Information and Solutions to Meet RESPA Compliance

The U.S. Department of Housing and Urban Development (HUD) has issued long-anticipated mortgage reforms that will help consumers shop for the lowest cost mortgage. The final rule under the Real Estate Settlement Procedures Act (RESPA) requires more timely and effective disclosure of loan terms and closing costs that consumers pay when buying or refinancing a home. This rule affects all policies, procedures, and documents for mortgage lending.

Under the rule, mortgage brokers and lenders are required to use the new Good Faith Estimate (GFE), revised HUD-1/HUD-1A Settlement Statements, and revised Settlement Cost Booklet by January 1, 2010. The Servicing Disclosure Statement was delivered in 2008 to meet the RESPA usage date of January 16, 2009.

Good Faith Estimate—A new, standardized GFE provided to borrowers at the time of application to outline the loan terms and total settlement costs. The new Good Faith Estimate offers consumers more certainty about their loan and enables them to shop around more effectively to find the lowest cost loan.

HUD-1/HUD-1A Settlement Statements—Each line on the revised HUD-1 includes a reference to the relevant line from the GFE with consistent terminology used in both. This will allow borrowers to easily compare their final loan terms and closing costs with those listed on their Good Faith Estimate.

Servicing Disclosure Statement—This revised upfront disclosure statement informs the borrower whether a loan’s servicing will be assigned to another financial institution.

Settlement Cost Booklet—This revised booklet is provided at the time of application to inform the borrower of fees involved in home purchase settlement.

On this site, you’ll find a wealth of information on our training and services, policy and reference resources, compliance solutions, as well as HOEPA and HERA legislative changes. Let us help you quickly bring your institution into compliance with the new RESPA regulations. Contact us to learn more.

RESPA Updates

Updated RESPA Rule FAQs—The U.S. Department of Housing and Urban Development (HUD) has just released its "New RESPA Rule FAQs." The "New RESPA Rule FAQs" were comprised from industry questions and are posted to facilitate implementation of these new requirements. Visit http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs422010.pdf to see the updated FAQs.

Community Banks Say Meeting TILA and RESPA Requirements Top List of Key Compliance Concerns According to Survey—The 242 community banks responding to the May survey were asked to choose what they believed their top three regulatory compliance concerns will be in the next 12 months. Compliance with TILA was a top regulatory concern with 60 percent of respondents saying so, while RESPA followed closely at 58 percent. Click here to read the entire press release.

Will the RESPA Regulations be Suspended?—House Bill H.R. 1728 was amended to suspend the January 1, 2010 RESPA regulation and require HUD and FRB to instead propose a joint rule. The amendment has passed the House and moved to the Senate. The Senate has referred the bill to the Committee on Banking, Housing, and Urban Affairs but there has been no further activity by the Senate.