On January 1, 2010 new RESPA rules regarding the mandatory use of the revised Good Faith Estimate and HUD-1 Settlement Statement went into effect.
I have been hearing from my contacts in the lending and title professions that these new rules are complicated and open to interpretation. The net effect is that the escrow process has slowed causing delays in the close of escrow.
And a shifting close of escrow date is not good for any of the parties involved; from the Buyers attempting to line up a moving truck to the short sale lenders demanding that the original COE date be met.
The following tips for dealing with the new RESPA rules are presented by our friends at Ticor Title. Though directed to real estate professionals, I think buyers and sellers will find them of interest.
Effective January 1, 2010, the new RESPA rules regarding the mandatory use of the new Good Faith Estimate and HUD-1 Settlement Statement are in effect.
Because of the new changes, the lenders and title companies are having to navigate through this process and what we are finding, so far, is that many of the lenders and title companies in the industry have different interpretations of the new guidelines regarding the RESPA Reform.
Tip #1: Please be patient with both the lenders and title companies and make sure you educate yourself and your borrowers and sellers on the new requirements. Education Link: RESPA REFORM FAQ’s or www.Hud.gov
Tip #2: Understand that the interpretation of the new guidelines may be different from lender to lender.
Tip #3: Make sure to communicate with both lender and escrow officer regarding timelines and expectations pertaining to your real estate transaction.
Tip #4: Because of the new requirements, make sure your clients are aware of possible delays that may occur on their transaction.