Happy New Year! Is it too late to say that? Certainly not if I haven’t told you that already! My family and I stayed in the area for the holidays and enjoyed our annual Christmas tradition with the “4th Annual Christmas Family Olympics”. You may remember me talking about this last year. It’s a fantastic way to get the family together to have some fun and make memories that last a lifetime. If you’re interested in a break from the traditional let me know and I’ll fill you in on how we do it. Speaking of breaking from tradition….
After over a year of email updates, I took a break from typing them during the holidays. Part of the break was due to a technical issue in their dissemination; but fixing that issue took longer than anticipated because we were busy moving into a new location that we first spent months remodeling! What a crazy 2 months it has been for the Baker and Lindsey, Niceville Office! After 5 years in Bluewater Bay we’ve moved to central Niceville and are now right next to Jim-n-Nicks BBQ, directly across from the Chamber of Commerce. This new location gives us much needed exposure, and to those that wonder… yes, we will complete our sign eventually. We’re waiting for the graphic to be completed. While our newsletter break and our office move was a big break from tradition, the biggest break occurred new year’s day….
Did you feel the ground shake just after midnight on January 1st? That was the day of implementation for the new changes to the Real Estate Settlement Procedures Act (RESPA) managed by Housing and Urban Development (HUD). RESPA was originally enacted in 1974, and there has not been a major change to the rule or it’s effect since it’s first and last reform in 1996. This is a law that went 22 years without reform, then went 14 more years until the past new years day when major reform hit us all like a ton of bricks. The new RESPA reform is intended to protect consumers (as all legislation is I suppose) which I like, the problem though is whether this legislation will have the effect of raising prices for the consumer. I believe it will in the long run. But hey, you’re further protected now, and I guess that comes at a price.
In essence, HUD is working to bring all lenders up to the same standard of excellence in reporting closing costs that we have always adhered to, estimating realistic fees that a borrower should expect to pay at closing with no last minute surprises.
Below are some important points to know:
- All fees paid to the lender are to be consolidated in one line, including processing fees, origination fees, etc. These charges cannot change from the original estimate without a material change to the loan requested.
- In the event fees are being charged to obtain a lower rate, these are to be broken out and itemized for the borrower’s ease of comparison to other loan programs.
- Estimates for fees from government recording charges and third party settlement providers we suggest are to be itemized and we are held to a tolerance of 10% for their accuracy. In the event the estimated charges exceed the amount listed by the allowable tolerance, we will be responsible for making up the difference.
- Estimates for services that the buyer can shop for and do choose can change at settlement without Baker and Lindsey being held accountable. This can include title charges, homeowner’s insurance, and initial deposits for an escrow account.
This new change requires much more accountability on lenders for the Good Faith Estimates they provide. In the past the GFE was barely worth the paper it was printed on, that’s not the case any longer. This has resulted in some lenders being cautious to even talk to a borrower out of fear they’ll have to produce a GFE they’ll be held to. At the Baker and Lindsey Niceville Office, we’re not afraid to provide a GFE to anyone that asks for it, as we’ve nothing to hide; and we’re confident that our professional approach to mortgage finance has kept us ethical all along. For us, the new GFE is just a new form for us to get used to.
We’re providing a professional approach to mortgage finance! How can we help you?