Wednesday, November 19, 2008

HUD Announces RESPA Changes

On Monday, Housing & Urban Development published its final ruling on the much discussed proposed RESPA changes. The new rules are intended to make it easier for consumers to compare terms on loans offered by different lenders and limit the ability of lenders to offer final terms that are far different from initial estimates given to potential borrowers. After much debate, thankfully (and I know some of you have disagreed) HUD appears to have dropped the proposed script to be read at each closing.

Congress has 60 days to decide whether to block its implementation or allow the changes to go into effect. Some provisions will then go into effect immediately, but HUD won't require loan originators to start using the new standardized Good Faith Estimates and HUD-1 settlement statement until Jan. 1, 2010. Companies can chose to follow the new rules during the preceding 12-month transition period.

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