Our system is strongly automated, and we have the experience to provide you with up to date information like this advisory.
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