GFE & HUD-1 Basics:
c o u n t d o w n
t o c o m p l i a n c e t o c o m p l i a n c e t o c o m p l i a n c e t o c o m p l i a n c e
The New Good Faith Estimate(GFE) and HUD-1 settlementstatement go into effect onJanuary 1, 2010.
One of the primary purposes of the new HUD is to improve up-front disclosures on the GFE andlimit the amount estimatedcharges can change. It is antici-pated that these changes will helpconsumers save nearly $700 inclosing costs.
The Good Faith Estimate has beenreduced from four to three pages.These pages include an instruc-tional page to help borrowersbetter understand their loan offer.
To help borrowers compare theirGood Faith Estimate with theirHUD-1 settlement statement, eachdesignated line on the final HUD-1will now include a reference to therelevant line from the GFE.
The new HUD will also requirelender payments to mortgagebrokers (Yield Spread Premiums)to be disclosed in a moremeaningful way.
Loan originators will be requiredto provide borrowers their GoodFaith Estimate three days after theloan originator’s receipt of allnecessary information.
HUD will allow lenders and settle-ment service providers to correctpotential violations of RESPA’snew disclosure and tolerancerequirements. Lenders and settle-ment service providers will nowhave 30 days from the date of closing to correct errors orviolations and repay consumersany overcharges.
Sections of the HUD that havesignificantly changed: 800, 1100,1200
Things you should know
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