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.
THAT'S FANTASTIC!
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?
2 comments:
Do recording fees affect the TIL ? If not then why couldn't a new GFE (as a result of additional recording fees being required ) be issued at closing without any delay ?
TIL and GFE fall under two different sets of guidelines. HUD wants the loan officer to be familiar with the number of pages in their documents and also be familiar with the recording fees in their lending territory. They expect the consumer to get a reasonable quote. Since the recording fees go into the 10% tolerance tally, a loan officer doing a reasonable and educated quote shouldn't have a problem.
So, if the program hasn't changed are there aren't unexpected docs to be recorded, the GFE recording fees can't be amended.
;)
I see this as very doable though different from what loan officers are used to doing. Lenders can very easily make a page count chart for programs. Once the loan officer knows the number of documents and number of pages, good title agents can help them work out recording estimates. We plan to help our lender customer base. I'm sure other professional title agents are doing the same. We're all in this together. ;)
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