Wednesday, December 30, 2009

so, what is RESPRO up to? identifies responsibilities?


RESPRO's Model GFE Cost Indemnification Agreement identifies the responsibilities of both the loan originator and the third-party settlement service provider if the final cost of a settlement service subject to HUD's new 10% tolerance requirement exceeds the new limit.   Read more here.

Friday, December 18, 2009


If you see an OLD GFE, you will see an OLD HUD.

If you see a NEW GFE, you will see a NEW HUD.

Some lenders, namely Wells Fargo, are already using the new GFE.  We choose our HUD on a case by case basis depending on the type of GFE used.

The NEW GFE will be mandatory for RESPA covered transactions on January 1st.

We'll still be using the old style HUD for cash transactions and other transactions not subject to these RESPA guidelines.

playing with the new RESPA HUD

I've been taking lender GFEs and testing them to new RESPA standards for about two months.  So far, I have only found TWO that would have been outside of the 10% tolerance.


What this tells me is that a loan officer who gives a reasonable effort in the numbers is usually safe.

What this also tells me is that loan officers must take their skills to a higher level and be aware of those odd circumstances that ARE discoverable with reasonable due diligence at the point of GFE prep and make certain they account for these oddities as needed.  In the circumstances where the figures went outside of the 10% tolerance, it was due to either an extra chain or additional documents which were BOTH circumstances the loan officers could have discovered if they had asked the right questions.

Asking the questions up front - even if it feels irritating to the real estate agents or consumers is the ONLY way to ferret out the oddball deals that will put the lender outside of tolerance with no changing circumstances on which to hang their hat.

Questions to ask?

Well, let's start with "May I have a copy of the deed?"  Confirm you know how many parcels are to be mortgaged and just how many deeds there really are behind this transaction.  If you have multiple parcels and deeds, you know there may be extra chains, lien letters charges, or recording costs.  Having that deed in hand gives you the REAL municipality so you can get that deed transfer tax spot on.

Also, think through whether your transaction will call for additional document prep.  In  refinance settling a divorce for instance, there is often a deed prep and recording fee that you might not have thought to quote in the past.  THAT was the past and this is the NOW and you've got to make that quote.

Got it?

Friday, December 04, 2009


I wondered how long it would take before the marketing - JV stuff started back up again.  YOI Here's a blurb from a solicitation:

"Marketing agreements certainly have their place in the real estate industry. They are one way to test whether or not you want to enter into a deeper business relationship with another company. They are also a way to generate leads to possible customers. However, it is often difficult to get these agreements established in a compliant, yet profitable manner."

My question:  why can't people just engage in the title business and market to the consumer?

Thursday, December 03, 2009

well, playing with RESPA

We've been running comparisons of GFEs done the old way and our prelim HUD as we do title.  We're just playing to see if loan officers are adjusting as they get closer and how close are people anyway?

Most are within 10%.  Some aren't.

Shouldn't be too darn hard to make the adjustment though.  I'm relieved.